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Mathematics and Computers in Contemporary Science
ISBN: 978-960-474-356-8 187
A Conceptual Framework of Antecedents and Impacts of Knowledge
Quality on SMEs’ Competitiveness
NASER VALAEI, NORSHIDAH MOHAMED, NOR SHAHRIZA ABDUL KARIM
International Business School
Universiti Teknologi Malaysia
Level 10, Menara Razak, Jalan Semarak, 54100, Kuala Lumpur,
MALAYSIA
vnaser2@live.utm.my http://www.ibs.utm.my
Abstract: Knowledge quality is a new concept. It refers to the extent to which individuals’ awareness and
understanding towards ideas, logics, relationships, and circumstances are fit for use, relevant and valuable to
context, and easy to adapt. The paper proposes that knowledge quality constitutes intrinsic knowledge quality,
contextual knowledge quality, actionable knowledge quality, and accessibility knowledge. Knowledge quality
requires an organization’s absorptive capacity, functional diversity, openness, lean organizational structure,
friendly organizational culture, and technology utilization capabilities. The impacts of knowledge quality are
improvisational and compositional creativity, which are enablers of innovation. This as a whole makes up
competitiveness. This paper conceptualizes a model of competitiveness for small and medium-sized enterprises
(SMEs) and develops 13 propositions based on the theories of sense making, knowledge management, and
creativity.
Key-Words:
Knowledge quality; sense-making theory; SMEs
1 Introduction
SMEs are the engine of growth all around the world
[50]. Their agile and flexible capabilities are the key
to their industry growth. As small companies, their
competitiveness is critical in survival and sustaining
the business. The need to innovate new products and
services so as to not lag behind larger enterprises
becomes a pressing agenda.
Different definitions have been coined for
competitiveness in SMEs. This includes the extent
of innovation processes [49], effective knowledge
management (KM) practices [20], degree of strategy
formulation [50], and applying cluster-based policy
approach [31]. This paper proposes an approach for
competitiveness in SMEs. It suggests that obtaining
a sustainable competitive advantage requires a
setting that is based on knowledge quality (KQ).
Further, competitiveness in SMEs is gauged through
the extent of creativity (improvisational and
compositional) and innovation.
A recent research has recognized the importance
of KQ [57]. KQ was initially defined as the
usefulness and innovativeness of acquired
knowledge [51]. In addition, Yoo et al. [56]
consider KQ as “the extent to which the awareness
and understanding of ideas, logics, relationships,
and circumstances are fit for use, relevant and
valuable to context, and easy to adapt”.
The recent years witness the concept of
knowledge quality synthesized along with data and
information. The literature has shown the
influencing role of data quality and information
quality on overall performance and throughput of
organizations [55, 24]. It has been argued that the
mere utilization of KM and its systems is not
sufficient for being creative and prosperous in this
turbulent market [44]. However, it comes to the
quality or high standard of knowledge that is
essential for the survival of businesses.
KQ is a new concept. There are few researches
on KQ in the context of SMEs. Previous researches
focused on data quality and information quality. The
benefits that can be obtained by virtue of KQ are
apparent in SMEs. SMEs as enablers of innovation
can benefit from a high standard of KQ due to their
agility and flexibility, which give them an advantage
over big enterprises. Durst & Edvardsson [19] argue
that research on KM and its quality is
overemphasized on large enterprises and researchers
neglect SMEs.
Since the concept of KQ is multidisciplinary, all
organizational and behavioral factors should be
examined in detail. Little attention has been devoted
to KQ and this paper aims to investigate the
dimensions, antecedents, and impacts of KQ. In
doing so, it develops a conceptual framework to aid
future research and practice.
Mathematics and Computers in Contemporary Science
ISBN: 978-960-474-356-8 188
2 Research Design
This research is based on a review of literature.
Therefore, the research questions are set out as
follows:
RQ1: What are the dimensions of KQ?
RQ2: What are the antecedents of KQ?
RQ3: What are the impacts of KQ?
Our starting point to answer the research
questions was the online databases. In particular, we
used Science Direct, Emerald, Ebscohost, Springer,
and Proquest as a means to search for related
articles.
The main keywords used for this research are
data quality, information quality, knowledge quality,
absorptive capacity, functional diversity, openness,
organizational structure, organizational culture,
technology, sense making, knowledge management,
organizational creativity, improvisational creativity,
compositional creativity, and innovation. Following
an extensive review of the literature, we then
developed a set of propositions, which resulted into
a conceptual framework.
