Organisational factors
and knowledge
management within
large marketing
departments: an
empirical study
Roger Bennett and
Helen Gabriel
Introduction
Interest in the systematic use of ``knowledge
management'' (KM) as a means for gaining a
competitive edge in business situations has
grown considerably in recent years (see, for
example, Lloyd, 1996; Brooking, 1997;
Skyrme and Amidon, 1997; Davenport et al.,
1998; Nahapiet and Ghoshal, 1998). Several
reasons have been advanced for the implementation
of KM within (typically large)
companies, including the widespread digitalisation
of business environments (Clippinger,
1995); the rise of time-based competition as a
marketing weapon (requiring firms to learn as
much as possible in very short periods ±
Seemann and Cohen, 1997); the integration
of advanced manufacturing technology with
design and marketing; the globalisation of
operations (resulting in businesses having to
co-ordinate complex geographically dispersed
activities undertaken by people who rarely
meet face-to-face); and the high incidence of
mergers and takeovers whereby two or more
enterprises need to bring together different
information gathering and dissemination systems.
Joint ventures and strategic alliances
also create possibilities for obtaining competitive
advantage via KM, because ``alliances
generate the potential for firms to acquire
knowledge associated with partner skills and
capabilities which can then be incorporated
into their own systems and structures'' (Inkpen,
1996, p.123). Businesses increasingly
recognise, moreover, that the knowledge
accumulated by employees represents a valuable
asset and that the people who possess the
most knowledge are usually the best able to
resign their posts. Hence, an effective KM
system is essential for retaining employees'
knowledge within a firm.
Nerney (1997) reports survey data suggesting
that in 1997 about a quarter of US
blue-chip companies used KM, and that
another 70 per cent planned to introduce it in
1998. Likewise Skyrme and Amidon's (1997)
survey of the KM practices of 430 European
and North American companies revealed that
one-third of them were developing programmes
to improve their capabilities in the
KM field. Ninety-six per cent of the sample
regarded customer knowledge as the most
important asset for maintaining competitiveness,
followed by knowledge of best practices,
corporate competencies, and market trends.
(A majority of the firms saw the creation of an
The authors
Roger Bennett and Helen Gabriel are both at the
London Guildhall University, UK.
Keywords
Knowledge management, Intranets, Tacit knowledge
Abstract
One hundred and seventy-nine heads of sales or direct
marketing departments in large UK companies across five
industry sectors completed mail questionnaires concerning
the knowledge management (KM) practices employed
by their firms. The extents of the KM systems operating
within sample enterprises were analysed with respect to
each company's use of teamwork, level of bureaucracy
and centralisation of decision making, innovativeness,
and ability to cope with change. Respondents' views on
the contributions of KM to marketing management were
also examined.
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# MCB University Press . ISSN 1367-3270
Intranet in conjunction with a mapping of a
company's knowledge resources as the best
way to progress in the area.) Yet despite the
continuously expanding utilisation of KM by
leading-edge enterprises, hardly any research
into the in-house management of marketing
knowledge has been completed, in sharp
contrast to KM research concerning other
disciplines (particularly human resource
management and financial and operations
management). Instead, marketing academics
have concentrated on market orientation,
especially with respect to linkages between
market orientation and organisational learning
(see Bennett, 1998 for a review of this
literature). Key indicators of market orientation
allegedly include the organisation-wide
gathering of information followed by its
interdepartmental dissemination, consideration
and processing; and the organisational
use of this information to respond to change
(Kohli and Jaworski, 1990). Slater and
Narver (1995) suggest that the capacity to
react quickly and effectively to outside change
depends on a deep understanding of external
environments and the free exchange and flow
of information to ensure that expertise is
available where and when it is required.
Hence, they argue, market orientation constitutes
a critical input to the idea of the
learning organisation because it presupposes
extensive customer and competitor research,
the internal spreading and employment of
information to improve performance and the
integration of functions in order to gain
knowledge, innovate, and react quickly to
market change.
Factors other than market orientation encouraging
the development of KM include
advances in information technology (allowing
companies to accumulate vast amounts of
information on customer and market characteristics)
and the general broadening of the
typical business executive's role to incorporate
a wider variety of tasks, hence stimulating
his or her demand for knowledge. In the
marketing sphere the latter consideration
might be especially relevant vis-aÁ-vis relationship
marketing, integrated marketing
communications, customer support and liaison,
database management, and new product
development. Wilkstrom and Norman (1994)
argue that because marketing is no longer ``a
clearly delineated function at the end of the
production chain'' and that since nowadays
``there are many functions and people who
influence the customer relationship'', then it
is not logical to have marketing handled solely
by a specialist department (p.64). Thus,
knowledge about customers needs to be
shared throughout the organisation.
Nature of knowledge management
Davenport et al. (1998) define knowledge as
``information combined with experience,
context, interpretation and reflection''
(p. 43). Data begets information which in
turn can be converted into knowledge by
setting it against a background, assessing its
implications, making comparisons, and adding
other supplementary items. Information is
``descriptive and historical, relating primarily
to the past and the present whereas knowledge
is predictive and associative and unveils
hidden facts'' (Kock and McQueen, 1998).
Knowledge can be useful or useless. Useful
knowledge (i.e. that which possesses ``value
for action'' (Martinez, 1998, p.88) emerges
when the recipient of information understands,
translates and applies it to specific
duties. Knowledge is perishable but, properly
harnessed, can result in wisdom that may be
directed towards a plethora of operational
tasks. Definitions of knowledge management
abound. Four representative examples are
reproduced below which suggests that the
constructs of ``knowledge capture'', storage,
dissemination and use lie at the heart of the
KM concept.
