Organizational Culture and Knowledge Management Success at Project and Organizational Levels in Contracting Firms

Abstract

DOI: 10.1061/(ASCE)CO.1943-7862.0000106 This research focuses on contracting firms within the construction sector. It characterizes and evaluates the composition of organizational culture using four culture types (clan, adhocracy, market, and hierarchy), the strategic approach for knowledge flow, and the success of knowledge management (KM) systems at different hierarchical levels of contracting organizations (project and parent organization level). Responses from managers of local or overseas contracting firms operating in Hong Kong were collected using a carefully constructed questionnaire survey that was distributed through electronic mail. The organizational value is analyzed in terms of the four cultural models. Clan culture is found to be the most popular at both project and organization levels, which means that the culture of contracting firms very much depends on honest communication, respect for people, trust, and cohesive relationships. On the other hand, hierarchy culture, which focuses on stability and continuity, and analysis and control, seems to be the least favored at both levels. Another significant finding was that the two main KM strategies for knowledge flow, codification and personalization, were employed at both project and organization levels in equal proportion. This indicates that successful KM efforts at both enterprise levels utilize a hybrid and balanced approach for their knowledge flow, and that they complement each other. The findings also revealed that knowledge management system success factors emphasize the support of the management level. The results show that KM is critical and beneficial as indicated by 64% at the project and 74% at the organization level. The expectation is higher for organizations as they are the organizational memories in which experiences of past projects are archived and connected. Understanding these factors and the relationships among them has been demonstrated to be critical in order to increase the chances of success or to help with making decisions when applying KM. Author name used in this publication: Patrick S. W. Fong

Full text

Organizational Culture and Knowledge Management
Success at Project and Organizational Levels
in Contracting Firms
Patrick S. W. Fong1and Cecilia W. C. Kwok2
Abstract: This research focuses on contracting firms within the construction sector. It characterizes and evaluates the composition of
organizational culture using four culture types 共clan, adhocracy, market, and hierarchy兲, the strategic approach for knowledge flow, and the
success of knowledge management 共KM兲systems at different hierarchical levels of contracting organizations 共project and parent organi-
zation level兲. Responses from managers of local or overseas contracting firms operating in Hong Kong were collected using a carefully
constructed questionnaire survey that was distributed through electronic mail. The organizational value is analyzed in terms of the four
cultural models. Clan culture is found to be the most popular at both project and organization levels, which means that the culture of
contracting firms very much depends on honest communication, respect for people, trust, and cohesive relationships. On the other hand,
hierarchy culture, which focuses on stability and continuity, and analysis and control, seems to be the least favored at both levels. Another
significant finding was that the two main KM strategies for knowledge flow, codification and personalization, were employed at both
project and organization levels in equal proportion. This indicates that successful KM efforts at both enterprise levels utilize a hybrid and
balanced approach for their knowledge flow, and that they complement each other. The findings also revealed that knowledge management
system success factors emphasize the support of the management level. The results show that KM is critical and beneficial as indicated
by 64% at the project and 74% at the organization level. The expectation is higher for organizations as they are the organizational
memories in which experiences of past projects are archived and connected. Understanding these factors and the relationships among them
has been demonstrated to be critical in order to increase the chances of success or to help with making decisions when applying KM.
DOI: 10.1061/共ASCE兲CO.1943-7862.0000106
CE Database subject headings: Construction companies; Contractors; Organizations; Construction management; Knowledge-based
systems; Decision making.
Introduction
In today’s competitive and dynamic business environment,
knowledge becomes an important asset of organizations. Effective
knowledge management 共KM兲provides the capacity to engineer
an organization’s formal and informal structure, functions and
processes to formalize and leverage its intellectual assets. There is
an emerging need in the construction sector to effectively imple-
ment KM systems 共KMSs兲with the aim of transcending bound-
aries for the purpose of disseminating essential knowledge
throughout projects, teams, and organizations 共Carrillo et al.
2004; Love et al. 2005兲. However, for KM to be truly effective
and successful requires more than new technologies alone; it re-
quires understanding and the integration of its human aspects, as
well as the right culture to operate 共Davenport et al. 1998;
Shand 1998兲.
Knowledge is an important asset for all companies. With the
rapidly changing environment and the increase in competition, it
is important to manage knowledge properly in the construction
industry. As in other countries, Hong Kong’s construction indus-
try is labor-intensive and relies heavily on practice and experi-
ence. For this reason, the construction industry contains large
amounts of knowledge. On top of this, the dynamic environment
and the implementation of advanced technologies result in a vast
pool of knowledge. Therefore, good KM would probably benefit
the exchange and reuse of knowledge in the short-term and inno-
vation in the long run 共Prusak 1998兲.
KM is not something entirely new, as knowledge has existed
throughout time. Organizations have always used different knowl-
edge practices to produce goods and services; people do share
knowledge but the extent of sharing is informal and not system-
atic. It very much depends on individuals and their personal net-
works. However, sometimes employees lack motivation or have
no channels through which to share. As a result, their knowledge
disappears once they leave a company. With the application of
KM, knowledge would hopefully be more securely managed.
