Knowledge Management, Organizational Trust, and Innovation in UAE - Essay Example

The Relationship between Knowledge Management, Organizational Trust, Creativity and Innovation in UAE List of Contents 0 ……………………………………………………………………………… 3 2.0 Introduction……………………………………………………………………………. 3 3.0 Knowledge Management Behaviors………………………………………………….. 4 3.1 Knowledge Management………………………………………………………… 4 3.2 Knowledge Acquisition…………………………………………………………... 5 3.3 Knowledge Dissemination………………………………………………………. 6 3.4 Responsiveness to Knowledge………………………………………………….. 7 4.0 The elements of Interpersonal Trust at Work………………………………………... 8 4.1 Confidence in Peers……………………………………………………………... 8 4.2 Faith in Peers…………………………………………………………………….. 9 4.3 Faith/Confidence in Leadership………………………………………………… 10 5.0 Knowledge Responsiveness within the Organization……………………………….. 11 5.1 Creativity and Innovation………………………………………………………. 11 5.2 Productivity……………………………………………………………………... 11 6.0 Hypothesis…………………………………………………………………………… 12 7.0 Methodology………………………………………………………………………… 12 7.1 Participants……………………………………………………………………... 12 7.2 Method of data collection………………………………………………………. 13 7.3 Procedure……………………………………………………………………….. 13 7.4 Results…………………………………………………………………………... 14 7.5 Challenges and Limitations……………………………………………………... 16 8.1 Conclusion…………………………………………………………………………… 17 9.1 Time management …………………………………………………………………….. 17 References………………………………………………………………………………... 18 The Relationship between Knowledge Management, Organizational Trust, Creativity and Innovation in UAE 1.0 Abstract Knowledge management is a relatively modern concept in the domain of business. It refers the integration of the knowledge of the individual members of an organisation into organisational knowledge. Interpersonal trust amongst the co-workers plays a pivotal role in the sharing of knowledge within a system and fostering an atmosphere conducive to learning, creativity and innovation. Creativity and innovation are two key concepts which relate to the creation and application of new information and these two elements also form the core of knowledge management. This paper aims at establishing a valid relationship between the levels of productivity in UAE’s organisations vis-à-vis the levels of Knowledge Management, Organizational Trust, Creativity and Innovation in those organisations. 2.0 Introduction With the advent of globalisation, the worldwide market has witnessed an increased degree of diversity in terms of products and services. The 21st century has come across a myriad range of the expectations and preferences of the consumers. This diversity has also found a parallel reflection in the workforce of today’s organisations. The modern organisations showcase a widely diverse workforce with respect to age, gender, nationality, education and experience. The knowledge or intellectual capital of the workforce is a powerful and precious asset to the organisation. It is a magical tool not only for maintaining sustainability but also for gaining a competitive advantage. In today’s competitive age, merely the information regarding products or services is not enough to surpass competitors. Such knowledge and information has to be upgraded and enhanced time and again depending upon the market situation. The workforce needs to show flexibility and creativity in the application of their share of knowledge. The organisations need to adapt to the changing market scenario. This is where the role of knowledge management comes in. It assists organisations by helping them in polishing their strengths and overcoming their weaknesses through idea generation and subsequent effective implementation of those ideas. But to lead the competition, knowledge alone is not sufficient. It needs to be complemented by other elements such as interpersonal trust, creativity and innovation in using that knowledge. This paper looks forward to studying the interplay of Knowledge Management, Organizational Trust, Creativity and Innovation and their contribution in the productivity of organizations in UAE. 3.0 Knowledge Management Behaviors 3.1 Knowledge Management By playing a vital role in the working of all organisations, Knowledge Management has gradually evolved as a treasured strength for every nation. It has received an elevation from the status of an organisational asset to that of a national asset. To ensure its survival amidst the fierce competition, every organisation must focus on the accumulation, filtration, organisation and dissemination of relevant knowledge and information. It is this steady flow of information and the storehouse of knowledge that enables any organisation, or a nation’s economy at large, to navigate through the stringent network of competitors and emerge successful at the end. Knowledge management, in other words, is defined by the extent to which an organization receives external information and integrates it into their internal operations with a view to gain a sustainable and long-term competitive advantage (Bhatt, 2001). Achieving the main organisational objectives by taking proper and timely decisions and applying creativity in controlling the effects of information upon the organizational processes is the very essence of the knowledge management process (Dali, 2006). 