3 Problem Solution
In this paper, the competitiveness of SMEs is
characterized by creativity and innovation. This is
influenced by KQ. In gaining insights into KQ in
SMEs, its antecedents and substructures [57] will be
examined.
3.1 Related theories
According to Dervin [16, 17], sense making takes
place when “a person embedded in a particular
context and moving through time-space, experiences
a gap in reality”. To encounter this gap, the person
forms ideas, thoughts, emotions, feelings, and
memories.
Duffy [18] defined sense making as “the way
people make sense out of their experience in the
world”. At the individual level, sense making is
about how a person understands a situation in a
given context [45].
Besides, sense making concerns knowledge
management [15]. In this regard, sense making is
the process of transformation of information to
knowledge product [47]. According to Dervin [15],
the basic concepts related to sense making
methodology are “time, space, movement, gap, step-
taking, action, situation, bridge, and outcome”.
Further, three prominent elements in sense making
are generic understanding, specific situation, and
action [16].
According to Yoo [57], employees in an
organization realize the intrinsic value of knowledge
(generic understanding) and come out with a new
meaning in their context (specific situation) and
based on that they take actions. And they make the
knowledge available for further sense making
processes. Therefore, there are four substructures of
KQ i.e. intrinsic KQ, contextual KQ, actionable KQ,
and accessibility KQ.
Chan and Chao [10] develop a model of KM for
SMEs and they theorize that structure, culture, and
technology are the main factors in obtaining high
standard of knowledge activities. Yoo et al. [56]
develops a model of KQ within which functional
diversity, absorptive capacity, and openness are
considered as main determinants to KQ. Amabile [1,
2] theorized on creativity and examined factors
participating in improvisational creativity include
culture, structure, and expertise (functional
diversity). In addition, sense-making theory [16]
provides a framework for understanding perceived
KQ and its substructures.
3.2 Dimensions of KQ
Considering that data quality shares similar
dimensions with information quality [55, 26, 24],
however, it is believed that some of characteristics
of information quality are similar to KQ as well
[56]. Previous researches examined intrinsic KQ,
contextual KQ, and actionable KQ as dimensions or
substructures of KQ [56, 90]. In this paper it is
speculated that accessibility KQ is another
significant dimension of KQ that needs to be
elaborated.
3.2.1 Intrinsic KQ
Intrinsic KQ implies that knowledge has quality by
virtue of itself. A foundation of KQ [56], intrinsic
KQ relates to accuracy, timeliness, and reliability
[22] of knowledge. Yoo [56] identifies perceived
intrinsic KQ as a substructure of perceived KQ and
he declares that this dimension is mainly affected by
knowledge sharing behavior of social actors.
3.2.2 Contextual KQ
Contextual KQ considers the knowledge that is
associated with the context of the task at hand.
Relevance, value-added, and appropriateness are the
attributes of contextual KQ. The intrinsic value of
knowledge brings an understanding to individuals to
Mathematics and Computers in Contemporary Science
ISBN: 978-960-474-356-8 189
come out with cues and new understanding based on
a specific situation or circumstances (perceived
contextual KQ).
3.2.3 Actionable KQ
Actionable KQ refers to the knowledge that brings
progress and it is the practical perspective [57] of
knowledge. According to Yoo et al [56], actionable
KQ refers to the extent to which knowledge is
expandable, adaptable, or simply applied to tasks.
Based on the sense making theory, after individuals
come to an understanding based on the intrinsic
value of knowledge in a particular situation, they
take actions (actionable KQ) to apply the
knowledge.
3.2.4 Accessibility KQ
Accessibility KQ refers to the degree of system
availability, degree of flexibility, ease of use, and
ease of access. These characteristics of accessibility
KQ are adopted from information quality and in
terms of KQ the concept of accessibility refers to
both tacit and explicit availability of knowledge.
Lee et al [36] consider these attributes as usability
of information. To rationalize accessibility KQ, after
the knowledge is applied it has to be accessible to be
continuously in use both through explicit and
implicit way.
Accessibility of knowledge can be another step
in the determination of perceived KQ. While the
knowledge is applied (in both tacit and explicit
phase), it has to be accessible for further sense
making processes. Sense making does not have a
clear beginning and ending point [33] and it is a
waterfall model of cognition. Therefore,
accessibility KQ is another phase of perceived KQ
that can be speculated by virtue of sense making
theory. Finally, it is proposed that:
P1: KQ is a second order factor model of intrinsic
KQ, contextual KQ, actionable KQ, and
accessibility KQ.
