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Towards successful knowledge

management: people development


approach
Abbas Monavvarian and Zahra Khamda

Abbas Monavvarian and 1. Introduction


Zahra Khamda,
Presently, increasing changes in human resource structures and workforce demands, in the
post-graduate student, are
both based in the light of new trends in knowledge processes and learning concepts, suggests that the human
Management Faculty, resource management function must play a critical role in creating, applying, sharing and
University of Tehran, Iran. preserving the organizational knowledge required to ensure a competitive position. There
has been a growing interest in viewing organizations as places of knowledge creation
(Nonaka, 1994). Organizational knowledge is created by a continuous dialogue between
employees (Bradley et al., 2005). It is evident that in the new economy, knowledge assets are
grounded in the experience and expertise of those individuals working in a company and
firm has to therefore provide the right structures to shape knowledge into competencies
(Smedlund, 2008). Knowledge could be broadly grouped into explicit knowledge and tacit
knowledge (Nonaka, 1991). Bradley et al. (2005), convey the ideas of researchers that tacit
knowledge exists in the mind and governs the use of explicit knowledge. If not captured,
tacit knowledge may be lost during employee turnover as it is personal and context
dependent (Bradley et al., 2005). Even though human resource practices are important, they
have little potential for being a source of sustained competitive advantage (Wright et al.,
1994), if not linked to tacit knowledge (Jayne, 2006).
This paper examines the role people development strategies play in implementing and
maintaining knowledge management, and what the organization should do to ensure the
development of its knowledge workers. The issue to be analyzed in this article is the
following one: How can people development procedures be instrumental in the successful
management of knowledge? The fundamental belief behind the question is that there are two
critical capabilities in every organization, people and knowledge, and they represent a vast
potential for gaining sustainable competitive advantage. Effective people development
efforts enable the organization to increase the depth and efficiency of mutual knowledge
exchange, which can be considered as an asset creating process. Thus our aim is to
determine how an effective people developing management can affect knowledge
management process in the organizations. In this study, we examined the effects of people
development management (PDM) on the knowledge management (KM) efforts in the
healthcare industry. We also explored the one to one relations between all dimensions of the
PDM and the KM.
We address the question of whether people development efforts affect knowledge
management cycle in a healthcare organization where expert knowledge is deemed as
obligatory requirement for survival.
Following this purpose we applied people developer standards (PDS) model Institute for
Productivity and Human Resource Development (IPHRD), 2004) for PDM and investigated
PDM effects on knowledge creation, sharing, application and preservation. Specifically,
eight elements of PDM enhances organization capacity to implement KM. Hence, section 2
will briefly review literature on PDM, PDS, and KM cycle, and introduces an hypothesized

PAGE 20 j BUSINESS STRATEGY SERIES j VOL. 11 NO. 1 2010, pp. 20-42, Q Emerald Group Publishing Limited, ISSN 1751-5637 DOI 10.1108/17515631011013096
model. In section 3, the methodology, including a description of the research instrument will
be discussed, while section 4 presents the analytical results. And finally, the last section
presents conclusion of major findings and possible implications for future research.

2. Literature review
2.1 People development management
The global competitive environment requires an element that holds much more value than
technology, natural resources and even money; and that is ‘‘knowledge’’. Burk says
‘‘knowledge management is 80 percent people and 20 percent technology’’ (Tuzuner and
Berber, 2001). As the number of knowledge workers increases in the workforce, human
resource management must play a critical role in creating and engaging the critical
knowledge. Drucker (2003) maintains that knowledge workers are unlike previous
generations of workers, not only in the high levels of education they have obtained, but
because in knowledge-based organizations, they own the organization’s means of
production, i.e. knowledge. Drucker (2003) believes that performance of knowledge
based industries depends on organizations attracting, holding, and motivating knowledge
workers (Jayne, 2006).
On the other hand, modern organizations being faced with continuous change should
develop their management competency, specifically effective knowledge management. The
goal is impossible to meet just through developing individual abilities to find, create, transfer,
share, apply, and save the organizational knowledge, or developing the ‘‘human recourse
knowledge management’’. This means in new organization the old knowledge-base of
human resources is inadequate, and the results of the old studies and research are too
deficient in respond to the current environment, so knowledge-based human resource
management processes should be established.
The acquisition of new human resources competency may be costly and limited by skill
shortage- the lack of desired competencies in the job market may be responsible. Learning
processes, therefore, involves gathering momentum as a tool to increase and create
corporate knowledge and, through that, a learning organization. That is why training is
becoming more important with organizations needing to constantly upgrade their workers’
skills, and training is considered a part of a company’s knowledge. The key for success is to
bring together training and knowledge management processes in order to build a learning
organization that preserves, shares, and efficiently organize training (Crocetti, 2002).
For human resource practices to be the basis for sustained competitive advantage, they
must be valuable, rare, inimitable, and non-substitutable (Barney, 1991). Tacit knowledge
meets these conditions:
B it is difficult to imitate;
B it is rare;
B it possesses value if a firm can codify it into improved competencies, capabilities,
processes, and products; and
B it is difficult to find substitutes for the ‘‘know-how’’ that flow out of individual’s tacit
knowledge (Grant, 1996).
Therefore, the source of the sustained competitive advantage does not come from the
human resource practices but from the tacit knowledge (Jayne, 2006).
Furthermore, Muscatello (2003) implies the idea of Grant (1991) that for knowledge
management to become a competitive advantage, its value must be associated with
durability (the rate at which it becomes obsolete), transparency (the speed with which other
firms can develop the same knowledge), transferability (how easily firms can transfer and
share it) and replicability (how easily firms can reproduce and use it) (Muscatello, 2003).
Jayne (2006) has taken Wright et al.’s (1994) model one step further by addressing
knowledge and the knowledge creation process into the strategy-competitive advantage