The construction industry is a project-based industry. People
from different departments, professions, or companies gather as a
team to complete a project. The duration of a project may be from
several months to years. Upon the completion of the project, this
temporary group is disbanded and may never work together on
other projects 共Love et al. 2005兲. Knowledge is created during a
project, but the pool of knowledge is lost if there are no effective
1Associate Professor, Dept. of Building and Real Estate, The Hong
Kong Polytechnic Univ., Hung Hom, Kowloon, Hong Kong 共correspond-
ing author兲. E-mail: bspafong@polyu.edu.hk
2Dept. of Building and Real Estate, The Hong Kong Polytechnic
Univ., Hung Hom, Kowloon, Hong Kong.
Note. This manuscript was submitted on June 2, 2008; approved on
June 22, 2009; published online on June 25, 2009. Discussion period
open until May 1, 2010; separate discussions must be submitted for indi-
vidual papers. This paper is part of the Journal of Construction Engi-
neering and Management, Vol. 135, No. 12, December 1, 2009.
©ASCE, ISSN 0733-9364/2009/12-1348–1356/$25.00.
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ways of managing it. By the same token, knowledge cannot be
reused if there is no proper channel for transferring it from one
project to another.
Knowledge sharing across projects is equally important be-
cause knowledge transfers from a current to a concurrent or future
project allow people to use existing proven knowledge to solve
problems instead of generating knowledge anew, which can con-
sume time 共Fernie et al. 2003; Love et al. 2005兲. Overall effi-
ciency is thereby increased, and project expenditures can be
lowered. Critical factors for the success or failure of a project can
also be shared as lessons learned or postproject reviews. This is
especially crucial to contractors, as they are now operating in a
highly competitive environment. Effective KM would definitely
improve the competitiveness of an organization.
The composition of a contractor firm includes the organization
itself and projects. There is no doubt that they are both equally
important to an organization. Therefore, the implementation of
KM at these two levels is investigated. This research aims to: 共1兲
identify the organizational values and cultural composition of
contracting organizations; 共2兲recognize the strategic approach of
knowledge flow; and 共3兲evaluate the degree of KM success at the
project and organization levels.
Concept of Knowledge Management
KM emerged from the world of academia in the 1990s and has
become a hot issue, especially for business and technology lead-
ers 共Frappaolo 2002兲. The motivation for actively engaging in
KM is to improve employees’ decision-making and productivity
共Koenig 2002兲. The concept of KM is nothing new, but the ter-
minology is new. The exact definition of KM is difficult to clarify
and is still the subject of an ongoing debate. There are a number
of definitions of KM. For example, Frappaolo 共2002兲identifies
KM as the leveraging of collective wisdom to increase respon-
siveness and innovation, also emphasizing the reuse of experience
and practices. Cong and Pandya 共2003兲mentioned that KM has
three basic elements: people, process, and technology. Among
these three elements, the percentage of effort put in is around 70,
20, and 10%. According to Palmer and Platt 共2005兲, there are five
stages of KM: horizon scanning, awareness, understanding,
implementation, and monitoring. Though knowledge has to be
managed, this does not imply that the objective of KM is to man-
age all knowledge. Instead, it is to manage knowledge that is the
most essential to an organization, whether it be tacit or explicit.
Many people may consider information technology 共IT兲as
KM. However, the equal sign should not put between IT and KM.
IT is an enabler of KM, and has undoubtedly engendered a revo-
lution in KM 共Marwick 2001兲. KM is something more than IT: a
good database system for knowledge storage is not enough, rather
the critical point is the high accessibility to acquire knowledge
共Chait 2000兲. IT is effective in the transfer of articles, documents,
or data, but in certain circumstances the effectiveness increases if
the transfer of knowledge is undertaken verbally, because interac-
tion speeds up the rate of knowledge delivery and receiving.
From the beginning, it is stressed that contracting firms have a
pool of knowledge that needed to be managed: knowledge in
advanced machinery and technologies, the experiences of person-
nel involved in a project, the properties of different construction
materials, or products and lessons learned as a result of managing
a project.
Models of Organizational Culture
Cameron and Quinn 共1999兲developed a widely adopted organi-
zational cultural framework. Organizational culture is an organi-
zation’s values, assumptions, and expectations 共Hooijberg and
Petrock 1993兲. It serves as a filter through which strategies are
decided and performance results 共Saint-Onge 2002兲. Four models
of culture are determined through an organizational culture as-
sessment instrument 共OCAI兲共O’Neill and Quinn 1993兲. The
OCAI approach uses two sets of questionnaires to assess current
and ideal organizational values in six essential dimensions of cul-
ture respectively. The International Council for Research and In-
novation in Building and Construction has conducted the “OCAI-
questionnaire” worldwide, including in Hong Kong, to evaluate
cultures in construction processes 共Tijhuis 2005兲. The four models
of culture are hierarchy, market, clan, and adhocracy.
Hierarchy culture is considered as the earliest approach, rec-
ognized by a formalized and structured working place 共Cameron
and Quinn 1999兲. This culture emphasizes internal issues and
intends to provide a stable environment to increase productivity,
or to generate efficient and reliable products by setting up rules,
policy, or specialization. Market culture focuses on management
of external affairs. This is regarded as a results-oriented and
customer-based culture. It contributes to organizational effective-
ness and operates as a market. Clan culture is about people and
sharing between individuals. This organizational culture concen-
trates on teamwork, loyalty, commitment, and participation of
employees. It ultimately helps human resources development. Ad-
hocracy culture is dynamic and creative. This culture has a higher
ability to assume risk and encourages employees’ initiative and
innovation. The organization likes to have unique products and
aims at seeking new resources.