3.3 Antecedents of KQ
This paper proposes antecedents of KQ as
absorptive capacity, functional diversity, openness,
organizational structure, organizational culture, and
technology. Each of them is discussed in the
following sub-sections.
3.3.1 Functional diversity
Functional diversity refers to the degree of hiring
employees with different skills and expertise who
are adept with business processes [9]. It is argued
that SMEs with employees with different
professional backgrounds and skills will be more
innovative than those with similar knowledge pool.
A functionally diverse company brings differing
perspectives [46] and divergence of views on issues
and tasks at hand. Divergence of views amongst
employees will create multiple perspectives that will
be imperative for innovative processes [6]. Finally,
it is proposed that:
P2: There is a positive relationship between
functional diversity and KQ in SMEs.
3.3.2 Absorptive capacity
Absorptive capacity refers to the learning capability
of the company and it has been found as a
requirement of KQ in project teams [56]. By virtue
of learning economy, the traditional paradigm of
innovation (closed innovation) has shifted to the
effective paradigm of innovation (open innovation).
Kazanjian & Drazin [32] state the role of
individuals’ learning on creative processes. They
indicate that different learning strategies
(explorative learning strategy and exploitative
learning strategy) will have a significant role in
exploiting existing knowledge and importing new
knowledge to the company, thereby facilitating the
innovative capability of employees. It can be
concluded that advanced learning have a direct
effect on high standard of KQ. Therefore, it is
proposed that:
P3: There is a positive relationship between
absorptive capacity and KQ in SMEs.
3.3.3 Openness
Openness refers to the capability to take advantage
of external knowledge (from external environment
such as customers, competitors, suppliers and
government agencies) and integrate it with internal
knowledge. Soo et al. [51] consider openness as a
significant determinant of KQ. Yoo et al. [56]
consider this organizational characteristic as
knowledge network and they suggest that a high
level of knowledge network in project teams results
in a high level of KQ. Recent researches have
combined the concept of KM and complex networks
[8] and researchers consider knowledge network as
knowledge transfer between individuals or
Mathematics and Computers in Contemporary Science
ISBN: 978-960-474-356-8 190
enterprises [12], knowledge cooperation, and
knowledge innovation [29, 38].
Prior research suggests that complimentary
knowledge resources are made available through
knowledge networks [29, 30]. In a networked
economy, each node stands for a special repository
of knowledge (SMEs and external environment) and
each link stands for economic and strategic ties
between the nodes that enable knowledge flow
between them. Therefore, it is proposed that:
P4: There is a positive relationship between
openness and KQ in SMEs.
3.3.4 Structure
Organizational structure is considered as an
antecedent in knowledge and creativity processes
[40, 28]. An organization with leaner structure is
likely to have KQ. According to Ekvall [21],
different structures foster or hinder creativity
processes (i.e. improvisational and compositional
creativity). This suggests that the leaner an
organization or company is, the greater the degree
of prosperity and the higher potential it has for
being creative.
Further, an organization with a lean structure
(ambidextrous) enables both explorative (new
knowledge absorption) and exploitative (utilization
of existing knowledge) capabilities. This can be
argued to facilitate sense making processes and new
understandings. This in turn contributes to higher
KQ that affect improvisational and compositional
creativity and innovativeness. Therefore, it is
proposed that:
P5: There is a positive relationship between
structure and KQ in SMEs.
3.3.5 Culture
An organization with high KQ is characterized by
risk taking, shared responsibility, employees’
participation, and innovation organization culture
[34]. Ekvall [21] suggests that strict and structured
culture impedes radical creativity. Prior research has
examined the role of organizational culture on KM
activities [10, 35, 52].
Organizational culture is known to influence KM
effectiveness and an enabler in competitive
advantage [5]. Ferris et al. [23] suggested the role of
organizational culture as an antecedent of
employees’ behavior and attitude. A friendly
organizational culture will have a significant effect
on the sense making processes of employees from
which a high standard of KQ will be achieved.
Lemon and Sabota [37] regard organizational
culture as a primary determinant of innovative
capabilities. They defined culture as “the way we do
things around here”. Culture contributes to
collective understandings of work. It helps
employees apply current and new understandings to
different contexts and take actions and make the
knowledge available for further sense making
activities. Therefore, innovation culture [27] enables
higher level of KQ through sense making resulting
in creativity and innovation. Finally, it is proposed
that:
P6: There is a positive relationship between culture
and KQ in SMEs.
