KNOWLEDGE MANAGEMENT AND COMMERCIAL BANK PERFORMANCE IN KENYA
Abstract
One of the core objectives of all commercial banks is to meet the business expenses and make a return on the investment. Preferably the returns made should be on the increase as bank continues operating. Many strategies are employed to try and ensure that owners' wealth is maximized in the world where competition continues to intensify. Free entry to the markets has seen many commercial banks join the financial market, new innovative products and services are being released from time to time owing to technology being incorporate plus most of the services offered by commercial banks are now being offered by microfinance institutions (MFIs) which are now 12 in number and increase number of Saving and credit cooperative society. On top of these, customers’ expectations keep on changing as the literacy level rises and therefore to meet their demand banks have to rethink through their processes. It is against this backdrop that the current study sought to examine the effect of knowledge management on performance of commercial banks. Specifically the study sought to determine the relationship between knowledge acquisition, conversion and application on commercial banks performance. The study was based on resources based theory and knowledge economy theory. The study adopted descriptive research design and a sample of 363 respondents who were drawn from supervisors in strategic management department of 22 commercial banks. Descriptive statistics such as frequency, mean, percentages and standard deviation were used to summarize the data. Moreover, regression analysis showed the nature of the relationship between knowledge management and performance of commercial banks while correlation analysis showed the strength. Results of the study revealed a positive and significant relationship between knowledge management and commercial banks performance.
Key Words: Knowledge Acquisition, Conversion, Application, Performance of Commercial Banks
Full Text:
PDFReferences
Afzal, M., & Afzal, U. (2014). Effect of knowledge management practices and the moderating role of interpersonal trust on firm's performance: A study in software industry of Pakistan. African Journal of Business Management, 8(19), 864-872.
Ahmed, S., Fiaz, M., & Shoaib, M. (2015). Impact of knowledge management practices on organizational performance: an empirical study of banking sector in Pakistan. FWU Journal of Social Sciences, Winter, 9(2), 147-167.
Antonio, M. R., Víctor Jesús García Morales, & Daniel, A. A. (2012). Knowledge creation and flexibility of distribution of information. Industrial Management & Data Systems, 112(2), 166-185.
Antonio, M. R., Víctor Jesús García Morales, & Daniel, A. A. (2012). Knowledge creation and flexibility of distribution of information. Industrial Management & Data Systems, 112(2), 166-185.
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2007). Knowledge Management: Challenges, Solutions, and Technologies. Pearson Education, Inc.: New Jersey, USA
Birou, L., Germain, R. N., & Christensen, W. J. (2011). Applied logistics knowledge impact on financial performance. International Journal of Operations & Production Management, 31(8), 816-834.
Cantner, U., & Stützer, M. (2010). The use and effects of social capital in new venture creation – solo entrepreneurs vs. new venture teams. Jena, Germany: Max Planck Institute of Economics.
Clarke, J. L., & Turner, P. (2003). Extending the knowledge-based view: An examination of intellectual property strategies in Australian biotechnology firms. Prometheus, 21(1), 85–100.
Danish, R.Q., & Munir, Y. (2012). Impact of knowledge management practices on organizational performance; an evidence from Pakistan. International Journal of Scientific & Engineering Research, 3(8), 1-6.
Dess, G. G., Lumkin, G. T., Eisner, A. B. & McNamara, G. (2012). Strategic Management: Text and Cases. McGraw-Hill: New York.
Garicano, L., & Rossi-Hansberg, E. (2006). Organization and inequality in a knowledge economy. The Quarterly Journal of Economics, 1383-1435.
Govind, S.I., & Ravindran, S. (2009). Usefulness, incentives and Knowledge Management. Journal of Knowledge Management, 13(6), 410-430.
Hayek, F. A. (1945). The Use of Knowledge in Society. American Economic Review, 3, 519–530.
Huang, C. C., Luther, R., & Tayles, M. (2007). An evidence-based taxonomy of intellectual capital. Journal of Intellectual Capital, 8(3), 386–408.
Kinyua, G.M., Muathe, S.M.A., & Kilika, J.M. (2015). Effect of knowledge conversion and knowledge application on performance of commercial banks in Kenya. International Journal of Education and Research, 3(10), 431-445.
Kothari, C. (2011). Research Methodology: Methods & Techniques (5th ed). New age International Publishers, New Delhi, India
Lange-roodi, I. S., (2014). The effect of the knowledge management and intellectual capital on organizational performance in State banks of Rasht. Indian Journal of Fundamental and Applied Life Sciences, 4(1), 1393-1404.