Knowledge Management Strategies
The purpose of having KM strategies is to improve an organiza-
tion’s competitiveness 共Bellaver and Lusa 2002兲. Implementation
of KM has to be delivered through a number of tools, for ex-
ample, research collaboration, conferences, seminars, personal in-
teraction, job rotation, the Internet, etc. The final strategy should
reflect a company’s competitive strategy and is usually decided by
the top management. The two kinds of KM strategy are codifica-
tion and personalization 共Koenig 2001a兲. Codification strategy
represents knowledge that is stored in database systems. It con-
nects people with information 共Palmer and Platt 2005兲. Codifica-
tion formalizes an organization’s knowledge for a broad scale of
utilization and requires abundant implementation of technology.
As a result, anyone in the company is able to access and use the
knowledge easily. It is especially suitable for managing explicit
knowledge. Personalization strategy characterizes the situation
where the knowledge of an organization is mainly stored in peo-
ple’s brains, and the sharing channel relies heavily on human
interaction. Unlike codification, personalization focuses on person
to person transfer; technology becomes an instrument for commu-
nicating, not gathering knowledge. Transfer of tacit knowledge is
more often done using this strategy. The organization is therefore
required to invest greatly in its people network 共Foray and Gault
2003兲. Both strategies can coexist and the proportion of the two
approaches depends on the nature and function of different units
under the parent organizations. Hansen et al. 共1999兲suggested
that an 80-20 split should be followed in deciding strategy, that is
one approach should account for 80% of the KM strategy, with
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the other one occupying 20% as a support for the major one. They
claimed that most organizations follow the 80-20 split, and the
attempt to excel in both strategies will fail. Koenig 共2001b兲ques-
tioned the 80-20 distinction. He argued that a 50-50 mix does not
necessarily cause failure. His research found that a successful
company places equal emphasis on both codification and person-
alization. Instead, the best balance point should be within the
20-80 or 80-20 range.
Critical Success Factors for KM Practice
Hariharan and Cellular 共2005兲suggest the “four pillars” of KM
critical success factors. The first type is leadership, people, and
culture; the second is KM processes and technology; the third is
relevance to business and objectives; and the last is measurement
of KM.
Koenig 共2002兲pointed out that the effect of KM should be
justified by differences in people’s behavior after applying KM,
therefore measuring performance is an indicator of success. Cong
and Pandya 共2003兲point out that successful KM practice not only
contributes to the awareness and support from managers, but
should also raise the awareness and support of staff. The effec-
tiveness of KM can be evaluated through staff involvement and
motivation in projects. The greater the staff involvement, the
greater the potential for knowledge transfer. Second, the ability to
consolidate learning from a previous project is crucial. The prob-
lem in the construction industry is that employees usually have no
time to share and evaluate before going on to the next project
共Palmer and Platt 2005兲. If more time were spared between
projects, individuals would have more time to combine, collabo-
rate, and reflect on knowledge obtained from the last project,
resulting in a higher quality of knowledge sharing 共Fernie et al.
2003; Love et al. 2005兲.
Knowledge Transfer between Projects and the Parent
Organization
The nature of knowledge keeps changing. Tacit and explicit
knowledge are transferred constantly between projects and parent
organizations 共Love et al. 2005兲. Fig. 1 presents the relationships
between a parent organization and several projects, showing the
cyclical transfer and reuse of knowledge between the parent or-
ganization and projects, as well as the transfer between projects
through the organizational memory.
There are three main types of knowledge that result from
project-based working: 共a兲knowledge in projects; 共b兲knowledge
about projects; and 共3兲knowledge from projects 共Love et al.
2005兲. “Knowledge in projects” is that knowledge which resides
in a project in the form of documentations, meeting repository,
discussions, and project management system. “Knowledge about
projects” is knowledge that is required for executing a project.
This knowledge includes project organization design, designing,
planning and controlling, project marketing, and skills manage-
ment. Knowledge about end products or materials that satisfies
competing requirements and constraints is under this category as
well. “Knowledge from projects” is the experiences archived
from executing a project. This is in the form of best practices,
lessons learned, postproject reviews, or after-action reviews. Un-
fortunately not a great deal of time is spent on the latter, as people
are pulled out from a project before it is actually completed, re-
sulting in valuable lessons from the project not being recorded
and therefore being lost 共Koenig and Srikantaiah 2004兲. In some
cases, the lessons are collected too late or are forgotten when the
review is only carried out at the end of a project.
KM in the construction industry should include the reuse of
knowledge within 共intraproject兲and across 共interproject兲projects,
and conserving it 共Love et al. 2005兲. According to Kamara et al.
共2005兲, the sharing of knowledge in a project takes place at three
levels: 共a兲the transfer/sharing of knowledge between different
professionals involved in each phase of a project; 共2兲the transfer/
sharing of knowledge between different professionals involved in
different stages of a project; and 共3兲the mutual transfer of knowl-
edge from a project to the organizational knowledge base of each
firm involved in a project.