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link. She proposes that human resource practices moderate the relationship between tacit
knowledge and sustained competitive advantage by affecting human resource behaviors
(Jayne, 2006).
A successful example is Jackson et al. (2003) model of ‘‘behavioral approach’’. In this model
(as shown in Figure 1) HRM functions are the main factor to motivate and conduct the ‘‘staff
behavior’’, that is itself one important element of organization efficacy. These issues, as the
most important factors in successful execution of the four human resource management
(HRM) duties, are in accordance with the effective people knowledge management. In this
system the basis of KM is people tacit and explicit knowledge and the exchanging cycle of
them to create, share, apply, and make it up to date; to finally meet the organization goals
(Jackson et al., 2003)
Hong and Kuo (1999) believe that HRM should take action to create a learning organization
by establishing challenging work, changing perception and assessment patterns.
Establishing challenging work includes job enrichment, job enlargement and job rotation
(pushing forces in KM). Besides, changing perception and assessment patterns includes
changing existing perception patterns, requiring knowledge concepts through training,
sharing, and individual studying (pulling forces in KM). Hong and Kuo (1999) conveys every
three pushing forces have different emphasis on learning methods due to their content.
Indeed Afrazeh (2005) emphasized that ‘‘behavioral competency’’ appears through
appropriate linkage among three elements of knowledge, motivation, and structure.
Additionally, intentions, skills and abilities are still important to implement the KM (Afrazeh,
2005).
The innovative behaviors of today’s organizations are strongly influenced by the
competencies of their employees (Tidd et al., 1997) and the ways they use their skills and
expertise to achieve superior performance in using the knowledge. Since knowledge is the
crucial element for superior competitive activities, organizations became places where
knowledge is referred to as ‘‘a way of behaving’’, indeed, ‘‘a way of being’’, in which every
individual is a knowledge worker (Nonaka, 1991). Peter Senge (1990) believes that
organization is the place where people continually expand their capacity to create the results
they truly desire (Senge, 1990). Lim and Klobas (2000) believe that having strong human
resources policies in an organization will affect how the organization manages its knowledge
(Monavvarian and Kasaei, 2007).

Figure 1 HRM process model

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Trained people with well planned careers, effectively appraised performance, rewarded in
contingency plans will be the outstanding assets in a knowledge-based organization.
Tuzuner and Berber (2001) claim that knowledge is the distinctive competence through the
human resources of an organization and are convinced that the human resources
department in such organizations should be facilitated in order to implement effective and
efficient practices through knowledge management (Tuzuner and Berber, 2001).
Zaharias et al. (2001) argue that knowledge gained by employees through learning or
training will enable them to translate their knowledge into organizations’ routine,
competencies, job descriptions and business processes, plans, strategies and cultures.
Employees should be given constant training to improve their knowledge and
capabilities. According to Smith (2001) employees with a lack of adequate training, or
explicit knowledge, struggle to keep up. Therefore it is important for the organization to
have a proper training program to enable employees gain knowledge and contribute to
the creation and transfer of knowledge in the organization (Monavvarian and Kasaei,
2007).
Brandon-hall (2001) provided some specific reasons for integrating knowledge
management and learning management:
B both learning management and knowledge management share a similar focus: how to
enhance human knowledge and its use within organizations;
B there is growing realization that knowledge in an organization is distributed among its
people’s minds and a variety of ‘‘knowledge artifacts’’ (human capital and structural
capital); and
B knowledge management initiatives are not as easy or as successful as anticipated
This tendency towards more alignment is certainly going to extend to other knowledge
and people-intensive disciplines such as human resources management, business
intelligence, communications, and document management and so on (Brandon-hall,
2001).
Muscatello (2003) states that organizations are constantly looking for new innovative ways to
increase their competitive advantage. To find these areas of advantage we need to examine
what successful organizations are doing in today’s world. These organizations are the high
performers. High performance organizations have several key elements that enable them to
grow. Bullinger (1999) identified key elements: core competence, networks and
cooperation, process orientation, free margins, learning organizational structures, and
knowledge management and information technology. In this regard the capacity of learning
is becoming a core capacity in innovative, growth-oriented companies. Learning is
necessary in order to improve oneself, to grow more productive and to gain the ability to
adapt oneself to changes – in order to surpass the competition. Indeed knowledge and
information are a basis for creativity and the capacity to learn. Management of knowledge
does not only take place in the company, but is also accomplished in a comprehensive way
(Muscatello, 2003).
In brief, we believe that human resources are the biggest asset, which lead us to undertake a
series of human resource management development. This is a vital requirement to
encourage employees to participate in systematic learning, by sharing their experiences
with different people from different business fields. The ideas about knowledge-based HRM
lead us to think that the key goal of HRM is optimizing the continuous development of the
entirety of an organization’s knowledge individuals and their ability to create value. As such,
the key process would be developing and managing individuals, competencies and
communities.