Definitions of knowledge management
. Knowledge management is the process of
creating, capturing, and using knowledge
to enhance organisational performance
(Bassie, 1997, p. 25).
. Knowledge management is the management
of the information, knowledge and
experience available to an organisation ±
its creation, capture, storage, availability
and utilisation ± in order that organisational
activities build on what is already
known and extend it further (Mayo,
1998, p. 35).
. Knowledge management is the process of
capturing a company's collective expertise
wherever it resides, and distributing it
to wherever it can help produce the
biggest payoffs (Blake, 1998, p. 12).
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Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
. Knowledge management is about encouraging
individuals to communicate
their knowledge by creating environments
and systems for capturing, organising,
and sharing knowledge throughout the
company (Martinez, 1998, p. 89).
It follows that measures are needed to make
knowledge visible, to codify it through documentation
and electronic processing, and to
share it among an organisation's members.
Without such procedures a firm is liable to
suffer from organisational amnesia; to forget
what it did and why, and thus have an
impaired learning capacity. Table I lists the
12 most common examples of KM practices
employed by (predominantly US) companies
as reported in a sample of 60 articles on
knowledge management published in management
studies journals and practitioner
magazines in 1997 and 1998. Most of the
methods shown in Table I rely on the use of
digital business communications which facilitate
KM via the warehousing, transmission
and sharing of information through e-mail,
video-conferencing, electronic publishing,
Internet and Intranet services, and through
the tagging and linking of relevant information
in an electronic company thesaurus that
enables people to access easily any topic of
interest. Such a thesaurus (or ``company
encyclopaedia'') will hold in a single database
the knowledge currently contained in company
manuals (brand, product, operations,
etc.), process descriptions, reports, customer
databases, market (and other) research
documents, customer support materials, key
memoranda between departments, and notes
submitted by executives.
Davenport et al.'s survey of knowledge
management projects in 31 large US companies
identified four dominant objectives
within KM programmes:
(1) the creation of knowledge repositories;
(2) the improvement of knowledge access;
(3) the enhancement of the knowledge environment;
and
(4) the development of knowledge as a
corporate asset.
Knowledge repositories store the knowledge
embedded in hard copy and electronic media
and make it available to all. Some firms seek
to improve the quality of knowledge access by
creating ``expert networks'' whereby individual
queries are sent to a central section
which redirects them to expert specialists
within (or sometimes outside) the organisation.
A problem here is that the employees
most in need of help may be reluctant to seek
it for fear of being regarded as personally
inadequate. Hence incentives might be offered
to encourage people to seek assistance
(see Davenport et al., 1998). An alternative
approach is for a company to put together a
``knowledge map'' containing details of where
knowledge may be found. Seemann and
Cohen (1997) liken knowledge maps to
``corporate yellow pages'', showing the repositories
of codified knowledge and listings of
people with particular expertise (their CVs,
competency profiles, etc.) under topic rather
than departmental headings. Details of specialist
outside consultancy services might also
be included. One of the main purposes of a
knowledge map is to prevent individuals
having to ``reinvent the wheel'' consequent to
ignorance or lack of access to past experience.
A ``knowledge atlas'' is a consolidation and
cross-referencing of an organisation's knowledge
maps and is intended to illustrate
``knowledge highways'' which connect people
to the knowledge they need. Note however
that maps and atlases do not themselves store
information. A ``knowledge thesaurus'' (or
``company encyclopaedia'') will fulfil this
function, enabling browsers to search for
knowledge on specific subjects. Devices
whereby individuals come together (perhaps
electronically) to record their own experiences
and learn from others (e.g. via video-conferencing,
decision audits, or ``learned lessons
programmes'' which analyse information on
solutions to previous problems) also figure
prominently in Table I. These include
``communities of practice'', defined by Gupta
and Rohe (1997) as groups of people with a
common interest created by their exposure to
similar problems. Such a grouping is normally
voluntary and hinges on ``shared values,
beliefs and ways of doing things'' (p. 178).
Table I Knowledge management methods
Knowledge maps, atlases and
inventories
Knowledge thesauruses and
company encyclopaedias
Communities of practice Decision audit programmes
Knowledge resource pools Forums and discussion databases
Expert networks Technical libraries
Video-conferencing ``Learned lessons'' databases
Identification and analysis of
internal and external best practices
Executive masterclasses
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Volume 3 . Number 3 . 1999 . 212±225
Note how the majority of KM methods
involve the use of a company Intranet to make
the knowledge and expertise of the organisation
explicit and accessible and (crucially) to
integrate learning into the firm's knowledge
base. The development of an Intranet improves
the fluidity of the internal flow of
information, which branches out horizontally
as well as vertically into all parts of the
business. Employees can publish information
on their personal homepages as well as gather
information continuously from a multitude of
sources. This should improve company decision
making, enable employees to respond
quickly to complex enquiries about products,
contract terms, etc., innovate, and become
more efficient in their operations (Chase,
1998). A problem with the implementation of
KM is the fact that staff need to be trained in
writing, editing and formatting skills in order
to input items to a knowledge repository, as
information has to be presented in a prescribed
standardised fashion. More generally,
KM is said to require ``new skills, new mindsets
and models, commitment throughout the
organisation, as well as new thinking on what
is meant by effective management'' (Lloyd,
1996, p. 576). Two particular difficulties
relating to the latter are:
(1) that knowledge is an ``invisible, intangible,
ephemeral, soft asset'' (Clippinger,
1995, p. 28) whereas managers traditionally
have been accustomed to working
with assets that are tangible and concrete;
and
(2) that since ``knowledge is power'' it follows
that ``knowledge politics'' are important
within organisations, with the sharing of
knowledge by managers being frequently
regarded as threatening and ``unnatural''
(Davenport, 1997, p. 189).
