Interrelationships among knowledge management ...

Int. J. Innovation and Learning, Vol. 9, No. 2, 2011

Interrelationships among knowledge management, organisational learning and innovation Rapee Kanchana Department of Industrial Engineering, Rajamangala University of Technology Thanyaburi, Pathumthanee 12110, Thailand E-mail: [email protected]

Kris M.Y. Law Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, 6/F, Chan Sui Wai Building, Hung Hom, Hong Kong E-mail: [email protected]

Narongsak Comepa, Prichaya Malithong and Kongkiti Phusavat* Department of Industrial Engineering, Kasetsart University, Bangkok 10900, Thailand E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] *Corresponding author Abstract: This study aims to describe the interrelationships among knowledge management, organisational learning and innovation. This description potentially helps a company’s preparation for the application of the quality management award. The Thailand Quality Award highlights the interrelationships among knowledge management, workforce focus and leadership as they contribute to learning and innovation, continuous performance improvement and organisational competitiveness. A total of 35 manufacturing firms completed and returned the survey. The interviews with chief quality officers were also conducted to help interpret the survey’s findings. The results show that effective knowledge management will lead to better learning and subsequently more innovativeness in an organisation. These results also indicate the importance of leadership in establishing supportive cultures and working environment for effective knowledge management. Keywords: quality management; knowledge management; KM; organisational learning; innovation. Reference to this paper should be made as follows: Kanchana, R., Law, K.M.Y., Comepa, N., Malithong, P. and Phusavat, K. (2011) ‘Interrelationships among knowledge management, organisational learning and innovation’, Int. J. Innovation and Learning, Vol. 9, No. 2, pp.145–162. Copyright © 2011 Inderscience Enterprises Ltd.

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R. Kanchana et al. Biographical notes: Rapee Kanchana is currently a Lecturer at Rajamangala University of Technology Thanyaburi. She recently graduated with a Doctoral degree from International Graduate Program in Industrial Engineering, Kasetsart University. Her specialised areas include commercial logistics and supplier management. Kris M.Y. Law is a Lecturer at Hong Kong Polytechnic University. She is also a Visiting Fellow at the Graduate Institute of Industrial Engineering, National Taiwan University. Her research interests are in the areas of organisational learning and development, knowledge management and innovation, engineering education and sustainable development in high-tech industries, etc. Narongsak Comepa is currently pursuing his Doctoral at International Graduate Program in Industrial Engineering, Kasetsart University. He is a Senior Engineer at Western Digital (Thailand) in charge of giving advices and recommendations for planning and operations. Prichaya Malithong is currently pursuing her Masters in Engineering Management at International Graduate Program in Industrial Engineering, Kasetsart University. Previously, she was a trainee at Office of the Public Sector Development Commission. Kongkiti Phusavat is an Associate Professor and Director of International Graduate Program in Industrial Engineering at Kasetsart University. He received his Doctoral in Industrial and Systems Engineering from Virginia Tech in 1995. His current research interests include performance measurement, acquisition logistics and management system analysis and modelling.

1

Introduction

Presently, the pressures for Thai businesses to make strategic and operational changes have been growing since the country’s last economic crisis in 1997 (Manasserian, 2005). In particular, these changes can be attributed to the swift development of China, India and other countries that are capable of producing goods and services at lower cost.1 Moreover, the changes are inevitable due to an emerging trend in knowledge economy in which innovation is considered to be one of the key success factors (Mei and Nie, 2008). Unfortunately, Manasserian (2005) pointed out that several organisations in developing countries had merely improved their innovation by utilising heavily on know-how and technologies from outside sources. These practices raised the concern on sustainability and long-term viability of a firm (Steiner, 2008). Thailand Quality Award (TQA) represents one of the most recognised awards for all industries in Thailand.2 The TQA is part of the overall joint efforts by the public and private sectors to promote the long-term competitiveness and continuous performance improvement. Essentially, the TQA is identical to the Malcolm Baldrige National Quality Award (MBNQA) of the USA. It is important at this point to note that the MBNQA has been adopted by many countries such as Singapore (i.e., Singapore Quality Award), Malaysia (Prime Minister Quality Award) and Taiwan (Taiwan National Quality Award). In addition to the MBNQA, there are other similar awards that are recognised globally such as European Foundation for Quality Management Award and Japan’s Deming Prize.