3.3.6 Technology
Another building block of KQ is technology. It is
considered as a support mechanism of KM activities
[14]. Technology utilization directly and indirectly
contributes to the achievement of KQ. Technology
facilitates knowledge sharing and it helps sense
making activities from which new understanding
about product, service, or a problem can be achieved
and applied in a particular context. It makes the
knowledge accessible for further sense making
processes. Further, for the sake of generating
creative ideas, the available knowledge has to
become accessible (accessibility KQ) and this
process may be eased by technology utilization.
Therefore, it is proposed that:
P7: There is a positive relationship between
technology utilization and KQ in SMEs.
3.4 Impacts of KQ
Previous researches demonstrated the significant
role of KQ on firm performance and innovation [51,
56]. In this paper it is posited that KQ has a direct
relationship with creativity. The term creativity has
been referred to as the production of ideas for novel
and appropriate products, services, processes, or
strategies [2, 25, 48]. There are two types of
creativity: compositional and improvisational which
are distinguished based on the degree of novelty and
the role of time [3, 41, 54].
Organizational theorists have been examining the
role of improvisation within organizations [54]. A
high degree of improvisation takes place in SMEs
because of their agile and flexible capabilities.
Indeed, both compositional and improvisational
creativity can generate novel products and outcomes
[2]. In improvisational creativity, response
generation and execution (toward product, service,
or design) is simultaneous and convergent in time
but in compositional creativity, there is a temporal
separation between when a response is generated
Mathematics and Computers in Contemporary Science
ISBN: 978-960-474-356-8 191
and when it is executed [13]. Therefore, it is
proposed that:
P8: There is a positive relationship between KQ and
improvisational creativity.
P9: There is a positive relationship between KQ and
compositional creativity.
P10: There is a positive relationship between KQ
and innovation.
In addition, innovation originates from creativity
[58] and it takes place when creative acts are
executed. The links between improvisational
creativity, compositional creativity, and innovation
[3,11, 13] are as shown in Fig. 1 and are based on
the theory of music [4] and art that may be applied
to organizations as well. On the other hand, Vera
and Crossan [54] argue that all improvisational
creativity processes do not lead to innovation and it
is likely that a high degree of novelty (different
from prior actions and plans) diverges from the
objectives and missions of businesses and it can lead
to failure.
Amabile [1, 2] proposed a model of
improvisational creativity within which she
identified elements that contribute to organizational
improvisational creativity. She considered
experimental culture, minimal structure, expertise,
intrinsic motivation, and creativity relevant
processes as elements that precede improvisational
creativity processes. Many compositional creativity
processes come from moments of improvisational
creativity [53] and both of these capabilities are
conducive to innovation. Therefore, it is proposed
that:
P11: Improvisational creativity and compositional
creativity are positively correlated.
P12: There is a positive correlation between
compositional creativity and innovation.
P13: There is a positive correlation between
improvisational creativity and innovation.
4 Conclusion
Based on the discussion, a conceptual framework
(Fig. 1) is proposed.
Fig. 1: Conceptual framework
High level of KQ leads to a competitive SME.
The framework suggests that SMEs with high KQ
are characterized by functional diversity, absorptive
capacity, openness/knowledge network, culture,
structure, and technology.
4.1 Theoretical and Practical Contributions
From a theoretical point of view, this paper has
proposed an enhanced definition of SMEs’
competitiveness. This covers improvisational and
compositional creativity and innovation.
Further, KQ is proposed to contribute to
competitiveness. KQ comprises intrinsic,
contextual, actionable and accessibility KQ. While
prior researches have given significant attention to
intrinsic, contextual and actionable knowledge, this
research has added another dimension of KQ
(accessibility KQ).
This research is different from other researches
on KQ in that it has examined potential antecedents
of KQ. Functional diversity, absorptive capacity,
openness, lean structure, friendly organizational
culture, and technology utilization are proposed as
antecedents of KQ. This brought about a conceptual
framework of KQ, its antecedents and impacts.
From a practical stand-point, entrepreneurs and
SMEs business owners may use this framework to
relate their competitiveness to KQ and its
antecedents. The framework may provide a starting
point to explain the characteristics of
competitiveness, reflect on KQ and clarify
antecedents of KQ.
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