Lee, H., & Choi, B. (2003). Knowledge management enablers, processes, and organizational performance: an integrative view and empirical examination. Journal of Management Information Systems, 20(1), 179-228.
Lee, I., Hsu, Y., Lin, M. J., & Chen, D. C. (2011). Relationships among unlearning, knowledge application, and new product development performance: Exploring the moderating effect of the information processing mechanism. African Journal of Business Management, 5(13), 5297-5310.
Lee, L., G. (2008). Corporate Social Capital and Firm Performance in the Global Information Technology Services Sector. Sydney, Australia: University of Sydney.
Liao, S.H., & Wu, C.C. (2009). The Relationship among Knowledge Management, Organizational Learning, and Organizational Performance. International Journal of Business and Management, 4(4), 64-76.
Lilly, L. & Juma, D. (2014). Influence of Strategic Innovation on Performance of Commercial Banks in Kenya: The Case of Kenya Commercial Bank in Nairobi County. European Journal of Business Management, 2 (1), 336-341.
Lins, V. K., Servaes, H., & Tamayo, A. (2015). Social capital, trust, and firm performance during the financial crisis. London: London School of Business.
Liu, S., & Deng, Z. (2015). Understanding knowledge management capability in business process outsourcing. Management Decision, 53(1), 124.
Lu, C., Zhu, D., & Chang, Y. (2011). The moderating role of the interactive use of management control systems (MCS) on the relation between knowledge management types and marketing project performance. African Journal of Business Management, 5(3), 687-698.
Makhija, M. (2003). Comparing the resource-based and market-based views of the firm: empirical evidence from Czech privatization. Strategic Management Journal, 24(5), 433-451.
Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital and the organizational advantage. Academy of Management Review, 23(3), 242–266.
Njomo, J. (2016, Mar 22). New banking law to protect Kenyans. Standard digital news. Retrieved from http://www.standardmedia.co.ke/article/2000195676/new-banking-law-to-protect-kenyans
Nonaka, I. (1997). Organizational Knowledge Creation. Knowledge Advantage Conference held November 11-12, 1997
Ongore, V.O., & Kusa, G. B. (2013). Determinants of Financial Performance of Commercial Banks in Kenya. International Journal of Economics and Financial Issues, 3(1), 237-252.
Orlikowski, W. J. (1996). Improvising Organizational Transformation over Time: A Situated Change Perspective. Information Systems Research, 7, 63–92.
Oso ,W.Y & Onen, D. (2009). Writing Research Proposal and Report. Nairobi: Sitima
Powell, W. W., & Snellman, K. (2004). The knowledge economy. Annual Review Sociology, 199-223.
Pratono, A. H., & Mahmood, R. (2014). Social capital and firm performance: moderating effects of environmental turbulence. Asian Social Science,10(19).
Pratono, A.H., & Mahmood, R. (2014). Social capital and firm performance: moderating effect of environmental turbulence. Asian Social Science, 10(19), 59-68.
Rasula, J., Vuksic, V. B., & Stemberger, M.I. (2012). The impact of knowledge management on organisational performance. Economic and business review, 14(2), 147-168.
Saha, M., & Banerjee, S. (2015). Impact of Social Capital on Small Firm Performance in West Bengal. Journal of management, 24(2), 91-114.
Saini, R. (2013). Impact of knowledge management practices on selected industries: a structural equation modeling approach. Management & Marketing challenges for the Knowledge Society, 8(4), 577-592.
Sekaran, U & Bougie, R. (2013). Research Methods for Business (6th ed). John Wiley & Sons Ltd
Shih-Yi, C., & Ching-Han, T. (2012). Dynamic capability, knowledge, learning, and firm performance. Journal of Organizational Change Management, 25(3), 434-444.
Smith, K.M., & Eckenrode, J. R. (2016). How disruptive forces will radically transform the industry in the decade ahead. Delloite development LLC.
Victer, R. (2014). The strategic implication of knowledge attributes. Management Decision, 52(3), 505.
Wang, Z., Wang, N., & Liang, H. (2014). Knowledge sharing, intellectual capital and firm performance. Management Decision, 52(2), 230-258.
Yeh, Y., Lai, S., & Ho, C. (2006). Knowledge management enablers: A case study. Industrial Management and Data Systems, 106 (6), 793-810.
Zhang, M., Zhao, X., Lyles, M. A., & Guo, H. (2015). Absorptive capacity and mass customization capability. International Journal of Operations & Production Management, 35(9), 1275-1294.
DOI: http://dx.doi.org/10.61426/sjbcm.v4i2.474
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.