2.2 Knowledge management


There are some definitions of ‘‘knowledge management’’: Karkoulian et al. (2008) believe KM
is an approach to build the learning organization where members can acquire, share, create

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knowledge or apply it in their decision-making activities. Almost all literature has discussed
and focused on three main principles in the KM process namely:
1. knowledge sharing;
2. knowledge preserving; and
3. knowledge utilization (Karkoulian et al., 2008).
King et al. (2002) know KM as a creating, organizing, distributing and ensuring process to
understand the information needed to do a task. Stamps (1999) emphasize that KM is
knowledge acquiring when and where a person may need it, and how to access it
(Hasanzadeh, 2001, pp. 50-1). Malhoreta (1998) believes KM helps organizations to find
new ways of using individual tacit and explicit knowledge. It has been stated that KM is
collecting knowledge, rational capabilities and experiences of organization people, and
ability to retrieval them as the organization assets. Afrazeh (2005) summarize the concepts
in his comprehensive definition: KM is the process of exploring, providing, creating and
expanding, sharing, saving, evaluating, and applying the right knowledge by the right
person in appropriate time, that could be realized through combination among human
resources, information technology, and communication; and by implementing appropriate
structure to meet the organization goals (Afrazeh, 2005, p. 36).
In addition, organizational knowledge consists of two broad categories:
1. knowledge that is explicit codified knowledge; and
2. knowledge that is not codified but exists primarily within the minds of employees, tacit
knowledge (Nonaka et al., 1996).
Droege and Hoobler (2003) show the distinction between organizational explicit and tacit
knowledge, that is the difference between ‘‘know-what’’ and ‘‘know-how’’ in which
organizational ‘‘know-how’’ puts ‘‘know-what’’ into action. Spender (1996) reports since
explicit knowledge originates as tacit Knowledge, the potential for creating new explicit
knowledge is at risk. New knowledge is created through the ongoing interaction between
tacit knowledge of the individual and the explicit contextual knowledge possessed by the
organization (Jayne, 2006). Research suggests that more than half of the knowledge that
exists in firms is largely of a tacit nature (Ratten and Suseno, 2006). Bradley et al. (2005)
conveys the Spiegler (2000) statement as many believe that explicit knowledge without the
concomitant tacit knowledge is incomplete and will result in a suboptimal solution when used
in a problem-solving task. The high value of tacit knowledge motivates the organization to
attempt to capture it (Bradley et al., 2005).
In Gunnlaugsdottir (2003) model of forming organization knowledge (as illustrated in
Figure 2), the cycle of tacit conversion to explicit knowledge appears to be the core of
knowledge formation which is closely related to KM.
Nonaka et al. (1996) defined the knowledge creation process as a ‘‘never-ending spiral of
tacit and explicit knowledge through four modes of knowledge conversion’’: socialization,
externalization, combination, and internalization. The firm cannot create new knowledge
without the individual and so the firm needs to implement human resource practices that
support creating knowledge. In these spiral processes, the socialization within the firm plays
a critical role in creating new tacit knowledge that can lead to creating a competitive
advantage (Jayne, 2006).
Another classification is based on individual knowledge and organizational knowledge.
Individual knowledge is knowledge that resides in an individual mind while organizational
knowledge is knowledge that is formed through interactions between technologies,
techniques and people. The pattern and form of interactions depend on an organization’s
history and culture (Monavvarian and Kasaei, 2007). With this knowledge, people are
empowered to efficiently resolve problems, make decisions, respond to customer queries,
and create new products and services tailored to the needs of clients (Karkoulian et al.,
2008).

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Figure 2 Organization knowledge model

2.3 Knowledge management model


Reviewing all the definitions we find four basic dimensions of KM as Newman (1992) has
provided in his model: creation, sharing, applying and saving knowledge, as we use it in our
conceptual research model. Up to now more than 26 KM models (by two to eight phases)
have been presented (Afrazeh, 2005, p. 44-45). But we believe common basic phases are
summarized in the Newman model that is illustrated in Figure 3:
1. Knowledge creation. The knowledge comes primarily from the experiences and skills of
the employees. Knowledge is created as people determine new ways of doing things or
develop know-how (Monavvarian and Kasaei, 2007).
2. Knowledge sharing. The main element considered is specifically how information and
knowledge are shared among employees in the organization (Monavvarian and Kasaei,
2007).

Figure 3 Knowledge management cycle

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3. Knowledge application. Implementing both tacit and explicit knowledge inside and
outside the organization’s boundaries with the purpose of achieving corporate objectives
in the most efficient manner (Magnier-Watanabe and Senoo, 2008).
4. Knowledge saving. Codification of tacit and explicit knowledge helps in making the
knowledge understandable and which can be used later on. The knowledge that is
created needs to be stored in its raw form in a database. Most organizations use many
different types of knowledge repositories to capture the knowledge (Wang, 2002).

2.4 People Developer Standard (PDS)


The pace of change is accelerating in most areas of human endeavor. This is just not limited
to technology and tools, but also philosophical dimensions (Majidi, 2001, pp. 21-2).
Humanity has passed through two distinguished eras in scientific attitude and training:
peer-assist (direct) training period, and factory (mass production) training. Recent studies
have highlighted the deficiencies of previous practices and techniques. So what are the third
era characteristics?
Considering the changes in the paradigms of philosophical principles of human resource
growth and development, the concept of training and development has undergone
fundamental changes. Development models strongly emphasize management systems and
expanding people’s knowledge, and performance criteria (Tabatabaii, 2006).
People Developer Standard (PDS) model (as shown in Figure 4), which we use as part of the
conceptual research model helps us to trace people development management programs