It is essential that within the knowledgedriven
company all knowledge enters the
common domain and cannot be used by
individuals to advance their personal interests.
Hence, shared decision-making,
teamwork, group bonuses, and reward systems
that emphasise contributions to
information input and dissemination rather
than information retention are necessary.
Chase's (1998) international survey of the
approaches adopted to KM in 500 companies
revealed that 80 per cent of respondents cited
``existing organisational culture'' as the major
barrier to the implementation of a knowledge
based management system. Other important
problems were ``lack of ownership of the
problem'' (64 per cent), ``organisational
structure'' (54 per cent), ``lack of senior
management commitment'' (46 per cent),
``lack of rewards and recognition'' (46 per
cent) and ``emphasis on individuals rather
than teamwork'' (45 per cent). Skyrme and
Amidon's (1997) survey of 430 firms similarly
found that a majority recognised that their
internal cultures represented a major barrier
to effective knowledge transfer, and that
employees' behaviour would have to alter.
Knowledge categories
Marketing requires knowledge of customers
and their preferences, competitors, products,
distribution channels, service providers, laws
and regulations, and general management
practices. This knowledge needs to be stored
in a company ``knowledge base'' comprising
brainware, hardware, groupware and documentware
prior to its transformation and
hence application to useful activities (Zeleny
et al., 1990). Brainware consists of experience,
personal skill and acquired knowledge;
hardware is the processes, equipment and
other touchable items that incorporate
knowledge. Groupware encompasses informal
procedures, rules of thumb, stories and
unwritten protocols; while documentware is
made up of databases, written reports, handbooks,
patents, and formally documented
knowledge held within information systems.
Once it has been internalised, the company's
knowledge needs to be accessible to persons
who need it, e.g. via its availability in
documentware, through verbal communications
within a human network, through
retention in databases, etc. Employees have to
know what knowledge exists within the
organisation and which of their own experiences
should be downloaded into the
knowledge base in order to assist others.
Company knowledge bases invariably possess
several layers: personal, departmental,
divisional, strategic business unit, and organisational.
Very often, however, a large
amount of a firm's knowledge is stored in
brainware, i.e. the least traceable and accessible
medium and hence the most difficult to
transmit and then deploy in an optimal
manner. Hence, effective KM frequently boils
down to the selection and implementation of
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Volume 3 . Number 3 . 1999 . 212±225
methods for transforming knowledge stored
in brainware (and thus only available to one
or a few individuals) into forms (groupware,
documentware and hardware) that can be
shared by many other people. The most
common vehicle for sharing knowledge within
organisations is perhaps oral communication
(see Kerssens-Van Dronglen et al., 1996), but
it is known that this is not necessarily the best
medium. Rather, theory predicts that the use
of structured task and responsibility sharing
project teams is far more likely to lead to
meaningful and comprehensive flows of
knowledge among team members, and hence
to improved performance (Hauptman, 1986;
Brown and Eisenhardt, 1995). Action-orientated
task fulfilling project teams, it seems, are
a powerful device for transforming tacit
knowledge into explicit knowledge. The latter
is capable of codification and articulation and
thus can be transferred easily. Tacit knowledge,
conversely, resides in the minds of
people, and is not amenable to transfer
(Grant, 1997). Individuals are the primary
repositories of tacit knowledge, which is
difficult to unravel and to communicate
between sections.
For example, salespeople's knowledge
about customers is often tacit in that it is
personal, anecdotal and situationally prescribed.
Such knowledge, according to
Clippinger (1995), is ``typically neither created
nor shared through traditional channels,
rather it emerges and evolves from the bottom
up in a somewhat helter-skelter pattern'' (p.
28). Edvinsson (1996) similarly points out
that much customer relationship knowledge is
tacit and transferred via conversation and onthe-job
training (and also that it is not
protected by intellectual property law so that
once transferred there are few means for the
original owner to reassert ownership). Note
how downsizing and re-engineering exercises
result not only in the loss of the tacit knowledge
held in the heads of the outgoing people,
but also tend to discourage those who remain
from sharing their (politically valuable)
knowledge. The tacit knowledge possessed by
employees leaving a business may be tapped
by inviting them to make (``master class'')
seminar presentations which are recorded and
entered in the company's thesaurus. Davenport
et al. (1998) report that Hewlett-Packard
tackle this problem more formally via the use
of a community-based electronic discussion
forum designed to transfer tacit knowledge
into a repository. This system ``captures tips,
tricks, insights and experiences'' into a Lotus
Notes Database and makes them available to
more than 2,000 people scattered in the
company's branches throughout the world.
Interestingly, the frequency of communication
between individuals has not been found
to facilitate information transmission (Lee,
1994). Instead the ``kinds of person'' involved
and the quality of their relationships may be
considerably more important.