Kamara et al. 共2005兲suggest that cross-project KM is not ex-
plicitly undertaken, even if companies identify this problem. In
order to manage cross-project KM, companies need to identify
the high-grade or core knowledge and make it as explicit as pos-
sible. In addition, they mention that successful transfer of knowl-
edge between different projects depends on the way knowledge is
captured and codified. Since people are always treated as the key
resources of any organization, they play an important role in
knowledge transfer. It is assumed that the acquired knowledge of
one project can be transferred through individuals when they are
reassigned to other projects 共Love et al. 2005兲. This approach can
also be reflected in job rotation, as well as mentoring for junior
staff.
Research Methodology
The research was conducted by questionnaire survey. The ques-
tionnaire was the most appropriate data source for this research.
The reason for using a questionnaire was to investigate the gen-
eral situations and applications of KM in contracting firms. A
generalized picture of the situations was planned from the survey
instead of in-depth purposeful studies. From the responses and
background information given, we are able to evaluate KM prac-
tices at both project and organizational levels in contracting firms.
The questionnaire included four sections. The distribution method
used was e-mail, as it is an environmentally friendly and cost-
effective approach, as well as a speedy way of delivering and
reminding respondents about the survey.
The questionnaire was finally sent to managers at different
PROJECT
(Project Memory)
PROJECT
Pro
j
ect Team
Project Team
PROJECT
Project Team
Project Knowledge
(Current)
Project Knowledge
(Past and Current)
Project Knowledge
Project Knowledge
Project-based organization
(Organizational memory
of past and current projects)
Fig. 1. Relationships between projects, project teams and parent or-
ganization
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local contracting firms. Project managers and other management
levels were invited to participate in this research study, as the
implementation of KM ultimately requires support from top or
senior managers, and they are considered as the group with the
best knowledge about their organizations and projects.
The first step of the survey method was compiling a contact
list of project managers from among graduates of the department,
current part-time students, or students who had previously worked
or were currently working in construction firms. An invitation
was then sent via e-mail, with an invitation letter and question-
naire as attachments. Once the target respondents had completed
the questionnaire, they were asked to send the attachment back
via e-mail. There were 205 e-mails sent in total, but 11 of them
bounced back because the individuals were on leave or the orga-
nization’s security system screened out the invitation.
The design of the questionnaire was based on a review of the
existing literature, as well as making reference to some KM ques-
tionnaires available on the Internet. The questionnaire was orga-
nized in 6 pages. Although it was rather long, the questions were
straightforward and it took about 20 min to complete. The re-
search questions were investigated from two perspectives: that of
the project and that of the organization. Projects meant construc-
tion projects that the respondents were working on at that mo-
ment, while organizations indicated the parent organizations
employing the respondents. The purpose of such direction was to
determine the differences and similarities in KM applications at
these two levels. The questionnaire was divided into four sections
as described below.
Section A: Organizational Value
Eleven items were included in Section A: honest communication,
goal achievement, getting the job done, innovation, respect for
people, trying new concepts, trust, outcome excellence, analysis
and control, stability and continuity, and cohesive relationship.
Participants were required to answer questions on a 5-point scale,
with 1 being strongly disagree and 5 as strongly agree.
Section B: Knowledge Flow
Section B requested respondents to provide information regarding
their usual practice in knowledge flow at the project and organi-
zation levels. The definition of the term knowledge flow was
adopted from a KM and IT encyclopedia and Palmer and Platt
共2005兲. Responses were measured on a 5-point scale where 5
equaled to a minimal extent and 1 to a very great extent. An
additional option of “0” signified that the respondent did not
know the answer. This was included because it was preferable to
have respondents opt for “do not know” than blind guessing.
Section C: Knowledge Management
Section C identified respondents’ perceptions on KM and KMS,
i.e., to what extent the respondent believed that KM is important
and how far their project and organization have implemented
KMS. The definitions of KM and KMS were stated in the ques-
tionnaire for the purpose of giving a more precise instruction to
participants. Questions evaluated the success of KMS in several
directions by scoring different statements. The 5-point scale ap-
plied for KMS success was the same as that for knowledge flow
in the previous section.
Section D: Participant Profile
Participant profile was included at the end of the questionnaire.
Basic information such as job title, size of organization, and years
of work experience was collected. Filling in the name of the or-
ganization was optional out of respect for participants and in
order to safeguard their privacy.
In this research, basic descriptive statistics are used, e.g., fre-
quencies and means. SPSS 12.0 also helps to process data by
selecting cases, for example, to interpret results in terms of dif-
ferent respondents’ experience.
Research Results and Analysis
Two hundred and five e-mails were sent to the target population,
i.e., managers at different contracting firms. Eleven e-mails were
immediately returned because 共1兲the target respondent was on
leave; 共2兲there was an automatic delivery failure; or 共3兲the
e-mail address was invalid. A total of 194 e-mails were success-
fully sent to target respondents. 139 completed questionnaires
were received. The response rate was calculated as 71.6%, which
is a very satisfactory result.