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Generally, the above quality awards tend to emphasise how an organisation can continuously change and improve its performance in the areas of productivity, quality and innovation (Vokurka, 2004). This emphasis includes: 1

how an organisation learns and overcomes intense competition

2

how an organisation responds to customer needs by building and maintaining strong relationships with them

3

how an organisation utilise performance information to help gain better knowledge for continuous learning and innovation

4

how an organisation deals with and involves its workforce.

Figure 1

MBNQA and its categories (see online version for colours)

Source: Available at http://www.baldrige.nist.gov/Business_Criteria.htm (accessed on 10 August 2009)

Since the TQA inception the early 2000s, the focus of private firms has begun to shift from merely striving for ISO 9001: 2000 to achieving the excellence in their quality management. In addition, the application to the quality-related awards has benefited a company in various ways (Ivanovic and Majstorovic, 2006). Fist of all, the application helps evaluate the capability and maturity of its quality management practices. It also provides a milestone for a company’s progress towards quality and performance. This application can provide outside pressure for an organisation towards changes and innovation. Despite the growing acceptance of TQA, the award’ sceptics and supporters

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have advocated the need for better information on practices and insights into the interrelationships among its different categories.3 It is important to note that there are several categories within the TQA. Similarly to the MBNQA, they are: leadership; strategic planning; customer and market focus; measurement, analysis and KM; workforce focus; process management; and results (see Figure 1). The remaining sections of the paper can be described as follows. The second section focuses on providing information on the problem as well as the issues relating to knowledge management (KM), innovation and learning and continuous performance improvement. The third section discusses the research objectives. The fourth section describes the research methodology while the fifth section demonstrates the findings. The sixth section concentrates on the results’ implications. Finally, the limitations and conclusions are stated.

2

Problem background

One of the most difficulties facing manufacturers and service providers alike when preparing their TQA applications is how to link various key features within and across each of the award’ seven categories, especially categories 1, 4 and 5 (leadership, workforce focus and measurement/analysis/KM, respectively). Although there is no specific or best way to relate these key terms such as KM, learning, innovative performance and competitiveness; the need to reveal how they are perceived by top managers and executives is still important for future TQA preparations4. This is further supported by a policy to strengthen industrial competitiveness that is under the jurisdiction of Department of Industrial Work and Thailand Productivity Institute. Based on the Thai Industrial Standards Institute5, there were more than 7,300 companies that had been ISO 9001: 2000 certified in Thailand at the beginning of 2008. In order to promote quality management practices further, the Federation of Thai Industries have encouraged these ISO-certified companies to apply the TQA.6 Based on the TQA, sustaining organisational innovation involves KM, workforces, cultures and working environment, organisational learning and technology (Lee et al., 2008). Strong leadership is expected to establish supportive organisational cultures and working environment. Effective learning further contributes to innovation and organisational long-term capability to overcome intense competition from local and international firms. For some, innovation should incorporate both product and operational innovation (Blayse and Manley, 2004; Melton et al., 2006). New product development often associates with innovation. At the same time, technology investment, and incremental and drastic changes in work processes reflect operational innovation. In other words, process innovation deals with the improvement in process management, new work methods and applications of new technology. Innovation has also been recognised as one of the important criteria for organisational performance (Sink and Tuttle, 1989; Neely, 2002). Rogers (1983) defined innovation as a new idea and practice or object perceived by others. Sink and Tuttle (1989) refer to innovation as an ability to change over time. Furthermore, Hoehn (2003) described innovation as a new idea that has not been developed. Hoehn (2003) stated that the challenge relating innovation was how to manage it in an integrative way (e.g., workforce, technology, customers and suppliers) that would sustain competitiveness and continuous performance improvement. KM has played a critical role in strengthening