The investigation
The present study sought to gain an insight
into how marketing executives in large companies
manage knowledge and to explore the
relationships between the extent and nature of
a company's KM and certain organisational
factors. Specifically, the investigation examined
knowledge management in two
functional areas (direct marketing and sales
management), where significant concern for
and involvement with knowledge management
are the most likely to be found. Direct
marketing is a specialist function with technical
as well as managerial dimensions and
requires a knowledge of inter alia, database
management, consumer behaviour, market
research, budgetary control, promotional
media and creative strategy, and various
aspects of the direct marketing services
industry. Reed (1997) notes that UK direct
marketing managers are on the average
younger, academically better qualified, and
better paid than marketing personnel in other
functional areas. They represent a knowledgebased
resource whose work involves the
utilisation of both practical and cognitive
knowledge. Direct marketing technology has
advanced at a rapid rate and is today capable
of handling huge quantities of information.
The discipline is high-tech, subject to continuous
change and a big employer of
intellectually able and occupationally mobile
people (Bennett and Gabriel, 1998).
Likewise, sales management has recently
experienced widespread technological change
(see Barker, 1997 and Parthasarathy and
Sohi, 1997 for details of relevant literature),
with automated sales force management and
feedback systems being increasingly applied
to the selling function (Grove et al., 1992;
Holstrom and Anders, 1996). Indeed,
Parthasarathy and Sohi (1997) cite estimates
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Volume 3 . Number 3 . 1999 . 212±225
of US companies having spent more than
US$2.7 billion on salesforce automation in
1997. Knowledge management relating to
sales allegedly enhances customer service
relationships, decreases response times and
improves teamwork and inter-departmental
co-ordination (Albers, 1997). For example,
Ainscough et al. (1996) describe how a
knowledge base for sales staff can be created
from the ``selling scripts'' and experiences of
multiple expert salespeople recorded in a
computer expert system, which can then be
used to gain competitive advantage. Barker
(1997) claims that ``automated salespeople''
are on average three times more productive
than sales staff in firms without IT-related
selling facilities because computer technology
contributes substantially to sales forecasting
and planning, the rapid provision of customer
contact and status information, and the
accumulation of knowledge about markets,
distribution channels, customer service requirements,
etc. Note moreover how
teamwork and knowledge sharing is known to
be critically important for improving sales
force effectiveness (El-Ansary et al., 1993;
Barker, 1997).
An important aim of the study was to
examine the influence of organisational factors
on the implementation of KM within
large companies. Graham and Pizzo (1996)
argue that effective KM is most likely in
businesses that find the right balance between
organisation systems which on the one hand
are sufficiently open and flexible to allow
creativity to flourish, but on the other possess
enough formality and discipline to ensure that
creativity produces tangible outcomes. Bureaucracy
and formal communication, they
suggest, inhibit spontaneity, experimentation
and the freedom of expression necessary for
innovative responses to environmental change
(such as the application of KM). Equally,
however, a formal bureaucracy might facilitate
the ``rapid and continuous
transformation of ideas into superior products
and services'' (Graham and Pizzo, 1996, p.
338). They acknowledge that a great deal of
knowledge originates from personal intuition,
networking and chance encounters, but contend
that structured and standardised
procedures are needed to capture, control and
connect the knowledge thus gained to business
objectives. Other researchers have
similarly concluded that mechanistic organisation
structures are better for internal
knowledge dissemination (see Menon and
Varadarajan, 1992 for a review of relevant
literature). Thus, it has been alleged, formal
and centralised systems facilitate communication
flow via their extensive monitoring and
reporting requirements, and through their
increased utilisation of marketing plans and
policy implementation programmes which
demand large amounts of information. Centralisation
of decision making, in particular,
has been found to facilitate the implementation
of innovations as it enables the
development of precise and definite control
procedures throughout a company (Gatigon
and Robertson, 1985; Fletcher et al., 1996).
Concomitantly, centralisation is said to assist
the introduction of any technological innovation
which requires organisational
standardisation for its proper adoption
(Parthasarathy and Sohi, 1997). KM systems
typically depend on organisational standardisation
as they are usually tied to standard
hardware, software and training. Therefore,
according to this argument, large centralised
organisations are more likely to adopt KM
innovations. John and Martin (1984) claim
the existence of empirical evidence of positive
significant linkages between centralised bureaucratic
formalisation and the
implementation of innovative programmes.
The alternative position alleges that flexible
and relatively informal management structures
facilitate (i) fast and effective internal
communications and willingness to accept
change, and (ii) interdepartmental communication
and the frequent and unhindered
sharing of information that successful operation
within turbulent commercial
environments necessitates (Woodman et al.,
1993). Arguably, firms operating such systems
are more adventurous in their
information gathering activities, more critical
in their interpretation of information, and
encourage individual initiative which in turn
intensifies the thirst for knowledge.
Wilkstrom and Norman (1994), in particular,
assert that KM fits best with an open
organisational environment ``capable of eliciting
the creativity, the problem-solving
capacity and the social and business competence
represented by its employees'' (p. 69)
mainly because of the quintessentially innovative
character of knowledge generation,
which requires an organisational climate
based on flexibility, variation and renewal.
Thus, ``conservative renewal-inhibiting values
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Roger Bennett and Helen Gabriel
Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
suffocate generative forces at birth'' (p. 73),
and knowledge creating people leave the
company. Ekvall et al. (1987) also conclude
that bureaucratic organisation structures restrain
internal knowledge dissemination
consequent to their hierarchical, complicated
and time-consuming communication channels.
They argue moreover that the caution
and conservatism typical of employees operating
within formalistic structures are
incompatible with innovative knowledge
management. Bureaucracy has the potential
to clarify goals and situations; but it has been
claimed that even this aspect of it inhibits the
more radical forms of innovativeness and
creativity via its detrimental impact on
``challenge, support for ideas, freedom and
trust'' (Wilkstrom and Norman, 1994, p. 78).