Participants’ Profile
Of the completed questionnaires received, 90% of the respondents
were at managerial level 共e.g., director or manager grades兲. The
remainder held positions such as project coordinators, engineers,
or foremen. Some did not specify the names of their organiza-
tions, therefore the distribution of companies’ participation could
not be counted. In terms of total work experience in the construc-
tion industry, 23% had less than 10 years’ experience, 38% had
between 10 to 20 years’ experience, and the remaining 39% had
over 20 years of experience. As for length of service in their
current organizations, 72% had less than 10 years, 18% had been
with the same firm for between 10 and 20 years, and the remain-
ing 10% had over 20 years’ experience in their current organiza-
tions. The respondents were generally experienced practitioners in
the construction industry.
Organizational Value
From Table 1, the mean scores of organizational value at project
level ranged from 3.33 to 4.38 on a 5-point scale 共3 being neu-
tral兲. These scores show that the general project value is relatively
high. The top four project values in ascending order are getting
the job done,honest communication,trust, and goal achievement.
These four values obtained scores over 3.90. Conversely, the top
five organizational values in ascending order are honest commu-
nication 共mean=4.33兲,getting the job done,goal achievement,
trust, and cohesive relationship, which are very similar to the
project values. Two of the top three organizational values are the
same as the project values, indicating that the core values in
projects and organizations are connected and are very similar.
However, the mean scores of organizational value ranged from
3.26 to 4.33. This was comparatively lower than for project
values.
The three core values, honest communication,getting the job
done, and trust can be assumed as the cultural strength in both
projects and organizations. KM does not work without trust
共Koenig 2002兲. As the research results reveal, trust is an impor-
tant value; with trust, KM is made possible in the construction
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industry. As described before, the average mean values are higher
in projects. This can be explained by the nature of the construc-
tion industry, where, in a project, members of different profes-
sions work closely together. The relationships between members
are closer in projects than in organizations because they have
clear goals behind them; the goals of the team are to coordinate
well and get the job done. Only honest communication between
members and trust in each other’s professionalism will allow
them to achieve these goals.
The great difference between project and organizational values
is in trying new concepts, which ranks 9 for project value
共mean=3.56兲but 7 for organization value 共mean =3.64兲. This is
understandable, because the principle value in a project is getting
the job done on a tight schedule and in spite of the multiple
problems faced on site each day. There is relatively little extra
effort required to try a new concept or innovation. Innovation and
trying new concepts is not something that can be executed instan-
taneously; these approaches require support from the organization
because ultimately the project is only a sublayer within the orga-
nization. The resources and decision to be innovative, organiza-
tional value, and strategies are strong elements that determine the
value of a project. From the perspective of organizational value,
innovation and trying new concepts are more popular than in
projects, ranking middle, 6, and 7 out of the total 11 values.
Innovation is now regarded as a key success factor for an orga-
nization, and creative ideas are seen as a strong parameter for an
organization’s competitiveness.
Cultural Composition Analysis
The OCAI tool was employed to determine the four culture con-
structs. This tool has been successfully used in several large or-
ganizational culture research studies, including those of
Yeung et al. 共1991兲and Quinn and Spreitzer 共1991兲. In both of
these studies, the reliability of the OCAI tool created confidence
that the results produced exceed the reliability of the most com-
monly used instruments in the social and organizational sciences
共Cameron and Quinn 1999兲. However, to further assess the inter-
nal consistency for this current study, the coefficient ␣reliability
estimates of the four culture type constructs were calculated and
are reported in Tables 2 and 3.
Table 4 shows which core values contribute to which culture
type. Tables 2 and 3 demonstrate the results after taking the av-
erage means of each culture type. The comparison of mean score
by the four culture types reveals an interesting phenomenon. The
total received score is very close between the two enterprise lev-
els, which suggest that the values to either project or organization
are similar, and the difference is only in the composition of cul-
ture. Clan culture is the dominant value applied in both projects
and organizations, while hierarchy culture is the least often ap-
plied. The market culture is more popular in projects than in
organizations, whereas the adhocracy culture is more common in
organizations than projects.
The mean difference between the clan and market cultures in
projects is 0.01. This implies that both clan and market cultures
Table 1. Mean Scores and Rankings of Organizational Value in Projects and Organizations
Value Mean 共project兲Standard deviation Rank Mean 共organization兲Standard deviation Rank
Getting the job done 4.38 0.747 1 3.87 0.894 2
Honest communication 4.15 0.779 2 4.33 0.662 1
Trust 3.97 0.843 3 3.82 0.823 4
Goal achievement 3.95 0.793 4 3.87 1.005 2
Cohesive relationship 3.87 0.767 5 3.82 0.854 4
Analysis and control 3.87 0.615 5 3.59 0.966 9
Innovation 3.64 0.584 7 3.77 0.842 6
Respect for people 3.62 0.815 8 3.62 0.782 8
Trying new concepts 3.56 0.680 9 3.64 0.628 7
Outcome excellence 3.46 0.854 10 3.26 1.208 11
Stability and continuity 3.33 1.060 11 3.54 0.913 10
Table 2. Mean Scores, Standard Deviations, Intercorrelations, and Cronbach ␣Reliabilities for the Project Level Culture Constructs
Culture type construct Mean 共project兲Standard deviation 1 2 3 4
Clan 3.93 0.80 共0.92兲
Adhocracy 3.58 0.63 0.72 共0.94兲
Market 3.92 0.80 0.66 0.70 共0.87兲
Hierarchy 3.45 0.84 0.53 0.48 0.78 共0.79兲
Table 3. Mean Scores, Standard Deviations, Intercorrelations, and Cronbach ␣Reliabilities for the Organization Level Culture Constructs
Culture type construct Mean 共organization兲Standard deviation 1 2 3 4
Clan 3.89 0.78 共0.91兲
Adhocracy 3.72 0.74 0.71 共0.90兲
Market 3.67 1.04 0.61 0.68 共0.83兲
Hierarchy 3.45 0.94 0.42 0.39 0.65 共0.74兲
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are dominant values. Clan culture concerns teamwork and people
relationships, and market culture focuses on goal achievement.
