Knowledge Management Enabler Factors and Firm Performance: An Empirical Research of the Greek Medium and Large Firms

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1. Introduction Rapid and constant advances in information technology have pushed the world in a new economical era. Knowledge management (KM) has been a natural evolution over the first years of the twenty-first century, and a hot topic in several business communities. The ability to manage knowledge is becoming increasingly more crucial in today's knowledge economy. The task of effective and competitive management of organizations becomes necessary, and knowledge management, if understood and applied properly, may be a useful tool for business transformation as well as the key of competitive advantage (Jennex, 2007). Knowledge management enables an organization to gain insight and understanding from its own experience and procedures. One of the key concerns that have emerged related to knowledge management is how to accomplish it successfully. Thus, it is considered crucial to identify the factors that influence the success of knowledge management initiatives. Knowledge management enablers are the mechanism for the organization to develop its knowledge and also stimulate the creation of knowledge within the organization as well as the sharing and protection of it. They are also the necessary building blocks in the improvement of the effectiveness of activities for knowledge management (Ichijo et al., 1998; Stonehouse and Pemberton, 1999). Enabler factors should be clear in an organization, because not only they create knowledge but they also prompt people to share their knowledge and experiences with others (Yeh, Lai, & Ho, 2006). The objective of this study is to empirically investigate and test the most critical factors that influence knowledge management' effectiveness within organizations, which in turn influence positively the total performance of the firm. This research presents the result of a survey which was conducted in 109 Greek companies. This research draws on existing studies, frameworks and models that have already identified the factors that potentially affect knowledge management's success. This paper is structured as follows: Section two refers to the literature and the empirical evidence concerning the various factors that affect the effectiveness of knowledge management process and lead to competitive advantage and thus to firm performance above the industry average. Section three presents the theoretical model and its hypotheses. Section four describes the research method adopted and the characteristics of the companies/respondents. Section five refers to the statistical analysis of the research results. Finally, section six includes the research conclusion and the implications that could be drawn from this research, as well as some proposed future research directions. 2. Literature review 2.1 What Knowledge Management is? Knowledge Management is an impressive, multidisciplinary, and controversial concept. Knowledge Management enables the existing individual knowledge to be captured and transformed into organizational knowledge, which in turn must be diffused and shared by many employees. These employees use this knowledge but they also create new individual, which becomes organizational, and so on. Knowledge Management is also the management of organization's knowledge that can improve many features of organizational performance so as to be more intelligent acting (Gupta, Iyer, & Aronson, 2000). Although knowledge management has been extensively studied by researchers and academics there is not exist a generally accepted definition of knowledge management concept. Defining knowledge management is not an easy issue because it is multi-faced and controversially concept and what's more is a mix of strategies, tools, and techniques. Different authors and researchers have presented different definitions of knowledge management. Wiig (1995) proposed that Knowledge Management is a group of clearly defined process or methods used to search important knowledge among different knowledge management operations. …