The very existence of clear-cut goals might
dampen the discussion of new ideas that is
essential for effective knowledge manage-
ment.
Such considerations suggest the following
hypothesis:
H1 The less bureaucratic an organisation the
more likely that it will possess extensive
KM systems.
A number of researchers have concluded that
firm size is positively related to the adoption
of new innovations (see Fletcher et al. (1996)
for details of empirical studies supporting this
proposition), allegedly because larger enterprises
possess the resources to meet the high
capital outlays needed to introduce new
systems. Also big companies might have the
management expertise necessary for the effective
implementation of the latest methods.
This leads to a second major hypothesis, viz:
H2 The larger the company the more likely it
is to have an extensive KM system.
Organisations which welcome change are
perhaps more likely to possess a culture which
encourages the gathering of information and
the sharing of knowledge (Deshpande and
Webster, 1989). Ideas will be exchanged and
communication flows increased. Risk-taking
is common in a change-friendly business,
again creating demands for knowledge and
information. This implies:
H3 The more change-friendly a business the
higher the probability that it will have a
substantial KM system.
Likewise, environmental turbulence is associated
with uncertainties that increase the
need for information (and hence knowledge).
Hence there is ambiguity about the right
courses of action to take and perhaps therefore
a greater demand for knowledge. Thus:
H4 The more turbulent and uncertain the
commercial environment within which a
company operates the more likely that it
will have extensive KM facilities.
In order to test these hypotheses (and to
explore other relevant issues emerging from
previous sections), a questionnaire was developed
consequent to a review of relevant
literature in the KM field and pretested on a
sub-sample of 75 large UK companies selected
at random from the sampling frame for
the investigation. Concomitantly, telephone
interviews were conducted with the chief
information officers of two major firms (one
in engineering, the other in financial services)
with a view to improving the relevance and
precision of specific questionnaire items.
After a follow-up, 17 replies were received (23
per cent) which enabled the refinement of the
wordings of the draft questions and the
removal of redundant statements. The sampling
frame for the study comprised the sales
and direct marketing (DM) directors of the
UK's 100 largest companies (by turnover) in
each of the following sectors: retailing; financial
services; food manufacture and supply;
electrical and electronic machinery, equipment
and supplies; chemical and allied
products. The addresses of sampling frame
firms were downloaded from Volume 6 of Key
British Enterprises 1998 (Dun and Bradstreet
Ltd) resulting (after the deletion of entries
obviously not concerned with direct marketing
or salesforce management) in a mailing to
300 direct marketing directors and 500 sales
directors. After follow-ups a total of 179
replies were received (22 per cent), comprising
101 from sales directors and 78 from DM
executives. Although this is less than a
majority of the sampling frame it is considered
satisfactory because: (i) the response rate is
comparable with those achieved by similar
studies employing sampling frames of unnamed
senior executives in major blue-chip
companies (see Morgan et al., 1998, p. 361);
(ii) response rates were similar across the five
sectors; and (iii) there was no statistical
evidence of response bias within the replies.
Responses were scanned for significant (p <
0.01) differences (using the Mann-Whitney
U-test available on SPSS) between the results
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Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
for: the earliest and latest batches of questionnaires
returned; sales and DM directors;
and firms in the five industry sectors, no such
differences emerging. Also a large number of
firms (11 per cent) of the sample sent letters
stating that it was company policy not to reply
to questionnaires, indicating that this was the
dominant reason for non-response.
The questionnaire itself had five sections,
the first of which asked respondents to tick
boxes indicating which KM methods were
already employed within their companies, and
which methods they were intending to implement.
This was followed by two sections
containing (shuffled) items relating to organisational
issues (centralisation of decision
making; bureaucracy and the ability to cope
with change); innovative tendency; knowledge
accessibility within the firm; teamwork;
and whether individuals were prepared to
share knowledge with colleagues. All items
were scored on 5-point scales: 5 = strongly
agree, 1 = strongly disagree. Section 4 had a
number of questions concerning company
size, the number of marketing employees,
perceived financial performance relative to
competing firms, and the turbulence of the
company's environments. The final section
involved perceptions of the contributions of
KM to sales management or direct marketing
(5-point scales: 5 = very important contribution,
1 = no contribution whatsoever)
depending on the person to whom the
covering letter was addressed. Although the
questionnaire was mailed to two separate
addressees (sales director and head of direct
marketing) in 300 of the sampling frame
companies, replies from both people in the
same company were received in only 17
instances. Where this occurred the two
responses were averaged and the mean replies
for that enterprise used for subsequent
analysis.
Results
Table II gives the results regarding which of
the various KM methods listed in the questionnaire
were currently in use within
respondents' firms, and which ones they
intended implementing in the near future
(figures in parentheses show the percentages
of companies planning to introduce a particular
method). It can be seen that company
KM systems were overwhelmingly based on
the use of an intranet (53 per cent, with a
further 38 per cent stating that one would be
introduced in the near future), and that videoconferencing,
company encyclopaedias and
the employment of electronic devices such as
``Lotus Notes'' were commonplace. Half the
sample companies possessed formal procedures
for identifying and considering best
practices, with nearly a third more planning to
introduce this technique.