This again proves that Hong Kong’s construction industry is a
people-based industry, in which interaction among project stake-
holders is highly appreciated and encouraged.
It is quite surprising that Respect for people has a rather low
ranking. Although it is a value considered typical of Clan culture,
it only ranks 8 for both project and organization values, despite
the fact that other items of clan culture have a higher score. The
result obtained does not signify that respect is not necessary; it
simply reflects the fact that even if a relationship is close in a
project or organization, there might be different personal values
and beliefs, or different personal or organizational objectives have
affected respect among people. However, senior management
should be aware of this phenomenon because it will be difficult to
manage people if employees lack respect for one another, a situ-
ation which can occur at any time and does not only apply to KM.
There is a distinct difference in mean score between the items
in “Market” culture. Getting the job done ranks 1 and 2 in
projects and organizations respectively. In contrast, Outcome ex-
cellence ranks 10 and 11, almost the lowest priority. The low
score indicates that the construction industry places more empha-
sis on getting the job completed than on making the job
outstanding.
Respondents indicated that the adoption of hierarchy culture is
the minimum 共mean=3.45兲at both levels. This score is still
slightly above neutral. Hierarchy culture establishes rules and
provides a stable workplace. On top of that, the lowest mean
value of Hierarchy culture does not suggest that hierarchy is not
essential. Analysis and control,stability, and continuity are basic
elements for the development of an organization and project,
therefore awareness of these two values maybe undermined by
participants.
Knowledge Flow
Different means of knowledge flow are grouped under codifica-
tion or personalization in Table 5. Table 6 shows the mean score
obtained for different means of knowledge flow on a 5-point
scale. The former approach emphasizes codifying knowledge,
whereas the latter relates to people and networks as means of
knowledge transfer. The score ranged from 1.95 to 4.31 in
projects and between 2.26 and 4.46 in organizations. Staff
meeting/group meeting received the highest score for both
projects and organizations at 4.31 and 4.46 respectively. This
shows that no matter how advanced the technology, the most
traditional mode of interaction, i.e., face to face meeting, is al-
ways the most popular approach to communicating and sharing
within projects and organizations.
The items ranked second to fourth in ascending order for
projects were Document management 共mean=4.21兲,Internet/
Intranet 共mean=4.13兲, and One-on-one conversation 共mean
=3.82兲. For organizations, they were Internet/Intranet 共mean
=3.82兲,Training/e-learning 共mean =3.62兲,Seminars/
presentations 共mean= 3.62兲,Working Groups/communities of
practice 共mean=3.62兲,Document management, and Phone calls/
teleconferencing 共mean= 3.59兲. The results reveal that apart from
staff meetings, the most frequently employed means of knowl-
edge flow are document management and the Internet/Intranet.
An obvious difference between the rankings of means of
knowledge flow is that Training/e-learning and Seminars/
Presentations rank third in importance for organizations but 8th
and 9th for projects. The means of knowledge flow mainly rely on
resources provided by an organization to different projects. As a
project is one of the units of an organization, training, seminars,
or presentations usually invite the participation of people from
different projects or other units in an organization, and are some-
thing that should be organized by the parent organization. Such
differences can therefore be accounted for.
Electronic discussion groups are becoming popular in our so-
ciety. They provide a platform for people from different locations
to express and exchange knowledge and ideas via the Internet on
any specific topic. However, the use of this communication tool is
not common in the contracting sector. It ranks 16th at both orga-
nization level 共mean=2.26兲and project level 共mean =1.95兲. One
of the characteristics of the electronic discussion group is that it is
an indirect channel for people who do not know each other well
or people in different geographical locations to share information.
In the construction industry, cohesive relationships are estab-
lished, and the nature of the long hours lends itself to meeting and
discussing easily. As a result of people’s preference for a more
direct approach to knowledge flow, the electronic discussion
group is not widely used at either project or organization level.
Since participants welcome direct interaction, if employees have
good communication skills and an extensive personal network,
there is no doubt that the opportunity to exchange knowledge is
considerably higher.