Figure 4 People developer standard

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systematically. PDS recommends that organizations implement eight basic systems.
Figure 4 illustrates dimensions of PDS model (IPHRD, 2006). These systems are:
1. Learning needs analysis. The people developer organization ensures that people are well
trained to do their duties. Supervisors are responsible to identify personnel strengths and
learning needs to do the job effectively. This is a part of systematic analysis of learning
needs. This system diagnoses the necessary training needs and prevents training cost
and expenses.
2. Career development. The people developer organization deals with each person as a
talent. Everyone, as an active member, should have the opportunity for growth. So
individuals should provide a list of their needed skills and develop their potential abilities.
Providing opportunities to obtain skills and knowledge by job rotation, job enlargement
and also job missions are the main responsibilities of a people developer organization.
The main goal of people development is ensuring that individuals’ skills up to date.
3. Resource allocation. The people developer organization invests in its human resources.
The people value appears in total learning plan. Indeed the organization allocates the
budget, people, and facilities needed to ensure of learning performance.
4. Communication. The people developer organization ensures that learning plans are
communicate to all people clearly. Supervisors play a main role in this process. Besides,
they ensure that their staffs were awareness about what they should learn and the
objectives before learning.
5. Induction. The people developer organization has structured system to help new staff or
existing staff assigned to new jobs.
6. Monitoring. The people developer organization has total learning management. All the
records to feed the people participation back periodically. To ensure that learning transfer
occurs, people are given opportunities to apply obtained skills through the learning
program.
7. Evaluation. The people developer organization, measures the results of learning. So it
should implement a measurement system to follow up the learning activities and being
able to provide responses about units and the overall organization’s performance. Thus it
can exactly find out how learning activities affect performance.
8. Improvement. The people developer organization receives feedback of learning
programs by people to do corrective action to increase efficacy of people learning and
development procedures (Ghlichhee, 2007, p. 173-5).

2.5 Knowledge management in healthcare industry


The health care industry is increasingly becoming a knowledge-based community that
depends critically on knowledge management (KM) activities to improve the quality of care.
Utilizing knowledge management systems to manage medical information and health care
knowledge to support the full spectrum of knowledge needs in the nursing process has
become an important issue for nursing professionals. Recently, a growing interest in the
electronic health (e-health) concept is causing significant changes in the healthcare
environment (Lin and Umoh, 2002).
The success of e-health depends critically on the collection, analysis and seamless
exchange of clinical and medical information or knowledge within and across the above
organizational boundaries (Bose, 2003). Medical information and clinical knowledge
management issues are beginning to emerge.
Managing knowledge of medical professionals within health care organizations is critical to
prosper in competitive e-health environments (O’Dell and Grayson, 1998). Nursing is
knowledge intensive and the primary professional in health care organizations. They are
required to take new nursing knowledge and experience that can be acquired through
various net-enabled applications or internet (Hsia et al., 2006). Recent changes in policy and
culture require health workers to incorporate ‘‘knowledge work’’ as a routine component of

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professional practice. Innovative computer-mediated communication technologies provide
the opportunity to evaluate the nature of ‘‘knowledge work’’ within nursing and midwifery
(Brooks and Scott, 2005).
In knowledge management theory many workers within an organization simply act as
passive consumers of information that directs their actions. These are ‘‘information workers’
and the knowledge they consume is entirely explicit and clear. In contrast, ‘‘knowledge
workers’’ are those who are able to critically reflect upon the explicit knowledge of the
organization by adding personal, theoretical and tacit knowledge acquired from their own
experience. In nursing, effective knowledge work is therefore likely be dependent on the
combination of a situated, reflective and experiential or a tacit knowledge base gained
through clinical practice with scientific or intellectual knowledge (Antrobus, 1997; Titchen
and Ersser, 2001). The need for health information systems continues to grow (Dotan, 2003).
The reason why we choose the healthcare organization in our study is rooted in the important
role of human resources and also knowledge based processes in this industry, willing to
achieve a practical guide to improve organizational knowledge and develop knowledge
workers through learning goals, processes and skills.

2.6 Hypothesized model


To proceed to hypothesized model, we review the beliefs about knowledge and
knowledge workers given that it is difficult to manage knowledge workers through
traditional principles and methods. As people are growing to be knowledge workers,
organizations should implement HRM procedures to keep their tacit knowledge safe and
make it competitive. Concentrating on HRM and learning in particular, the organization
creates a knowledge-based learning economy. The modern organizations should place
their priority on human resource development.
Our conceptual model of research has two dimensions. On one side we chose Newman
(1992) model of knowledge management, as it provides the least common elements of KM
among the other patterns, including knowledge creation, sharing, applying and saving. On
the other side we consider a comprehensive pattern of people development management,
named People Developer Standard, provided by the Institute for Productivity and Human
Resource Development (IPHRD) in 2004. Through this model, an appropriate framework to
manage and develop the human assets and a series of developer activities will be formed to
achieve people excellence. Figure 5 illustrates the hypothesized model.
Therefore our main hypothesis is presented as follows which will be discussed in the context
of the eight mentioned dimensions of PDS.

2.7 Hypothesis
There is a positive relationship between People Development management and Knowledge
Management.
Hence we developed our other hypotheses as:
H1. There is a positive relationship between Learning Needs Analysis and Induction
Dimension of People Development Management and Knowledge Management.
H2. There is a positive relationship between Career Development and Communication
Dimension of People Development Management and Knowledge Management.
H3. There is a positive relationship between Resource Allocation Dimension of People
Development Management and Knowledge Management.
H4. There is a positive relationship between Monitoring Dimension of People
Development Management and Knowledge Management.
H5. There is a positive relationship between Evaluation and Improvement Dimension of
People Development Management and Knowledge Management.