An initial examination of the results suggested
that they differed mainly between firms
operating numerous KM systems and those
which applied just a couple. This was
confirmed by a K-Means clustering of the 162
cases (via SPSS 8.0) into two groups using the
total number of KM methods employed by a
company as one of the discriminating variables
and the composite variable for
``knowledge accessibility'' within the firm as
the other. The two-cluster solution outperformed
three- to five-cluster alternatives
(RMSD = 2.01); the ANOVA for the
accompanying discriminant analysis generating
F-values (1, 160 df) of 98.712 and 48.971
respectively (p < 0.000). These discriminants
had Wilks' Lambdas of 0.189 and 0.221 and
successfully allocated 86 per cent of all cases
into either of two categories: companies using
three or less techniques (hereafter referred to
as ``limited KM'' enterprises, N = 69), and
those applying four or more techniques (N =
93). (The latter firms will subsequently be
described as having ``extensive'' KM.) Table
III shows the mean responses for these
groupings vis-aÁ-vis sections of the questionnaire
dealing with an enterprise's perceived
ability to cope with change, innovative tendency,
use of teamwork, and bureaucratic and
centralisation inclinations. Clearly, changefriendly
firms were more likely to employ KM
extensively (see section A of Table III).
Significant differences also arose between the
two groups in respect of experimentation and
innovation (B(i)), and interaction among
departments to discuss plans and strategies
(C(iii)). Critically, companies regarded as
bureaucratic (D(i)) and as operating highly
centralised decision making (D(iii)) were
more likely to have extensive KM systems
than others, implying the rejection of the first
(and central) hypothesis of the investigation.
Cronbach's alpha was computed for the items
within each of the sections A, B and C, the
results (see Table III) indicating sound
reliability. Hence the scales for the items in
219
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Roger Bennett and Helen Gabriel
Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
Table II Knowledge management methods
Formal listings of where knowledge on
various topics is to be found (such
listings are sometimes known as
``company yellow pages'', ``knowledge
maps'' or ``knowledge atlases'')
25%
(30%)
Use of Lotus Notes or similar electronic
devices whereby people record their
experiences of specific issues, problems,
activities, etc.
38%
(24%)
Use of an Intranet (i.e. the ``in-house''
version of the Internet) to publish
information
53%
(38%)
Identification and discussion of internal/
external ``best practices''
50%
(31%)
A formal system for referring difficult
problems to specialist experts.
6%
(32%)
Technical libraries within the company 45%
(15%)
Electronic storage of company policies,
procedures, operating manuals, etc. on
an accessible database (sometimes
called a ``company encyclopaedia'' or
``company thesaurus'')
38%
(28%)
Video-conferencing
Seminars/presentations given by
executives about to leave the company
(these are sometimes referred to as
``master-class seminars'')
42%
(22%)
2%
(5%)
Electronic discussion forums 13%
(9%)
``Communities of practice'', i.e. meetings
of people with a common interest in
certain types of problem
31%
(19%)
``Learned lessons programmes'', i.e. the
systematic analysis of solutions to
previously experienced problems
2%
(8%)
Decision audits, i.e. the systematic
analysis of the effectiveness of the
procedures used to make important
decisions
17%
(21%)
Note: Figures in parentheses refer to the percentages of respondents stating that their firms intended introducing
the technique in the near future
Table III Organisational issuesa
(mean values) b
Limited
KM
(N = 69)
Extensive
KM
(N = 93)
A. Ability to cope with change (alpha = 0.94)
(i) This organisation can cope with rapid and unexpected change 2.44 2.97c
(ii) This organisation can quickly reallocate its resources and undertake new
activities in order to exploit emerging opportunities
2.63 2.95
(iii) It takes this organisation a long time to alter its working methods and
procedures
2.11 1.88
B. Innovation (alpha = 0.92)
(i) This organisation regularly experiments and innovates in its use of
marketing methods, advertising, promotional materials, etc.
2.52 3.06c
(ii) If other firms introduce new marketing methods we quickly adopt them
ourselves.
2.70 2.63
(iii) Employees of this company are encouraged to question existing policies
and working methods, to innovate and challenge current systems
2.50 2.55
C. Teamwork (alpha = 0.89)
(i) In this firm interdisciplinary cross-functional teamwork is extremely
important for taking decisions and solving problems
2.67 2.46
(ii) In this firm group (rather than individual) bonuses make up a significant
part of managers' total remunerations
2.82 2.92
(iii) People from different departments frequently interact to discuss current
marketing strategies and future plans
2.40 3.19c
D. Bureaucracy and centralisation
(i) This organisation is very bureaucratic 2.42 2.96c
(ii) This firm has many rules and procedures that must be followed when
making decisions that lead to change
2.59 2.88
(iii) Management decision making within this organisation is highly centralised 2.50 2.97c
Notes: a
5-point scales: 5 = strongly agree; 1 = strongly disagree. A shuffled ordering of the items appeared in the
original questionnaire; b
Standard deviations varied between 0.70 and 1.19; c
Denotes a statistically significant
difference at the 0.05 level or less
220
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Roger Bennett and Helen Gabriel
Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
each section were combined to form three
composite variables. Items (i) and (ii) of
Table III section D correlated significantly (R
= 0.87) and thus were composited. However
the correlation between this new variable and
D(iii) (i.e. centralisation of decision making)
was (at R = 0.41) insufficient to justify the
latter's incorporation into the bureaucracy
aggregate.
Table IV gives the mean responses for
questionnaire items relating to (i) respondents'
perceptions of how readily knowledge
could be accessed within their organisations,
and (ii) employees' willingness to share
knowledge. (The Cronbach alphas for these
collections of items were sufficiently high to
permit their combination into single-scale
variables.) It can be seen that the extensive
application of KM was significantly associated
with easier access to knowledge
(section A), and that firms with extensive KM
tended to encourage knowledge sharing via
their reward and appraisal systems (B(ii)).