3.2 Knowledge acquisition Knowledge management, in simplest terms, refers to the reaction to real-life situations by performing actual tasks that involve the application of knowledge and information. To be more precise, it may be defined as the amalgamation of “experiences, values, and disciplined insights from the available information into a frame for assessment and the subsequent utilization of the wired process to produce unique products and services" (Dali, 2006). In today’s changing and unpredictable business environment, the key to gaining a long-term organisational survival is a proper harmonisation of the outside knowledge with the core competencies of an organization (Susana, 2010). Globalisation is a double-edged sword; while on one hand it has showered a plenty of bounties on modern economies, it has brought with it a set of disadvantages as well. The modern age of information and communication technology has brought some new challenges for the organisational workforce. In this context, Dracker (1993) cautions that all organizations, especially those dealing with higher learning, that they must be adaptive and accommodative. Otherwise they should be prepared to be ultimately reduced to the stature of monumental structures of the past era (Khatami, 2009). The key ingredient of knowledge management is knowledge acquisition or the steady and continuous process of learning. It is this element that helps an organisation to stand apart in the race by devising newer methods and innovations to overcome competitors. Though the organisations have their own systems for formal learning, such kind of organisational learning occurs predominantly in informal environments within the organisations, when the employees interact amongst themselves and with their clients. In the 21st century, such interaction has been greatly enhanced by the web technology which has highly expanded the learning environment. Though one cannot completely overlook the role of formal learning processes, informal learning processes account for more than 80% of the knowledge acquisition in modern organizations (Cross, 2007). 3.3 Knowledge Dissemination Every organisation is built upon the cornerstone of a central framework which determines the objectives of the organisation. The core of this framework consists of a shared vision which flows through the entire organisation and also features in the various interactions amongst its employees (Singe, 1990). It is this phenomenon of sharing that makes it possible for the organisation to attain its targets and objectives. An organisation is a system and consists of various interacting and interrelated units. The performance of any given unit influences the performance of all the other connected units, and ultimately the overall productivity of the firm. Hence any new information acquired by individual employees must be circulated inside and outside the organisation in order to ensure that it is applied to devise effective solutions to the challenges faced by the organisation. Today, various different methods of knowledge dissemination are employed by businesses and economies across the globe. One of the most commonly used techniques is a ‘web blog’ which is an effective means for circulating personal experiences, thoughts or views across an entire organization and/or partners across the world at a very marginal cost. IBM is one such organization that utilises web blogs to talk over software development projects and business strategies. Under this system, the senior-level consultants share useful information/knowledge/experiences, which are subsequently adopted by the new employees for use/review of their own projects (Pintails and Greens, 2008). Another recent trend in knowledge dissemination is community of practice (Cop), which is a voluntary group of practitioners, peers or employees at work who get involved in the exchange of knowledge aimed at improving performance within their given area of practice. Cops, owing to their width and flexibility, go beyond the boundaries of generations. Their membership is open to the venerable experts with a wealth of experience as well as to the members of generation Y with a fresh exuberance. This gives an opportunity to the younger employees to seek help, guidance and at times out-and-out mentorship. A third means are leadership workshops, which are commonly used as a general platform for imparting skills and knowledge to the new employees. 3.4 Responsiveness to Knowledge Organizational responsiveness to the knowledge acquired from external environment represents the absorptive capacity of an organisation and, to a large extent, the performance of the economy. The degree of effectiveness of the implementation of new knowledge depends on the readiness with which such knowledge is gathered and assimilated into the internal processes of the organisation. This is a chief determinant of the growth potential of any organisation and its workforce. The changing geographies of business, the changes in the tastes and preferences of consumers, the advancements in technology, the evolution of competitive strategies and the changing demographics at the workplace are some of the major changes that demand a spontaneous and proactive response. The resulting reactions of the organizations occur through a number of stages interspersed by acquired knowledge and responsive action that flow to form new knowledge (Spinel, 1998). Accordingly, the resultant changes in organizations in response to the market demands give an estimate of the quality and quantity of the assimilated knowledge, as well as the swiftness with which such knowledge moves across the organization and subsequently gets adopted (McKenna, 1995). 