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Figure 5 Hypothesized model

3. Research methodology
3.1 Development of instruments
The subjects were 365 clinical staff and headquarters at the Social Security Organization
(SSO) medical centers, Qazvin, Iran (includes two hospitals and seven clinical centers). A
questionnaire was prepared as the survey instrument of our study, comprising eight basic
PDS indicators and knowledge management in four indicators, having the same scale. The
questionnaire was developed on the base of 12 sub-constructs which were measured on a
five-point Likert scale, ranging from (5) ‘‘strongly high’’ to (1) ‘‘strongly low’’ Following the
calculation of the descriptive measures for the variables, a correlation analysis was
performed in order to determine the efficiency of the independent variables over the
dependent variable. Focusing on the knowledge management process as the dependent
variable of our study, dimensions of the functions of the PDS, have taken into consideration
as the independent variables. Thereafter the casual relationship and fitness of the model
was investigated through Lisrel 8.5 software.
3.1.1 Content validity. To ensure about how representative and comprehensive the items
were in creating the scale, the survey instrument was assessed by examining the process.
Our questionnaire consisted of 49 items to assess 12 sub-constructs of the proposed model.
These items were adapted from previously validated instruments to fit PDM and KM context.
PDM indicators were adopted from IPHRD’s (2004) PDS well known model, and for KM
indicators, we employed the questionnaire tested in Labor Ministry of Iran (Monavvarian and
Kasaei, 2007). The Constructs and relevant indicator are displayed in Table I. Then we asked
some experts to critiques the questionnaire and the feedback provided led to minor wording
changes in some of the items.
3.1.2 Construct validity. To determine the extent to which the scale has measured a variable
of interest, a principal components factor analysis of perceived PDM and KM was performed
with varimax rotation. Well performed analyzing of both PDM and KM, we have done the
factor analysis for both two dimensions separately. Results have shown in Tables II to VII.
Table II implies four factors for KM, adopted with our conceptual model. Table III implies five
factors for PDM (instead of eight factors as were expected). In other words each pare
components of ‘‘learning needs analysis and induction’’, ‘‘Career Development and

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Table I Operational model
Sub-construct Indicator

Construct: knowledge management


Knowledge creation Identifying the needed knowledge, exploring
knowledge gaps, and the way to capture it,
encouraging the transformation personal and
tacit knowledge to a collective and explicit one,
knowledge creation deemed valuable
Knowledge sharing Tendency to share knowledge by people,
simultaneously sharing knowledge, encouraging
the culture of sharing knowledge
Knowledge application Using knowledge toward the goals, ensure the
efficiency of exciting knowledge, running the
facilitating systems to apply knowledge
Knowledge saving Selecting, saving and updating knowledge

Construct: people development management


Learning needs analysis Strategic learning direction, structured staff
learning needs, learning needs in line with
business objectives, the role of immediate
supervisors in identifying needs, and managers
in reviewing it, total learning plan, variety of
people development activities, endorsing the
plan by senior managers and CEO
Career development Career development plan, discussing the plan by
immediate supervisors, reviewing the plan by
managers, and endorsing the plan by CEO
Resource allocation Budget, learning hours, people, a senior
manager responsible for development activities,
allocate the time to participating in development
activities by managers and CEO
Communication To communicate learning direction, structured
career plan, learning objectives and post-course
performance targets to staff
Induction To conduct structured induction for new staffs,
and existing staff given new job functions
Monitoring Utilization of learning places, acknowledgement
of participation and post-course-review
Evaluation Structured review of effectiveness periodically in
the total learning plan by managers, and CEO
Improvement By use of feedback, achieving results and
encouraging innovation

Communication’’, and also ‘‘evaluation and improvement’’ in PDM construct were reduced in
the three integrated factors. Tables IV to VII depicts the factor analysis results in both
constructs.
3.1.3 Internal consistency reliability. To measure the extent to which items of the test were
positively intercorrelated, we piloted the questionnaire on a sample of 28 staff memberss.
The scale reliabilities for this sample measured by Cronbach’s coefficient via SPSS 15 and
displayed in Table VIII. It demonstrates a high degree of reliability based on the Cronbach
Alpha coefficient.

3.2. Sample and data collection


Computing the sufficient size of sample through some statistical techniques, we selected a
sample of 177 employees. The 195 questionnaires were distributed with an overall response
rate of 100 percent, which means 195 employees returned the questionnaires. Participants
were informed of the main objective of the study, and also were presented with a written
definition of keywords to build shared concept. They were encouraged to sincerely respond
to all the questions and were assured of absolute anonymity and confidentiality.

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Table II Total variance explained (KM)
Initial eigenvalues Extraction sums of squared loadings Rotation sums of squared loadings
Component Total % of variance Cumulative % Total % of variance Cumulative % Total % of variance Cumulative %

1 6.265 36.854 36.854 6.265 36.854 36.854 3.126a 18.388 18.388


2 1.411 8.301 45.155 1.411 8.301 45.155 2.466a 14.504 32.893
3 1.122 6.601 51.755 1.122 6.601 51.755 2.387a 14.038 46.931
4 1.010 5.940 57.695 1.010 5.940 57.695 1.830a 10.764 57.695a
5 0.842 4.951 62.646
6 0.784 4.611 67.257
7 0.724 4.262 71.519
8 0.675 3.971 75.490
9 0.600 3.532 79.022
10 0.577 3.394 82.417
11 0.565 3.324 85.740
12 0.533 3.135 88.875
13 0.498 2.927 91.802
14 0.439 2.584 94.386
15 0.388 2.284 96.670
16 0.304 1.789 98.459
17 0.262 1.541 100.000

Notes: a Four factors, variance ¼ 57:695; Extraction method: Principal component analysis

Table III Total variance explained (PDM)


Initial eigenvalues Extraction sums of squared loadings Rotation sums of squared loadings
% of % of % of
Component Total variance Cumulative % Total variance Cumulative % Total variance Cumulative %