These latter companies gave their employees
more training in KM than did firms in the
other category (C(ii)) although the difference
was not significant (the standard deviations
for this variable were larger than for any other
item).
Respondents' perceptions of the relative
importance of the contributions of their KM
systems to various aspects of marketing
management are outlined in Table V, which
gives the results for both the questionnaire
referring specifically to direct marketing activities
and the one focusing on sales
management. Table V indicates significant
differences in perceptions of the contributions
of KM in relation to knowledge of customers
and markets (items (a) and (n)), sales and
campaign planning (items (c) and (i)), and
cost control (item (m)). The alpha value for
the 14 elements of Table V was 0.89,
justifying their combination into a single scale
to measure the perceived level of KM's
contributions to marketing management.
To investigate further the implications of
Tables II to V, regressions were run seeking to
explain the dependent variables listed in
Table VI. A stepwise procedure was adopted
Table IV Knowledge processinga
(mean values)b
Limited
KM
(N = 69)
Extensive
KM
(N = 93)
A. Knowledge accessibility (alpha = 0.86)
(i) Within this organisation, managers invariably know where they can find
the knowledge, expertise and information they need
2.45 3.66c
(ii) This firm has formal systems for routeing knowledge on specific topics to
managers with an interest in the subject
2.51 3.29c
(iii) Within this firm, managers have easy access to the information they need 2.70 3.37c
(iv) Within this firm, most knowledge is held in the heads of employees rather
than in documents and databases
2.50 2.38
B. Reluctance to share knowledge (alpha = 0.92)
(i) Within this firm people tend to hang on to the knowledge they acquire and
are reluctant to share it with others
2.72 2.83
(ii) The appraisal and/or reward systems of this firm encourage employees in
different sections and departments to interact, work together and share
the knowledge possessed by various sections
2.85 3.44
(iii) Employees fear that sharing their knowledge with others might reduce
their influence within the firm
2.78 2.61
(iv) Within this firm, interdepartmental knowledge sharing occurs as a matter
of course
3.01 3.32
C. Miscellaneous
(i) Within this firm, knowledge is disseminated to a wide range of people
rather than on a ``need to know'' basis
2.40 2.54
(ii) Managers receive training in the skills needed to input information to
company knowledge management systems
2.52 2.99c
(iii) Within this firm people tend to disseminate the knowledge they acquire
through informal rather than formal methods
2.96 2.77
Notes: a
5-point scales: 5 = strongly agree; 1 = strongly disagree. A shuffled ordering of the items appeared in the
original questionnaire; b
Standard deviations varied between 0.66 and 1.31; c
Denotes a statistically significant
difference at the 0.05 level or less
221
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Roger Bennett and Helen Gabriel
Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
whereby any regressor failing to assume
significance at the 0.1 level was dropped
provided its exclusion did not worsen the
overall explanatory power of the results.
Outputs were then checked for statistical
problems (multicollinearity, heteroscedasticity,
etc.) using the M-Fit package (no serious
difficulties becoming apparent). Regression A
of Table VI attempts to explain the total
number of KM methods employed by a
company (as defined in Table II). The outcome
confirms the proposition that firms
perceived as bureaucratic and as utilising
centralised decision making tend to have
more extensive KM systems than the rest.
Also significant were ``relative financial performance''
and ``environmental turbulence''.
The former variable was obtained from a
questionnaire item which asked respondents
to specify the extent to which they agreed or
disagreed (5-point scale) with the statement
``This firm's overall financial performance has
in general been better than that of competing
firms''. A high score for the item should
indicate that a firm has been generating the
resources necessary to install new management
systems. Note that because KM is a very
recent innovation, the reverse direction of
causality is unlikely to have occurred: KM will
not normally have been in place long enough
for it to have exerted a significant influence on
company profits. Two questionnaire items
assessed the degree of environmental turbulence:
``The markets in which this firm
operates are subject to rapid and unexpected
change'' and ``This firm operates in a fiercely
competitive environment''. Responses to
these items were highly correlated (R = 0.802,
p < 0.000), justifying their aggregation into a
single measure. (Items (e) and (f) were not
used as regressors in this equation as they
represent consequences of KM rather than
causes.) As a check on the results for
regression A it was rerun with the dependent
variable (arbitrarily) weighted in terms of
possible differences in the relative importance
of its constituent elements. Thus, possession
of a company library was given a weight of 1;
identification and discussion of best practices
scored 2, etc; through to scores of 12 for the
(advanced) techniques of company thesauruses
and knowledge atlases. This
modification did not change the overall
structure of the regression output, although
the significance levels of innovative tendency
and relative financial performance increased
substantially.
Regression B seeks to explain composite
scores for respondents' perceptions of the
value of the contributions made by KM to
marketing (see Table V). Knowledge accessibility
was a major factor influencing
perceived contribution levels. Reluctance of
employees to share their knowledge (see
Table IV(B) affected this variable negatively.
Other significant influences were the amount
of teamworking within the firm and whether
the company was change-friendly.