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innovations within an organisation (Neely, 2002). KM focuses on how knowledge can be effectively utilised within an organisation (Nonaka, 1991). It stresses the importance of data/information, expertise/skills and experiences to ensure continuous learning and improvement (Dayan and Evans, 2006). Its successes depend largely on how an organisation views its workforce (Liebowitz et al., 2007). Executives need to blend competency and motivation so that sharing and transfer of knowledge can constantly take place. Nowadays, the integration of information and communication technology has enabled KM to be extensively practiced throughout an organisation, including e-mail and e-learning (Hoehn, 2003; Lee et al., 2008). At the same time, consistent and unwavering leadership in KM is quite essential for an organisation’s drive towards more innovation. Specifically, KM deals with the creation, acquisition, capture, sharing and application of knowledge and skills (Nonaka and Takeuchi, 1995; Swan et al., 1999; Dey et al., 2009). Johannessen et al. (1999) urged an organisation to focus on KM when strengthening its innovation. In other words, organisational innovation can be enhanced by an effective KM system (Prasracos et al., 2002; Chanal, 2004). They further suggested the importance of external knowledge in pursuit of organisational innovation. Finally, organisational long-term competitiveness relies on how well knowledge is acquired, shared and transferred among staffs (Prahalad and Hamel, 1990; Leonard-Barton, 1995). The innovativeness within an organisation also depends on how well an organisation deals with its own intellectual property or IP. The IP enables an organisation to benefit from its innovations and creative work and to prevent others from unfairly gaining from this creativity. The IP reflects a company’s commitment in time and resources to develop innovative products and technologies, and subsequently to expand knowledge and intellectual capital (Villadsen, 1995; Stewart, 1997). In summary, the IP indicates how well an organisation manages its creativity and new ideas for both product development and process improvement. The sources of intelligence have played a critical role in creating organisational innovation (Drucker, 1985). He further suggested the need to utilise both internal and external sources such as past mistakes, market demands, demographical changes, public perception and new technology and scientific findings. The experiences from individual staffs are also considered to be an important source of intelligence (Nonaka, 1991). Therefore, learning from past mistakes and customer complaints represents one of several ways to enhance an organisation’s knowledge assets (Schilling, 2008). Even benchmarking with other firms can be helpful in gaining valuable expertise and experiences (Kannan and Tan, 2003). Moreover, applying for public awards and recognition as well as participating in conferences and social gatherings can potentially help increase organisational innovation. Learning capability within an organisation can contribute greatly to continuous improvement and innovation (Chiva-Gomez, 2003; Hung et al., 2005). Organisational communication, structure and cultures are part of this capability (Nonaka and Takeuchi, 1995; Dey et al., 2009). Dickson (1996) also suggested that learning capability depended on how effective a company could use its available resources to compete in a market. In addition, learning routines (e.g., morning meetings and on-the-job learning) and cultures (e.g., open-mindedness and mindset) should be constantly promoted (Larsen et al., 1991; Guan and Ma, 2003; Chanal, 2004; Ju et al., 2006). From the workforce’s viewpoint, the motivation helps sustain effective KM practices and process innovation (Nonaka, 1991). For examples, new ideas and suggestions for low-cost airlines (e.g., Southwest Airlines)

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have come mainly from their staffs. They are motivated to provide improvement suggestions since they own the airline’ shares. The positive reinforcement should constantly be used to ensure continuous motivation within an organisation (Rogers, 1983; Badawy, 1988; Sankar et al., 1991). Finally, based on the above literatures, a comprehensive framework on organisational innovation can be described as follows. Continuous innovation within a company depends on: 1

constantly creating innovation with short- and long-term plans

2

effective KM

3

bottom-up creativity development

4

flexible organisation structure and open communication

5

participative-management practices

6

adaptability to changes from internal and external sources such as staff retirements, aging population of consumers, healthy life styles and technology convergence.

Despite some clarity in the above general viewpoint, how top managers and executives perceive possible interrelationships (e.g., causal, mutual, supportive, etc.) among the key factors mentioned in the TQA is important for a future award application.

