Knowledge Management as the Key to Employee-Learning and Productivity: Indian Micro-financial Institutions - Research Proposal Example

Knowledge Management as the Key to Employee-Learning and Productivity- A Study of Indian Micro-financial s Introduction In the modern business of innovative and learning environment, knowledge has become a key driver in the success and survival of organisations regardless of type, size and nature. It is considered one of the most valuable assets that can enhance the learning opportunities and productivity of labour force. Organisations across industries and countries have realised that knowledge and its management can be a key differentiator in the highly competitive business world. Realising this, there have been efforts across business organisations all over the world that knowledge management is taken as a core strategy that can enhance business opportunities to capture, process and share information and knowledge. In an organisational context, knowledge management refers to the activities concerned with capturing, processing and diffusion of knowledge for the purpose of decision making and forward planning by management. The present study examines how effective is the knowledge management in an organisation to foster innovation and enhance labour productivity within the organization. Research Background Organisations have no chance of success and growth without knowledge management in the modern information-driven economy. Today organisations are trying to become more and more innovative and competitive than their rivals in regard to their knowledge gathering and dissemination. Irrespective of the type, size and nature, organisations have acknowledged the fact that knowledge management enhances the possibilities of employee learning and productivity. It has been observed by experts that learning environment is vital in modern organisations to survive and success and knowledge management gives a platform for learning opportunities and innovative thinking. It has been proved by experts (Gibbons, 1994; Nonaka et al., 1995 and 2000; and Howells, 1996) that the very basis of innovation is knowledge sharing activities. An interactive and cooperative organisational environment is very conducive for knowledge transfer and sharing that foster employee learning and productivity (Gold et al., 2001). With this background, the present study attempts to evaluate how effective is the knowledge management system in micro-financial institutions to help in employee learning and increased productivity. Problem Statement Despite there are endless efforts to implement knowledge management across organisations of small as well as large among both public and private organisations, little effort has been made so far to introduce the same in the micro financial institutions in India. Micro financial institutions such as grameen koota, Bandhan (society and NBFC), Saadhna microfin society, asmitha microfin Ltd., and micro-credit foundation are the most sought after place for poor sections of the society for their financial needs. Most of the micro financial institutions have been set up on a small scale basis without giving emphasis on modern information system and knowledge management. The lack of knowledge management system can result in poor information processing, knowledge sharing; which ultimately affect the labour productivity and organisational performance. At this juncture, the present study is relevant to examine the effectiveness of knowledge management system among micro-finance institutions in India. Literature Review Any studies have been undertaken across the world on knowledge management and related topics such as learning ad innovation. The following few paragraphs detail the important literature on the topic: In the words of Thomas H Davenport and Laurece Prusak, “knowledge is a fluid mix of framed experience, values, contextual information, and grounded intuition that provides an environment and framework for evaluating and incorporating new experiences and information” (Davenport 1998). With regards to the statement, it can be concluded that sharing is facilitated primarily through interpretation of the information (and its source), and evaluation on the basis of the learning shaped in the acquired cultural system. While learning has an impact in the sense that it provides for most close approximation of result, culture affects learning by affecting the interpretation of the subject information. Thus, information analysis (generally tacit) and its evaluation severely depend upon the culture indirectly and on learning directly A survey study on knowledge management comes out with another definition, which is quite popular. The survey concludes that “KM implies any systematical activity regarding the capture and the diffusion of the knowledge by the organization" (Earl 1999). In the organisational context, Knowledge Management (KM) has become one of the most sought after management tool that can promote the knowledge creating and sharing processes, essential for innovation and development. In the present day business scenario, competitiveness depends upon the innovative practices that a firm has adapted to enhance market positions. However, the level of innovation is directly proportional to the ways in which employees create and share their knowledge in order to benefit the organization. To ensure this, employees need to be provided with appropriate environment and physical infrastructure i.e., social information system. Such information system also provides the scope for informal communication. E Wenger and S Gourlay have remarked that “knowledge can be entrenched in the work through social activities of the group who set knowledge wholly explicit, set down in databases and manuals to form information and facilitate sharing through network known as community of practice” (Wenger, 1996; Gourlay, 1999). Therefore, managing and sharing knowledge can be attributed as highly intellectual activity and whose most prominent function is to infuse innovation. This reflects upon the people of the organization in the form of knowledge community that forms, leads and controls groups; holds good working technical understanding; motivated internally with matured behavior, contributes to knowledge processing and sharing in departments; works in team hierarchy and exercises parameter based approach to enhance productivity by formulating and establishing best practices within the firm. Knowledge sharing allows us to lead change. It provides organization and its personnel to develop ability to exploit knowledge for competitive change. In other words, it is the `window of opportunity rather a solution to a business problem. It is the culture (of sharing) driven on technology. With knowledge dissemination, technology automatically upgrades to next higher level to facilitate the objective of speedier sharing for timely use of information. Knowledge sharing, thus, also augments the productivity, competence, and resource allocation in an organization. It helps in collaborative decision-making of individuals and groups, to create more economic value for the organization. A knowledge sharing system thus, would help in connecting persons, identifying the gaps, exploring the tacit side of knowledge form; benchmarking of knowledge practices and creating a learning organization. This system thus, established is rather an innovative approach than merely a problem solving approach. The competition shall be sustained by those organizations that have recognized the need for developing a system of knowledge building and sharing, with enough flexibility to contribute to the practice of