1 13.271 42.809 42.809 13.271 42.809 42.809 4.223 13.623 13.623


2 1.762 5.685 48.493 1.762 5.685 48.493 4.121 13.293 26.916
3 1.493 4.816 53.309 1.493 4.816 53.309 3.846 12.405 39.321
4 1.370 4.420 57.729 1.370 4.420 57.729 3.835 12.371 51.692
5 1.162 3.749 61.478 1.162 3.749 61.478 3.033 9.785 61.478a
6 0.993 3.202 64.680
7 0.924 2.979 67.659
8 0.903 2.914 70.573
9 0.846 2.729 73.302
10 0.770 2.482 75.784
11 0.670 2.163 77.947
12 0.630 2.032 79.979
13 0.572 1.847 81.826
14 0.559 1.803 83.629
15 0.486 1.567 85.195
16 0.450 1.451 86.647
17 0.404 1.302 87.949
18 0.393 1.267 89.216
19 0.375 1.210 90.426
20 0.361 1.165 91.590
21 0.353 1.139 92.729
22 0.316 1.021 93.750
23 0.290 0.934 94.684
24 0.279 0.899 95.583
25 0.258 0.832 96.414
26 0.225 0.726 97.141
27 0.215 0.693 97.834
28 0.194 0.627 98.461
29 0.182 0.588 99.049
30 0.181 0.585 99.634
31 0.113 0.366 100.00

Notes: a Reduced to five factors, variance ¼ 61:478; Extraction method: Principal component analysis

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Table IV Factor analysis: KMO and Bartlett’s test (KM)
Kaiser-Meyer-Olkin measure of sampling adequacy 0.894
Bartlett’s test of sphericity Approx. Chi-Square 1,140.616
df 136
Sig. 0.000

Table V Factor analysis: rotated component matrix (KM)


Component
No. Saving Application Sharing Creation

1. 0.003 0.060 0.226 0.749


2. 0.241 0.536 0.219 0.394
3. 0.398 0.538 0.147 20.105
5. 0.179 0.306 0.327 0.551
6. 0.168 0.071 0.642 0.333
7. 0.207 0.163 0.678 0.134
8. 0.215 0.179 0.747 0.170
9. 0.013 0.532 0.560 20.031
10. 0.201 0.599 0.342 0.094
11. 0.139 0.754 0.086 0.209
12. 0.229 0.540 0.052 0.384
13. 0.646 0.310 -0.025 0.149
14. 0.707 0.152 0.321 0.156
15. 0.751 0.096 0.360 0.030
16. 0.696 0.124 0.226 20.063
17. 0.595 0.205 0.013 0.357
18. 0.575 0.198 0.060 0.511

Notes: Extraction method: Principal component analysis; Rotation method: Varimax with Kaiser
normalization; a rotation converged in seven iterations

Table VI Factor analysis: KMO and Bartlett’s test (PDM)


Kaiser-Meyer-Olkin measure of sampling adequacy. 0.920
Bartlett’s test of sphericity Approx. Chi-Square 3,707.928
df 465
Sig. 0.000

4. Analysis and results


4.1 Demographics and descriptive statistics
Table IX illustrates the distribution of demographic statistics of respondents.

4.2 Data analysis


4.2.1 Mean test. Table X depicts that all variables have mean values under 3, which is the
median value of the scale. We can find that on the base of respondents’ opinion the
performance is under the acceptable amount.
4.2.2 Correlation. To investigate correlation between PDM and its dimensions, and KM we
applied Pearson Correlation. As Table XI shows PDM and KM indicate some reasonably
strong relationship in between, with a correlation coefficient of 0.757, and also PDM
dimensions show a strong positive correlation with KM.
4.2.3 Structural Equation Model (SEM). Applying the structural equation model (SEM)
approach, we used a variety of indices to evaluate model fitness. The seven fit indices used
and values indicating acceptable model fit include:
B the ratio of the x 2 statistic to its degrees of freedom, with values of less than 3 indicating
acceptable fit;

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Table VII Factor analysis: Rotated Component Matrix (PDM)
Component
Evaluation and Career development Learning needs analysis Resource
No. Monitor improvement and communication and induction allocation

19. 0.128 0.285 0.587 0.396 20.041


20. 0.251 0.029 0.223 0.668 0.209
21. 0.237 20.006 0.095 0.635 0.223
22. 0.344 0.135 0.341 0.645 0.031
23. 0.453 0.344 0.324 0.390 0.090
24. 0.305 0.308 0.704 0.162 0.013
25. 0.219 0.189 0.494 0.386 0.308
26. 0.183 0.200 0.658 0.381 0.046
27. 0.265 0.068 0.304 0.019 0.575
28. 0.204 0.215 0.447 0.248 0.459
29. 0.120 0.156 0.611 0.128 0.366
30. 0.185 0.283 0.651 0.020 0.418
31. 0.467 0.092 0.469 0.033 0.349
32. 0.381 0.084 20.018 0.260 0.576
33. 0.670 0.121 0.192 0.278 0.160
34. 0.759 0.092 0.226 0.232 0.179
35. 0.622 0.212 0.255 0.070 0.295
36. 0.550 0.255 0.152 0.163 0.341
37. 0.662 0.160 0.113 0.267 0.224
38. 0.529 0.442 0.082 0.474 0.006
39. 0.210 0.384 0.087 0.630 0.117
40. 0.185 0.237 0.280 0.404 0.467
41. 20.019 0.501 0.260 0.610 0.211
42. 0.177 0.672 0.326 0.096 0.068
43. 0.058 0.539 0.017 0.386 0.457
44. 0.260 0.577 0.094 0.221 0.472
45. 0.365 0.255 0.150 0.238 0.510
46. 0.359 0.448 0.231 0.293 0.313
47. 0.054 0.600 0.224 0.209 0.354
48. 0.125 0.749 0.353 0.027 0.143
49. 0.415 0.700 0.157 0.089 20.025