3

Objectives

The overall objective of this study is to gain better understandings on the interrelationships among KM, workforce focus and leadership. Furthermore, the strengths of their relationships are to be quantified and closely examined. These understandings are expected to help future companies for their future TQA applications. Figure 2

Process overview

Survey design and development

• •

Based on literature on the innovation systems Developed by the OSLO Manual (3rd edition)

Data collection and initial analysis

35 surveys completed and returned

More detailed data analysis

Testing by applying statistical method such as reliability analysis, normality test and correlation analysis

Results and discussion

Discussion with chief executive officers (CEOs) from TQA winners and firms recognised for Thailand Quality Class (i.e., two manufactures and one service provider)


4

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Methodology

There were several steps undertaken for the study’s completion. They included survey development and distribution, statistical analyses on the responses and the discussion on the findings. For this study, the survey’s development was based on the Oslo Manual. This Oslo Manual7 was earlier developed and extensively promoted by the Organisation for Economic Cooperation and Development for the integrative efforts on KM, learning and innovation. It was also referred to as the ‘Measurement of scientific and technological activities, proposed guidelines for collecting and interpreting technological innovation data’. The Oslo Manual contains several factors relating to innovation; e.g., sources of knowledge and technology, company innovation activities, motivating factors of innovation, perceived obstacles to innovation and company innovation performance (see Figure 2). The survey contents consists of several items such as IP practices, KM practices, sources of knowledge and technology, OL activities, OL routines, etc. See Appendix A for some of the items’ details. In the survey, the respondents were asked to evaluate the degree of frequency or of importance on the detailed subjects in each item. The sevenpoint scale was applied, ranging from 1 (least importance) to 7 (extremely important). The surveys’ responses were evaluated statistically by using the SPSS®. The analyses primarily included descriptive statistics (e.g., mean score and standard deviation), reliability analysis, normality test, scatter plot and correlation analysis. Table 1

Profiles of respondents

Parameters

Number

Percentage (%)

5

14.29

Industrial type Semiconductor manufacturing Electronics manufacturing

10

28.57

Machine and material-intensive manufacturing

17

48.57

Other industries (i.e., biochemical, energy related, etc.)

3

8.57

< 199

4

11.43

200–699

3

8.57

Firm size

700–999

4

11.43

> 1,000

24

68.57

2

5.71

Position in a company Chief executive officers and general manager, or equivalent plan manger, functional head or equivalent

2

5.71

departmental manager, senior engineer or equivalent

31

88.58

Consumers

14

40.00

Industrial organisations

21

Key clients

Total responses

60.00 35

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More than 100 surveys were initially sent to various companies belonging to Federation of Thai Industries. There were 35 questionnaires completed and returned. All returned surveys came from the companies that had earlier applied or intended to apply the TQA. Electronics companies operating in machine- and material-intensive industries (e.g., automotive and automobile parts) made up most of the returned surveys. The companies, participated in the survey, were considered large (i.e., more than 1,000 workers). All executives who completed the surveys were considered to be middle to top management (see Table 1). To help verify the usefulness of the responses, the results in each item in the survey were evaluated for the internal consistency by using Cronbach’s α. The values of α in excess of 0.70 are acceptable for future interpretations (Kannan and Tan, 2003). The value of α from the survey results was 0.906. An additional test was conducted and revealed that, when the item J was excluded, the value of α increased to 0.920. As a result, only eight items were considered for the study. The next step involved a further statistical test on the normality test. This was achieved by applying the Shapiro-Wilk technique – due to the sample size of less than 50. The results indicated the two-tailed significance of all eight items were greater than the level of 0.05. As a result, it was reasonable to conclude that all eight items were derived from the normal distribution. This step was essential for using the correlation analysis (see Table 2). Table 2

Tests of normality Shapiro-Wilk

Items

Statistic

df

Sig.a and*

A

IP practices

0.969

35

0.424

B

KM practices

0.968

35

0.391

C

Sources of knowledge and technology

0.960

35

0.232

D

OL activities

0.979

35

0.724

E

OL routines

0.984

35

0.867

G

Innovation activities

0.986

35

0.924

I.1

Motivating factors for product innovation

0.975

35

0.601

I.2

Motivating factors for process innovation

0.969

35

0.409

Notes: aLilliefors significance correction. *This is a lower bound of the true significance.