knowledge commercialization. The challenge, however, in knowledge sharing is to ensure that people benefit from developing and sharing knowledge. Developing a perfect knowledge framework is the first thing to start with. Determine what could be done to encourage knowledge creation and sharing, e.g., give people time to think and time to talk, plan how to address identified barriers and how the management can show its serious interest in knowledge creation and sharing. This shall entail identifying information gaps, filling them with suitable IT infrastructure, for managing resources and finding right sharing approach. Sharing approach must focus on bridging networks of information between individuals and groups through intranet and linking functional units for timely information exchange. It must focus on analyzing the difference between the knowledge needs in different parts of the organization and the scope of creating knowledge for such domains. This creates a clear understanding - what type of knowledge is important for delivering strategic objectives and how the technology can be utilized to achieve the goals of access, use, develop and share information. Finally, enable people to develop skills through pre-disposed learning techniques in the order of their use. This shall help in the development of knowledge friendly culture by aligning people with business vision. In this way, social renaissance becomes the key objective of knowledge sharing, and therefore could be labeled as modern age tool to convalescing. Objectives of the Study The basic purpose of the study is to analyse the significance of knowledge management in improving the employee learning and productivity in micro-financial institutions in India. Specifically, the objectives can be outlined as below: To highlight the relevance and importance of knowledge management in micro-financial institutions; To examine the effectiveness with which Knowledge Management system has been implemented; To measure how effective is the Knowledge Management to enhance possibilities for employee learning and productivity. Hypotheses The following hypotheses have been formulated in the study. H1: Knowledge management enhances knowledge sharing between employees in the organisation; H2: Employee Learning and labour productivity is higher among organisations that have implemented knowledge management system. Research Methodology The overall methodology for the present study is discussed in the following few paragraphs: Research Design The present study is a descriptive as well as explorative one. It is descriptive in the sense that the researcher tries to describe the present status of the knowledge management system prevalent among the micro-financial institutions in the country. It also tries to relate the employee learning, productivity and knowledge management practices. The researcher wants to explore whether the general notion that knowledge management enhances employee learning opportunities and productivity- applicable to micro-finance institutions in the country. It takes a survey approach to gather data on relevant variables. A focused interview has been conducted among the key employees of the selected number of micro finance institutions located in the northern part of the country. From the selected institutions, a good number of sample employees have been selected as respondents for the focused interview. Sampling Design and Procedure Sampling procedure is the process of drawing sample units from a population to infer about the population. The selection of sampling procedure is a serious affair because the one selected must be appropriate for the situation. As there are a number of sampling methods, the researcher has to select the apt one which ensures high accuracy, low personal bias and other considerations like time, cost etc. Random Sampling/ Probability Sampling method is the most commonly used method as it ensures the presence of above parameters. The sample selection for the purpose of this study involves two stages. In the first stage, as many as 10 financial institutions have been selected on a convenient basis. However, the sample employee respondents from each of the financial institutions have been selected using simple random sampling. From each financial institution, 10 key employees were selected to form the focused group for the interview. Therefore, the total sample size is fixed to be 100 (10x 10). The samples selected were then approached for a focused interview after fixing appointment. Data Collection and Sources The study relies solely on primary data. The data are proposed to be collected after a focused interview with selected employees from each of the sample financial institutions. Focus interview is conducted separately for each unit with the same questions. An interview schedule has been prepared after testing the same through a pilot survey. The questions were prepared in such manner that some changes can be made, if needed at the time of interview. Data Editing The data collected from primary source always need editing. Editing is the process of eliminating the errors and mistakes from the raw data so as to make them ready for further analysis. Editing is done for eliminating mistakes, completing an incomplete data, omitting errors etc. The secondary data need not be edited as they are in processed form and they have been collected by somebody for some other purpose. However some kind of arrangement may be necessary so as to make them ready for analysis. Data Coding The edited data are converted in to another form called codes for easy and convenient analysis. Codes are used to convert data which are lengthy and cumbersome for analysis. Coding is made in the Microsoft Excel Spreadsheet Program. Data Analysis and Findings After the data have been tabulated and coded for easiness and convenience for further processing, the next step is analysis. Analysis involves the conversion of raw data into meaningful information so as to make them appropriate for arriving at logical finding and conclusions. A detailed analysis has been carried out using SPPS package. The analysis involves the establishment relationship between various variables and exploring the reasons thereof. Limitations of the Study The study is basically a sample survey research. Therefore, sampling errors are the first and foremost problem of the study. However, maximum effort has been made by the researcher to minimize the sampling errors by properly selecting the sample method and sample units. Moreover, there are three sets of sample for the study which involve different respondents. The reliability of the information collected can be assured, but how accurate it would be is still uncertain. Therefore, personal bias of the respondent as well as the researcher may be included. 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Organizational Learning, 3rd International Conference, Lancaster University, June 6-8, Vol. 1, pp. 479-495 Howells J (1996), "Tacit Knowledge, Innovation and Technology Transfer", Technology Analysis & Strategic Management, Vol. 8, No. 2, pp. 91-106 Nonaka I and Hirotaka Takeuchi (1995), The Knowledge Creating Company, Oxford University Press, New York. Nonaka I, Toyama R and Konno N (2000), "SECI, Ba and Leadership", Long Range Planning, No. 33, pp. 5-34. Ojha K Abhoy (2001), "Building a Knowledge Organization: Overcoming Individual and Organizational Barriers", IIMB Management Review, December, pp. 64-73. Porter Michael E (1980), "Competitive Strategy - Techniques for Analyzing Industries and Competitors", First Free Press Export ed., 2004, pp. 49-59. 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