Table V Perceived contributions of KM systemsa
Limited
KM
(N = 69)
Extensive
KM
(N = 93)
(a) Knowledge of customer characteristics (lifestyles, locations etc.) 3.02 4.19b
(b) Knowledge of competitors 2.40 2.97b
(c) Sales planning and forecasting 3.01 4.0b
(d) Monitoring/evaluating selling activities 2.44 2.23
(e) Database management 2.69 2.50
(f) Monitoring/evaluating DM campaigns 2.74 2.91
(g) Knowledge of customer buying behaviour 2.65 2.70
(h) Market segmentation/targeting 2.12 1.87
(i) Campaign planning 2.60 3.3b
(j) Knowledge of customer service requirements 2.43 2.15
(k) Knowledge of external marketing services firms 1.46 1.18
(l) Administrative management 1.89 1.58
(m) Cost control 3.20 4.07b
(n) Knowledge of markets and market trends 2.51 3.46b
Notes: a
5-point scales: 5 = very important contribution; 1 = no contribution whatsoever. Standard deviations
varied between 0.69 and 1.06; b
Denotes a statistically significant difference at the 0.05 level or less
222
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Roger Bennett and Helen Gabriel
Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
Regressions C and D are logistic regressions
with the state variable 1 = The company does
possess an Intranet (or knowledge map in the
case of regression D); 0 = The company does
not possess an Intranet (or knowledge map).
Centralised decision making is a significant
independent variable in both equations. Bureaucracy
is also significant in regression D. It
is clear moreover that innovative tendency
and the availability of resources (item (g)) also
help explain the adoption of these (relatively
sophisticated) KM methods. Company size
did not figure prominently in any of the
regressions. The median number of employees
of the sample companies was 26,000
(range 701 to 181,000); the median size of
their marketing departments was 110 employees.
It seems that organisational factors
and internal management orientations are
more important in these respects than the size
of an enterprise's workforce.
Conclusions
The results of the present study do not
support hypothesis 1, that the less bureaucratic
an organisation the more extensive its
KM systems. Rather the outcomes are highly
compatible with the view that bureaucracy
facilitates the introduction of new methods
(cf. Rogers, 1983; John and Martin, 1984;
Menon and Varadarajan, 1992; Graham and
Pizzo, 1996). Also, centralised decision making
seemingly enhanced the ease with which
KM could be applied within sample companies
(cf. Gatigon and Robertson, 1985;
Fletcher et al., 1996; Parthasarathy and Sohi,
Table VI Regression analysis
A B C D
(T-values in
parentheses)
(T-values in
parentheses)
(Chi-square
values in
parentheses)c
(Chi-square
values in
parentheses)c
(a) Bureaucracy composite 0.612
(2.02)a
0.221
(2.76)
0.20
(3.97)a
(b) Centralised decision making 0.599
(2.07)a
0.644
(1.72)
0.159
(3.89)a
0.299
(4.21)a
(c) Innovative tendency composite 0.677
(1.90)
0.267
(4.0)a
0.261
(3.99)a
(d) Teamwork composite 0.406
(1.82)
0.599
(2.11)a
0.101
(2.04)
(e) Ability to cope with change
composite
0.727
(3.46)b
(f) Knowledge accessibility composite 0.710
(3.61)b
(g) Relative financial performance 0.802
(3.723)b
0.291
(4.45)a
0.251
(4.01)a
(h) Reluctance to share knowledge
composite
±0.491
(2.08)a
(i) Size (number of employees) 0.179
(2.89)
(j) Environmental turbulence composite 0.724
(2.26)a
0.795
(1.54)
R-squared 0.672 0.641
-2LL statistic 110.5
(155 df)
97.74
(157 df)
Regression Chi-square 29.2
(7 df)
24.53
(5 df)
Notes: a
Denotes statistical significance at the 0.05 level; b
Denotes statistical significance at the 0.01 level;
c
Wald Chi-squares with 1 df.
Dependent variables: A. Extent of a company's KM system; B. Level of the perceived contributions of KM to marketing
management; C. Company does/does not have an Intranet; D. Company does/does not have a knowledge map
223
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Roger Bennett and Helen Gabriel
Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225
1997). No evidence emerged to suggest that
bureaucracy and centralisation stifled the
widespread utilisation of innovative KM
systems (cf. Ekvall et al., 1987; Woodman et
al., 1993; Wilkstrom and Norman, 1994).
Hypothesis 2 is also rejected: internal orientations
and how well a firm had been
performing financially were better predictors
of the extent of a company's KM than was the
number of people it employed. The third
hypothesis is generally supported. Change
friendly enterprises were more likely to have
extensive KM than others, and this variable
significantly affected respondents' views on
the contributions of KM to marketing management.
The results are also compatible with
hypothesis 4: firms regarded as operating in
especially turbulent environments tended to
operate KM systems more extensively than
the rest.
Overall the outcomes to the study underscore
the value to an enterprise of developing
formal KM procedures. Companies which
used KM extensively were on the whole those
reported to be more innovative, readier to
cope with change, and better able to access
knowledge than other firms. In general the
contributions of KM to both direct marketing
and sales management were highly regarded.
It is clear from the results that KM is being
taken extremely seriously by this sample of
large UK companies, and that new KM
techniques are being introduced at a rapid
rate. Note however that a couple of the
practices described in the US literature on
KM do not appear to have been taken up
within these large UK firms. Table II shows
that there was minimal use of ``master class''
seminars given by people about to leave a
company, and hardly any systematic analysis
of solutions to previously experienced problems.
This raises the possibility that British
companies might be able to gain substantial
benefit by implementing these techniques
more widely, hence avoiding the problem (cf.
Davenport, 1997; Chase, 1998) of ``knowledge
walking out of the door'' when
individuals leave a firm.
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Journal of Knowledge Management
Volume 3 . Number 3 . 1999 . 212±225