5

Results

From the survey responses, the average values were generally greater than 4.0. The top scores were: 1

motivating factors for process innovation

2

IP practices

3

motivating factors for product innovation

4

KM practices.


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As a department manager, his/her concerns were by and large on process management. They were likely involved less with a strategic decision on how learning would be developed. On the other hand, they actively engaged in process improvement and helped drive organisational competitiveness. Nevertheless, all items were generally perceived to be important. The standard deviation values showed the uniformity in the survey participants’ perception. Please note again that the survey contained the seven-point scale, ranging from 1 (least importance) to 7 (extremely important) (see Table 3 and Appendix B). Table 3

Descriptive statistics

Items

N

Mean

Std. deviation

A

IP practices

35

4.95

1.30

B

KM practices

35

4.75

1.33

C


35

3.95

1.02

D

OL activities

35

4.28

1.25

E

OL routines

35

4.23

1.27

G


35

4.06

1.49

I.1


35

4.82

1.32

I.2


35

5.06

1.08

Table 4

A

Illustration of the correlations analysis

IP practices

B

KM practices

C


D

OL activities

E

OL routines

G


I.1


I.2


A

B

C

D

E

G

I.1

I.2

1

.573**

.589**

.697**

.697**

.764**

.664**

.501**

1

.702**

.742**

.747**

.761**

.418*

.627**

1

.784**

.838**

.711**

.554**

.629**

1

.845**

.716**

.589**

.612**

1

.812**

.694**

.723**

1

.702**

.517**

1

.571**

1

Notes: **Correlation is significant at the 0.01 level (2-tailed). *Correlation is significant at the 0.05 level (2-tailed).

In order to gain better insights in the survey responses, the correlation analysis was applied. Its application aimed to determine a possible relationship between the two items. From the findings, the five strongest relationships were:

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1

OL routines and OL activities

2

OL routines and sources of knowledge and technology

3

OL routines and innovation activities

4

IP practices and innovation activities

5

KM practices and innovation activities (see Table 4; also see Appendix A).

6

Discussion and implications

The findings, from Table 4, indicated the strong interrelationships among OL routines, OL activities, innovation activities, and sources of knowledge and technology, IP practices and KM practices. It appeared that top executives viewed that KM practices, IP practices and OL routines were essential for innovativeness within an organisation. In addition, OL routines were perceived to be critical and they relate strongly to sources of knowledge and technology, OL activities and innovation activities. •

OL routines and source of knowledge and technology (0.838)

•

OL routines and OL activities (0.845)

•

OL routines and innovation activities (0.812)

•

IP practices and innovation activities (0.764)

•

KM practices and innovation activities (0.761)

To help visualise these interrelationships, a diagram was developed (see Figure 3). Figure 3

Detailed interrelationships among KM, organisational learning and innovation

Sources of knowledge and technology OL routines

IP practices

KM practices

OL activities



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To simplify these interrelationships further, three special sessions were separately organised with chief quality officers (CQOs) from one firm that won the TQA and two companies that were recognised for their Thailand Quality Class (i.e., the first step towards the TQA). The Thailand Quality Class was created for an organisation that its score is between 350 to 550 pints after two rounds of an independent review. An organisation that receives a score above 550 points is nominated for the TQA. The three CQOs were from two manufacturing firms and one healthcare service provider. Their overall comments can be summarised as follows. 1

OL routines, IP practices and KM practices needed to be based on organisational policies. They needed to be constantly promoted and encouraged. If these three items were consistently practiced, it would indicate organisational cultures that were supportive towards better learning and innovation within a company. Organisational cultures require strong and unwavering leadership (denoted in Category 1 of the TQA). It is important to point out that, during the discussions, the ability to utilise different sources of knowledge and technology also strongly reflected the commitment of top management.

2

From their observations, OL routines and OL activities were related as expected. The routines would result in better organised activities to help sustain organisational learning. Extensive OL routines would also support the ability that an organisation could use different sources of technology for knowledge creation.