4.0 The elements of Interpersonal Trust at Work 4.1 Confidence in Peers The flow of knowledge across the organisation has to abide by a certain set of norms and rules. Some of these are explicitly stated, while some are implicit. One such implicit norm is that of interpersonal trust, which plays a vital role during the vertical and lateral transmission of information through the various tiers of an organisation: the indvidual level, the group level and the organisational level. The imlementation of knowledge management in any organisation is based on a given level of trust. Theoretically, organisational trust involves risk-taking and leveraging of individuals’ actions for businesses (Lucky & Bunker, 1996). The acquisition and sharing of knowledge in an organisation is worthwhile when it is based on the mutual confidence in each others’ competence and capability and the firm faith that the shared ideas will be used for the benefit of the organisation in a fair and ethical way. This kind of faith or trust in each other amongst employees with respect to the shared knowledge and ideas is the key to eliminating the fear or insecurity that they might act irresponsibly or inappropriately to derive benefits from ideas that have been collectively generated. (Bradach & Eccles 1989) 4.2 Faith in Peers The environment of a firm is largely responsible for the extent to which its employees are willing or motivated to create, reveal, share and utilize knowledge with the firm. The sharing of information takes place effortlessly in an atmosphere that ensures to safeguard the hierachical position and organisational image of the individuals who participate in such activities. According to Ann Walmsley (1993), mutual trust or faith in co-workers is the key to achieving the maximum potential of the firm and also of the individual employees (Geoffrey, 1997). This can be enhanced by developing a culture of consultation within the organisation. This practice should be adopted right at the apex of top management, whereby the managers show appreciation for the views and opinions of the employees. Research has established that employees are more inclined to share their thoughts if they have the belief that their contributions are important and will be incorporated into the final decisions (Asgharian et al., 2013). The very proclivity to share is further encouraged if it is reciprocated by an honest and cooperative behavior based on commonly shared principles on the part of the members of the organization (Fukuyama, 1995, p. 26). 4.3 Faith/Confidence in Leadership The stance of the leaders is a very critical factor that determines the degree of dissemination of information within the organisation. The degree of transparency and spontaneity with which the leaders share any relevant information with the employees decides, to a great extent, their willingness to take part in the knowledge sharing process. The mutual trust that runs through the organization should eradicate barriers and enable people within civil service to share resources and skills to achieve collective objectives. Organisations should aim at creating an atmosphere of confidence and candidness that does not suppress creativity by “hiding knowledge” (Adli, 2006). Any incoming knowledge is a change agent in an organisation and influences the dynamics of the firm. No employee would obviously be willing to share any new information, if doing so involves the risk of ruining his/her relations with peers or bosses. Moreover, any new information or practice will be dissuaded at once if the employee is not sure whether his suggetsions will be taken seriously and will be made a part of the firm’s future course of action. Such a redeeming faith in the leadership is an essential ingredient to a functional and collaborative workforce (Davenport & Prusak 1998). On the other hand, if the management shows no recognition for the legitimate actions of employees, or tends to manipulate individual ideas or withhold information, empoyees will find it difficult to share information in such an environment (Nyhan, 2000). Accomodative leadership that encourages openness creates an ideal atmosphere for the generation and spread of new ideas. It also makes sure that any relevant information is passed on as soon as it is received. Creativity and innovaton flourish in a wrk culture that is free form any kind of fear. So an organisation should focus on building up an environment of faith and trust both within its internal members and its external stakeholders and clients. (Building Trust, 2013). David Horsager (2012) sums up the essence of organisational trust: “The greatest leaders and organizations of all time have had the same competitive edge. They were trusted….While it may appear to be static, trust is more like a forest -- a long time growing, but easily burned down with a touch of carelessness.” (Horsager, 2012) 5.0 Knowledge Responsiveness within the Organization 5.1 Creativity and Innovation The application of knowledge to real-life business situations requires the interplay of the twin concepts of creativity and innovtaion. These two concepts can be assigned distinct definitions in theory, but in practice these are interlinked. The interaction of these two concepts helps in the development of knowledge and its consequent transformation into business value. Creativity is about the generating new knowledge from the available information, while innovation is about the applying the new knowledge. Both these elements overlap now and then to create a synchronised mix of business value. 5.2 Productivity Business in the 21st century demands nothing else but excellence. In such a scenario, knowledge management in organisations is aimed at fostering creativity and innovation at all levels to enhance productivity and competitive edge in the market (Wiig, 2004). Moderation of information to create a business value that suits the ongoing market trends is what should be the purpose of knowledge management (Gurteen, 1998). The world today is a knowledge-driven economy, and UAE is no exception to that. In the receny times, UAE has rapidly evolved as a fast developing nations and has registered a very high GDP and per capita income when compared to other developed countries. It has made heavy investments in education and technical knowhow. UAE’s Information and Communication Technology is regarded as one of the best in the entire Arab world (Abdallah, Khalil, and Divine, 2012). As opposed to its traditional image as a leader in the energy sector, UAE has now diversified its economy and made it more receptive to knowledge and innovation from the outer world. 