When comparing the direction of the KM strategy, the pattern
in Table 6 shows only the ways in which knowledge flow would
dominate, e.g., meetings, but not the KM strategy. Codification is
more formal and the use of technology is for storage of knowl-
edge. Personalization is knowledge in people’s heads, and tech-
nology is mainly used to communicate knowledge. The
Table 4. Classification of Organizational Values into Four Culture Types
Culture type construct Core values
Clan Honest communication
Respect for people
Trust
Cohesive relationships
Adhocracy Innovation
Trying new concepts
Market Goal achievement
Getting the job done
Outcome excellence
Hierarchy Stability and continuity
Analysis and control
Table 5. Classification of Knowledge Flow into Two Main KM Strate-
gies: Codification or Personalization
Codification Personalization
Search engine/information
retrieval systems
Staff meetings/group meetings
Internet/Intranet Peer interaction
Document management One-on-one conversation
Training/e-learning Phone calls/teleconferencing
Seminars/presentations Video conferencing
Workflow and tracking system Directory of expertise
Postproject review Working group/community
of practice
Electronic discussion groups Mentoring/tutoring
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composition of each strategy, either codification or personaliza-
tion, is heavily reliant on a certain approach, and this is reflected
in the extreme mean values received.
Figs. 2 and 3 present the aggregated score of knowledge flow
in two divisions: codification and personalization. The score of
projects in terms of codification is 26.03, as compared to 25.65
for organizations. The difference in the aggregated scores is 0.38,
which is a very small difference over eight items. The aggregated
score in terms of personalization is lower in projects 共25.41兲than
in organizations 共26.13兲, although the difference is only 0.72.
The overall values obtained for codification and personaliza-
tion strategies at the project and organization levels are very simi-
lar, with each strategy including some more popular and less
popular approaches. At the project level, the difference in the
aggregated score is 0.62, and at the organization level it is 0.48.
The contrasts in the two strategies between both enterprise levels
are very small.
In this research, the distribution of codification to personaliza-
tion is 50.6 and 49.4% at the project level and 49.5 and 50.5% at
the organization level. The proportion is nearly 1:1. Although the
result does not match with the 80-20 split suggested by Hansen et
al. 共1999兲, the 50-50 straddle fits the balance suggested by Koenig
共2001b兲. We believe that the direction of knowledge flow can be
personalization or codification because neither of them domi-
nates, rather the mixed use of personalization and codification is
more significant. They are both equally important and have con-
tributed to knowledge sharing within both projects and organiza-
tions.
Table 6. Mean Score of Knowledge Flow
Knowledge flow Mean 共project兲Standard deviation Rank Mean 共organization兲Standard deviation Rank
Staff meetings/group meetings 4.31 0.655 1 4.46 0.756 1
Document management 4.21 0.570 2 3.59 1.019 6
Intranet/internet 4.13 0.864 3 3.82 0.997 2
One-on-one conversation 3.82 0.756 4 3.08 1.285 10
Phone calls/teleconferencing 3.59 1.093 5 3.59 0.910 6
Peer interaction 3.49 0.885 6 3.33 1.132 9
Search engine/information retrieval system 3.41 1.186 7 3.51 1.189 8
Training/e-learning 3.38 0.907 8 3.62 0.907 3
Seminars/presentations 3.26 1.069 9 3.62 1.091 3
Working groups/communities of practice 2.97 1.328 10 3.62 1.042 3
Mentoring/tutoring 2.90 1.071 11 2.77 1.038 12
Workflow and tracking system 2.87 1.128 12 2.49 1.315 14
Postproject review 2.82 1.233 13 2.74 1.292 13
Directory of expertise 2.33 1.221 14 2.97 1.013 11
Videoconferencing 2.00 0.946 15 2.31 1.217 15
Electronic discussion groups 1.95 1.234 16 2.26 1.186 16
Note: Data in italic font denote codification; regular font represents personalization.
4.21
4.13
3.41
3.38
3.26
2.87
2.82
1.95
3.59
3.82
3.51
3.62
3.62
2.49
2.74
2.26
0
5
10
15
20
25
30
(project) (organization)
Mea n Mea n
Electronic Discussion Groups
Pos t Project Review
Wo rkflow and trac kin g sys tem
Seminar/ Pres entat io n
Training/ e-learning
Search engine/Information
retrievalsys tem
Intranet/ Internet
Document Management
Fig. 2. Aggregated score of knowledge flow 共codification兲
4.31
3.82
3.59
3.49
2.97
2.9
2
2.33
4.46
3.08
3.59
3.33
3.62
2.77
2.31
2.97
0
5
10
15
20
25
30
(project) (organization)
Mean Mean
Directory of expertise
Video conferencing
Mentoring / Tutoring
Working groups / Communities of
practice
Peer interaction
Phone calls / Teleconferencing
One-on-one conversation
Staff meetings / Group meetings
Fig. 3. Aggregated score of knowledge flow 共personalization兲
Table 7. Ranking of KMS Success Indicators in Projects and Organizations
Organization Mean 共project兲Rank Mean 共organization兲Rank
Management supports KMS 3.97 1 3.82 1
KMS provides benefits 3.92 2 3.82 1
Flexible structure enables sharing of knowledge 3.72 3 3.59 5
Necessary IT infrastructure is in place 3.64 4 3.67 3
Necessary people are in place 3.56 5 3.44 7
Clear purpose that is aligned with organization’s mission 3.56 5 3.54 6
Multiple ways to capture knowledge 3.21 7 3.67 3
Aggregated KMS success factor score 25.58 25.55
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KMS Success Factor
The mean scores of KMS success indicators in projects ranged
from 3.21 to 3.97 on a 5-point scale 共Table 7兲. This shows that
KMS success in projects is rather neutral. However, in compari-
son to the KMS success indicator in organizations, the result is
slightly higher. All KMS success indicators received for projects
were higher than those of organizations, except in the case of IT
infrastructure and multiple ways to capture knowledge. The KMS
success factors in organizations ranged from 3.44 to 3.82.