3

Based on their experiences in dealing with the TQA applications (as they had been part of their respective company’s TQA team); OL routines, IP practices, KM practices, and sources of knowledge and technology supported and sustained learning within an organisation. These items could be clustered as KM (symbolised by Category 4 in the TQA). Subsequently, KM would contribute to organisational learning. This term more or less represents the workforce focus (or Category 5 in the TQA). Then, this learning would lead to innovativeness within an organisation.

4

They agreed that this premise would be considered as a general and simplified baseline towards organisational innovation. This baseline could be helpful for future organisations that planned to apply the TQA. The reason was that future projects, tasks, policies and performance measurement would be better synchronised and integrated. The clarity on the interrelationships among KM, learning and innovation could be used during the planning process as well as the tasks on monitoring and evaluation (see Figure 4).

Figure 4

Overall interrelationships among KM, organisational learning and innovation

KM

Organisational learning

Organisational culture

Innovation

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The comparisons of the simplified framework with other similar studies were conducted. The findings were generally consistent with many past literatures. Kogut and Zander (1992) stressed the importance of knowledge to the continuous innovativeness. Lee et al. (2008) underlined the impacts of organisational cultures on KM and learning. Melton et al. (2006) highlighted the strong contributions to a company’s innovativeness from KM activities and the ability to learn. Liebowitz et al. (2007) focused on the importance of knowledge sharing and transfer as a foundation for a learning organisation. Steiner (2008) emphasised the need to be inclusive and to involve key stakeholders as an important step for learning within an organisation. As a result, the perceptions expressed by survey participants appeared to be logical and could be further adapted by other companies. The three CQOs admitted that when they undertook the assignments, projects and tasks relating to the TQA, they encountered many difficulties. They included: 1

a lack of integrated planning among KM-related projects, the efforts on achieving a learning organisation and the development of new products and services for customers

2

a lack of an integrative performance measurement that could link KM, organisational learning and product and process innovation

3

a lack of a general view on KM, organisational learning and innovation.

The findings from the study helped bring about a holistic framework so that integrated efforts can be made for the TQA planning and application. They further suggested that the above three difficulties should represent the next steps or areas extended from this study. In addition, they strongly urge to expand the next study into two groups: 1

manufacturers

2

service providers.

Probably, the international comparisons and benchmarking could also be helpful. Lastly, it is important to recognise a few limitations in this research. The small sample size likely influences the closeness of the mean and the standard deviation values as shown in Table 3. This research is also based on the assumption that the companies that have completed the TQA application should have good practices in KM and OL and high performance in innovation. On the other hand, there are probably many companies that have not applied for the TQA but can be considered as an excellent case for learning, innovation and KM.

7

Conclusions

The study focuses on gaining better understanding on the interrelationships among KM, organisational learning and innovation within a company. Based on the survey results; OL routines, IP practices and KM practices are strongly correlated and are perceived to be an influential factor for innovation. Furthermore, OL routines are significantly interrelated to the sources of knowledge and technology, OL activities and innovation activities. The follow-up discussions with three CQOs from the companies that has won


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the TQA or has been recognised for Thailand Quality Class further simplified the survey findings. The simplified interrelationships highlight the mutual effects between: 1

KM and organisational learning

2

organisational learning and innovation.

These mutual effects were supported by organisational culture. This simplified description should be helpful for the firms planning to apply the TQA in the future.

Acknowledgements The authors would like to thank Mr. Naroon Sooksmarn and Miss Nuntaporn Kaewchimpre from Department of Industrial Work under Ministry of Industry in Thailand. Special appreciation and thanks to Dr. Miha Škerlavaj from University of Ljubljana, Slovenia for valuable inputs.

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Notes 1 2 3 4 5 6

7

See the 10th National Economic and Social Development Plan, available at http://www.nesdb.go.th/research/research_1544220909.pdf (accessed on 10 August 2009). Available at http://www.tqa.or.th/th/tqa-history (accessed on 15 August 2009). Available at http://www.tqa.or.th/th/node/242 (accessed on 11 August 2009). Available at http://www.tqa.or.th/th/node/241 (accessed on 18 August 2009). See http://www.tisi.go.th/syscer/9000.html for more details that are based on industrial types. According to the 2006–2010 Master Plan for Thai Automotive Industry Report developed jointly by Thailand Automotive Institute, Thai Auto-Parts Manufacturer Association and the Federation of Thai Industries for Office of Industrial Economics, Ministry of Industry. Available at http://www.oecdbookshop.org/oecd (accessed on 22 August 2009).