Notes: Extraction method: Principal component analysis; Rotation method: Varimax with Kaiser normalization; a rotation converged in
nine iterations

Table VIII Internal reliability


Instrument No. of questions (items) Cronbach’s a

People developer management 31 0.973


Knowledge management 18 0.875
Total 49 0.972

B root mean squared error of approximation (RMSEA), with values below 0.08 representing
acceptable fit;
B standardized root mean squared residual (SRMR), with values less than 0.05 indicating a
good fit;
B goodness of fit index (GFI), with values exceeding 0.9 indicating good fit;
B adjusted GFI (AGFI), with values exceeding 0.8 indicating acceptable fit; and
B normed fit index (NFI), with values of 0.9 or larger (Ngai et al., 2007).

We tested our proposed model in three steps:


1. PDM, its latent variables and indicators;
2. KM, its latent variables and indicators; and
3. the effect of PDM on KM.

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VOL. 11 NO. 1 2010 BUSINESS STRATEGY SERIES PAGE 33
Table IX Descriptive statistics of respondents
Item Frequency %

Gender
Male 66 34
Female 127 65.5

Age
22-28 44 22.6
29-35 95 48.7
36-45 51 26.2
.¼ 46 2 1

Work experience (year)


,¼ 5 40 20.5
5-10 83 42.6
10-20 66 33.8
.¼ 21 2 1

Education
Diploma and technician 73 37.4
Bachelor 121 62.1

Job role
Staff 169 86.7
Headquarters 23 11.8

Table X Population mean test (H0: m ¼ 3Þ


Test Descriptives
Mean
Strongly low
95% confidence Low
Interval of the Average
Difference High
Mean Sig. Strongly
Dimensions Upper Lower difference two-tailed df T-test SD high Result

Learning needs analysis


and induction 20.1557 20.3806 20.26813 0.000 194 24.702 0.79626 2.7319 Unacceptable
Career development and
communication 20.3971 20.6572 20.52718 0.000 194 27.996 0.92068 2.4728 Unacceptable
Resource allocation 20.3298 20.5967 20.46325 0.000 194 26.847 0.94474 2.5368 Unacceptable
Monitoring 20.2040 20.4593 20.33162 0.000 194 25.123 0.90388 2.6684 Unacceptable
Evaluation and
improvement 20.3144 20.5441 20.42923 0.000 194 27.373 0.81299 2.5708 Unacceptable
People develop
management 20.2972 20.5105 20.40388 0.000 194 27.470 0.75506 2.5961 Unacceptable
Knowledge creation 20.1978 20.4484 20.32308 0.000 194 25.086 0.88704 2.5961 Unacceptable
Knowledge sharing 20.3443 20.5890 20.46667 0.000 194 270.521 0.86646 2.5333 Unacceptable
Knowledge application 20.3699 20.5758 20.47282 0.000 194 29.058 0.72895 2.5272 Unacceptable
Knowledge saving 20.5844 20.8447 20.71453 0.000 194 210.830 0.92130 2.2855 Unacceptable
Knowledge management 20.3974 20.5912 20.49427 0.000 194 210.060 0.68608 2.5057 Unacceptable

Table XII shows the outcome of tests and the diagrams are displayed as in Figures 6-9:
4.2.3.1 X-model: model of people development management. We applied confirmatory
factor analysis for PDM components and its indicators in Lisrel 8.5 and eventually conducted
path diagram of X-model as is shown in Figure 6. We have tested relationship between PDM
latent variables and its indicators. Fitness indices in Table XII shows rather good fitness of
our X-model, proving selected indicator are good representative for each component of

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Table XI Correlations
KM and. . . n Sig. (two-tailed) Pearson correlation

PDM 195 0.000 0.757*


Learning needs analysis and induction 195 0.000 0.692*
Career development and communication 195 0.000 0.634*
Resource allocation 195 0.000 0.609*
Monitoring 195 0.000 0.658*
Evaluation and improvement 195 0.000 0.678*

Note: * Correlation is significant at the 0.01 level (two-tailed)

Table XII Model fitness indices


x 2/ RMSEA SRMR GFI AGFI NFI Model
Indices df ,3 ,0.08 ,0.05 .0.9 .0.8 $0.9 fitness

Hypothesis Relationship between PDM latent variables and 2.29 0.082 0.064 0.76 0.71 0.94 Acceptable
its indicators
Relationship between KM latent variables and its 1.81 0.065 0.091 0.88 0.84 0.92 Acceptable
indicators
Effect of PDM on KM (Total) 2.47 0.087 0.049 0.93 0.88 0.97 Strongly acceptable