6.0 Hypothesis Followed by a thorough study of the aforesaid concepts, this paper seeks to work on the following three hypotheses:- Hypothesis 1: Knowledge management is directly related to the success of an organization. Hypothesis 2: Establishment of knowledge management is related to the level of trust in an organization. Hypothesis 3: The success and productivity of an organisation is related to the level of creativity and innovation in the organization. 7.0 Methodology 7.1 Participants A standard questionnaire was prepared in order to establish the validity of the relation between Knowledge Management, Organizational Trust, Creativity and Innovation. The survey sample consisted of 548 people from UAE, both male and female, aged above 16 years of age. These respondents belonged to diverse races, religions, nationalities and were selected by random sampling method, to ensure greater authenticity of the results. 7.2 Method of data collection In order to collect data for the study, questionnaires were used. The questionnaire method was used owing to its greater efficiency as compared to other methods such as interviews. The information could be collected from a large number of respondents in a comparatively short period of time. This method also ensured uniformity and comparability because each respondent received exactly the same set of questions. The aim of the study was indicated in the questionnaire. To maintain anonymity, the respondents were asked not to write their names on the questionnaires. They were then requested to return the questionnaires to the University via internal mail. However, in some cases, one-to-one interaction with the respondents had to be employed to explain to them the purpose of the survey and resolve their queries wherever required. The use of questionnaire was done at random in order to ensure the validity of the results. The hypotheses formulated in the research were then tested against the survey results. 7.3 Procedure The questionnaires were distributed to the respondents at the beginning or at the end of each class. The purpose of the study was conveyed to the students verbally. Respondents were then requested to return the filled up questionnaires to the lecturer via the University internal mail. This was followed by an online reminder that was sent to each participant after a few days through the University website. After collecting all the data sheets, the data was analysed to get the results. 7.4 Results From the analysis of the collected data, the following results were derived that showed the correlations and the Average (µ) value as follow. Correlations for UAE Sample Sample Size N = 548   Trust KMB Creativity Innovation Productivity Trust 1 KMB 0.400082 1 Creativity 0.2325944 0.2669091 1 Innovation 0.1999394 0.1901472 0.32845674 1 Productivity 0.1169916 0.414309 0.06357093 0.423597396 1   Trust KMB Creativity Innovation Productivity Trust 1 KMB 0.17205 1 Creativity -0.11834 -0.0126 1 Innovation -0.17266 -0.14436 0.14172 1 Productivity 0.079024 -0.09947 -0.21089 0.08579 1 Correlations for UAE ARMY in chart Correlations for UAE Sample in chart This chart shows the levels of organisational trust, knowledge management, creativity, productivity and innovation for the UAE Army. Variable relationship: In this section a correlation between each variable is shown in a single graph where a variable is described in a graph and being compared with the rest of variables. The result shows that trust increases the innovation of employees. Trust influences the knowledge management, creativity, productivity and innovation. Trust in management makes the employee innovative and somehow it increases the KMB. 7.5 Challenges and Limitations While conducting the study, a few challenges came up. During the survey, ensuring that the respondents cooperate fully was a tough task. During analysis of the data, some respondents left the questionnaires incomplete or did not answer the questions as expected. This compelled us to make assumptions and round up the data figures, which would have affected the accuracy of the results. 8.0 Conclusion Finally, the study proves that there is a direct relationship between Knowledge Management, Organizational Trust, Creativity and Innovation with respect to the productivity of organizations in UAE. A high level of trust enables the employees to share their knowledge and opinions with their superiors. This helps to foster an environment conducive to creativity and innovation, subsequently leading to enhanced productivity and success of an organisation. 9.0 Time management Date and Duration Research Topic December 2013 1st Week Breakdown of the research structure December 2013 2nd Week Design of the questionnaires December 2013 3rd Week Distribution of the questionnaires January 2014 1st Week Collection of the questionnaires January 2014 2nd Week Data Analysis and Conclusion January 2014 3rd Week Report writing References: Abdallah, S., Khalil, A., and Divine, A. (2012) ‘The Impact of Knowledge Sharing on Innovation Capability in United Arab Emirates Organizations’, World academy of Science, Engineering and Technology, 72, 974-977. Adli, F. (2006) Knowledge management, Moving beyond science, Tehran: Farashenakhti Andisheh Publications. Asgharian R., et al. 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