Appendix A Demonstration of the survey The survey consists of various contents and can be briefly described as follows. •

Item A: IP practices This item deals with the practices that a company uses to secure innovation such as patents/copyrights, trademarks, confidentiality agreements and trade secrecy not covered by legal agreements in order to gain better product design complexity and lead time advantage over competitors.

•

Item B: KM practices This item deals specifically with KM practices in a company. It contains a database on excellent practices, training programs, informal and formal work teams that promote worker communication and interaction and an integration of activities, which promotes interaction among employees from different areas.

•

Item C: Sources of knowledge and technology This item deals with the sources that can be used by a company to strengthen KM and the applications of information and communication technology. These sources include internal R&D, other enterprises within the company’s group, competitors, customers, supplier of equipments/services/laboratories/consultant, universities/public research institutes/private and non-profit research institutes, patent disclosures, professional conference/meetings/exhibitions/professional associations/trade unions/public regulations and informal contacts or networks.

160 •

R. Kanchana et al. Item D: Organisational learning or OL activities This item deals with specific activities designed to strengthen organisational learning. These activities include congenital learning, experiential learning and learning from external resources (i.e., vicarious learning, grafting and information searching). In addition, this item addresses how information and knowledge are distributed throughout an organisation – a process by which knowledge is shared that often lead to better understanding through staffs’ willingness and use of technology.

•

Item E: OL routine This item deals with an organisation’s routine on learning. These routine or day-to-day activities include real-time information made available to staffs, meetings, suggestion boxes, newsletters and operating manuals.

•

Item G: Innovation activities This item deals with the innovation activities being performed within a company. These activities include in-house R&D, acquisition of other external knowledge and technology, venture capital, working closely with suppliers and customers and training.

•

Item I: Motivating factors that drive organisational innovation This item deals with the important factors driving organisational innovation. The first factor involves competitions and market demands, e.g., developing new products and replaced products, increasing product varieties, entering new markets and increasing the market share. The second factor involves operational management on production and product delivery, e.g., improving quality of goods/services, exceeding industrial standards/requirements, reducing material/design/energy costs and reducing production lead time and inventory. The third factor involves workplace and quality of work life, e.g., improving working conditions, increasing healthy workplace and meeting regulatory standards. The fourth factor stems from regulatory pressures and public demands, e.g., environment, consumer protection and social responsibility. Eventually, there are two smaller subjects in this item: I.1 motivating factor for product innovation I.2 motivating factors for process innovation.

•

Item J: Perceived obstacles to innovation This item deals with the inhibiting factors that hinder organisational innovation. Such factors include cost (e.g., lack of funds and excessive risk), market (e.g., potential markets being dominated by established enterprises and lack of market demands for new products) and institution (e.g., ineffective protection of IP and lack of tax incentives).

Further illustrations of the details within each item can be partially demonstrated as follows.

Interrelationships among knowledge management Item A

161

IP practices Frequency

IP practices 1

Patents/copyrights

2

Trademarks

3

Confidentiality agreements and trade secrecy not covered by legal agreements

4

Complexity of product design

5

Lead time advantage over competitors

Item C

N

How often are these practices observed?

N

1

2

3

4

5

6

7

Sources of knowledge and technology Frequency

Sources of knowledge and technology 1

Internal R&D

2

Other enterprise within the enterprise group

3

Competitors

4

Customers/other enterprises in the industry

5

Supplier of equipments/services/ laboratories/consultant

6

Universities or higher education/government/public research institutes/private non-profit research institutes

7

Patent disclosures

8

Professional conference/meetings/exhibitions/ professional bodies/associations/trade unions/public regulations

9

Informal contacts or networks

N

How often are these practices observed?

N

1

2

3

4

5

6

7

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Appendix B Demonstration of scattering plots Figure B1

Scattering plot between OL routines and source of knowledge and technology

Figure B2

Scattering plot between OL routines and OL activities