PDM and also there is a positive relationship between PDM components. Moreover, Table XIII
reveals that there is a strong relationship between PDM components. Findings enlighten
highly noticeable relationship between ‘‘career development and communication’’, and
‘‘resource allocation’’ (correlation ¼ 0:92).
4.2.3.2 Y model: model of knowledge management. We adopted confirmatory factor
analysis for KM components and its indicators in Lisrel 8.5 and eventually conducted path
diagram of Y-model as per Figure 7. We have tested relationship between KM latent
variables and its indicators. Fitness indices in Table XII shows good fitness of Y-model,
proving selected indicator are good representative for each component of KM and also there
is a positive relationship between KM components. Furthermore, Figure 7 depicts highly
noticeable relationship between Knowledge Creation and Knowledge Application
(correlation ¼ 0:84) (see Table XIV).
4.2.3.3 Structural model; the effect of PDM on KM. Finally, we performed our structural model
applying five components of people development management and four components of
knowledge management. As shown in Figure 8, PDM can determine the direct meaningful
effect (0.85) on KM which is a significant role. The relation between the learning needs
analysis and induction, and KM is fairly more important than others.
Indeed, Figure 9 presents the second layer model of the research, including PDM indicators
role in related to KM dimension as a whole. On the other hand, viewing the T-value model we
could find that among the PDM components, just learning needs analysis and induction has
shown a significant amount of more than 1.96 (t parameter), so the other component being
under the rate had no significant effect. In other words, as Figure 9 shows, finding
emphasized that PDM effects on KM (0.85) run through ‘‘learning needs analysis and
induction’’ component.

4.3 Results
Our findings support the results that are summarized in Table XV. It shows that the mean
performance of the surveyed organization in all aspects of both PDM and KM is under the
acceptable mean. Although ‘‘Learn needs analysis and induction’’ with a mean of 2.73 is in
the highest level, it has still no foothold in the organization. Also, there is the lowest attention
to ‘‘Career Development and Communication’’ as shown by the mean of 2.47.

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VOL. 11 NO. 1 2010 BUSINESS STRATEGY SERIES PAGE 35
Figure 6 X-model; modified model of PDS

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Figure 7 Y-model; T-values model of KM

Figure 8 Standardized model; the effect of PDM on KM

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Figure 9 T-value model; the effect of PDM on KM (second layer)

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Table XIII Relations in PDM dimension
Relations between each two PDM components
Career development and communication and Resource allocation 0.92
Career development and communication and Learning needs analysis and induction 0.87
Learning needs analysis and induction and Monitor 0.87
Career development and communication and Evaluation and improvement 0.82
Monitor and Evaluation and improvement 0.82
Learning needs analysis and induction and Evaluation and improvement 0.81
Resource allocation and Evaluation and improvement 0.81
Learning needs analysis and induction and Resource allocation 0.80
Career development and communication and Monitor 0.78
Resource allocation and Monitor 0.75
Relations between PDM and its components
Learning needs analysis and induction 0.91
Career development and communication 0.91
Evaluation and improvement 0.90
Resource allocation 0.90
Monitor 0.89

Table XIV Relations in KM dimension


Relations between each two KM components
Knowledge creation and Knowledge application 0.84
Knowledge sharing and Knowledge application 0.74
Knowledge application and Knowledge saving 0.73
Knowledge creation and Knowledge sharing 0.72
Knowledge creation and Knowledge saving 0.69
Knowledge sharing and Knowledge saving 0.65
Relations between KM and its components
Knowledge application 0.76
Knowledge creation 0.74
Knowledge sharing 0.69
Knowledge saving 0.68

Table XV Research results


Relation test (99%
confident) Casual test
No. Hypothesis Mean test Validity Coefficient Validity Amount

Main PDS 2.59 Approved (þ) 0.757 Approved (þ ) 0.85


KM 2.50
1 Learn needs analysis and induction 2.73 Approved (þ) 0.692 Approved (þ ) 0.86
KM 2.50
2 Career development and communication 2.47 Approved (þ) 0.634 – (2) 0.81
KM 2.50
3 Resource allocation 2.53 Approved (þ) 0.609 – (2) 0.73
KM 2.50
4 Monitoring 2.66 Approved (þ) 0.658 – (2) 0.85
KM 2.50
5 Evaluation and improvement 2.57 Approved (þ) 0.678 – (2) 0.86
KM 2.50

Indeed, results convey that there is a significant positive relation between PDM and KM.
Also, the results have approved a casual relation between PDM and KM, testing the effects
of PDM on KM. Moreover; findings emphasized that PDM effects on KM run through
‘‘learning needs analysis and induction’’ component.

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VOL. 11 NO. 1 2010 BUSINESS STRATEGY SERIES PAGE 39
5. Conclusions
Human assets development management and knowledge management have attracted
much attention as the key strategies of the modern organizations. People have found more
significant roles on knowledge creation, sharing, storage and more importantly application
in the organization. The successful implementation of KM implementation basically relies on
opportunities, intentions, skills and abilities of the human resources department.
More studies need to be conducted to determine the effect of human assets strategies on
KM. In case of the Iranian surveyed organization, it seems there is a vital need to review the
PDM and KM strategies and develop some procedures to improve and keep the business
competitive. So the organization desiring to implement or improve both system of KM and or
PDM, certainly should take note of the interrelationships.
Since the most important factor of PDM affecting implementation and maintenance of
‘‘knowledge management’’ is ‘‘learning needs analysis and induction’’, it is an obvious
obligation to define a strategic direction, to identify the structured staff learning needs,
especially in line with business objectives, and well inducing new staffs in new jobs. Indeed,
if the organization is interested in full utilization of knowledge, it hould attract employees’
participation mainly by encouraging them to change their learning attitude and behaviors.
Finally, in parallel with learning needs analysis and induction, based on the results of the
research, all the other elements should be considered, to make sure of the successful
implementation of KM as a whole. Although the proposed model has proved no causal
relation between PDM components and KM, except in the case of ‘‘learning needs analysis
and induction’’, it doesn’t mean that no correction action is needed in other dimensions. In
other words, it is necessary to expand a well-developed people development management
project to meet a successful knowledge management.

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Corresponding author
Abbas Monavvarian can be contacted at: Amonavar@ut.ac.ir

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