The top success factor in both domains was the support of
KMS from project management 共mean= 3.97兲and organization
management 共mean=3.82兲.KMS provides benefits to organiza-
tion shared the highest score with support of KMS at the organi-
zation level. Concerning the multiple ways to capture knowledge,
answers from respondents were quite extreme, ranking from 7th
place for projects to 3rd place for organizations. This can be
explained by the nature of projects. Projects are temporary tasks,
therefore if more channels are required to obtain knowledge, in-
vestment will consequently be increased. From the profitability
point of view, organizations prefer having basic channels only,
resulting in the fewer resources supplied 共concerning channels for
capturing knowledge兲at project level. Respondents may therefore
sense less support there.
The second to fourth KMS success factors at project level are
KMS provides benefit to project,flexible structure and IT infra-
structure, whereas at organization level they are IT infrastructure,
multiple ways to capture knowledge and flexible structure.Itis
quite surprising that the people infrastructure is not considered to
be among the top four KMS success factors, even though person-
alization is a top priority as a means of knowledge flow. When
adding the seven items into aggregated success, the score is 25.58
for projects and 25.55 for organizations. The difference is only
0.03. This again proves that success factors and success levels are
very similar between the two enterprise levels.
Participants’ Comments on KM
The last question on the questionnaire invited respondents to
comment on the implementation of KM in the construction indus-
try. Some respondents reflected that the lack of resources is the
main difficulty in implementing KM. Some suggested that people
always make same mistakes but never learn from one project to
another. A project manager frankly admitted that KM had not yet
been started in his organization; the need was realized but the
development had never been carried out. He emphasized that it is
always “easy to know but hard to work out”; a clear direction,
decision, and action strategy are always lacking. These opinions
indicate that KM has not yet been systematically introduced to
employees, and that the main barrier is the lack of resources de-
ployed by organizations, i.e., money, time, etc. The comments
given are usually positive toward KM. However, even if employ-
ees realize its importance, if organizations do not take the initia-
tive to implement KM, its effect will be limited. Another
interesting piece of feedback, which coincides with the findings
of Cameron and Quinn 共1999兲, is that KM requires a “champion”
to drive the implementation successfully, which again implies that
a leader or other form of support from senior management is
critical.
Some practitioners suggested that the application of KM re-
flects an organization’s culture. They considered that sufficient
training and information should be provided to staff, the lack of
training being cited as one reason why KM is not realized
共Koenig 2001a兲. One construction manager believed that KM is
an effective and useful tool but is not widely used in the construc-
tion industry, especially among local construction firms. One of
the reasons may be that Hong Kong’s construction industry is
traditional and conservative, lacking the necessary vision to drive
the industry forward.
Theoretical and Practical Implications
Although there exists a large body of literature about KM, knowl-
edge flow, and organizational culture, there is a dearth of infor-
mation regarding KM specifically in a project-based industry such
as construction. It is hoped that this research will contribute to
this body of literature in knowledge and project management.
This study has great implications in relation to the concepts of
organizational culture types, strategic approach for knowledge
flow, and the success of KMSs at two different hierarchical levels,
i.e., the project and organization levels. It appears that different
organizational culture types may call for different KM strategies.
Identifying the need is an important step toward developing the
theory, but much research is still needed in this area.
Theoretical study is needed to explore how codification and
personalization are employed at both project and organization lev-
els in contracting firms in the construction industry. This research
found that they were employed as a hybrid and balanced approach
and that they generally complement each other. There is a great
need for research on knowledge flows within and across projects
and how to make them successful, as such literature is lacking.
Critical areas of study include how to create, capture, transfer,
share, store, retrieve and understand information, and knowledge
in projects. Researchers need to better understand how to get from
tacit to explicit knowledge and how to allow for personal experi-
ence and expertise to be shared through project networks. This
growing interdisciplinary research field provides a rich library of
literature from which both KM and project management could
benefit.
Project-based organizations can learn from this study that
knowledge flow and KM success are greatly impacted by organi-
zational culture types. In order to successfully transfer and retain
knowledge within and across projects and organizations, senior
management should recognize and plan for this need in order to
keep from losing valuable project and organizational knowledge.
In addition, cultivating the right organizational culture to encour-
age knowledge sharing among project networks should be greatly
encouraged.
It was interesting that the use of information and communica-
tion technology was not seen as the most critical factor by most of
the survey respondents. With rapidly changing information tech-
nologies and the complex knowledge required for performing
project work, the dynamic of the workforce is changing as well.
DeLong 共2004, p. 16兲pointed out that, “knowledge-intensive
work today is much more interdisciplinary, often requiring the
integration of expertise across a wide range of subjects.” A wealth
of tools and techniques are available for project organizations to
leverage for KM, and additional research should be done regard-
ing the use of these tools throughout the life cycle of projects.
Good KM will surely boost the image of the construction industry
with the better reuse of valuable knowledge, avoiding the repeti-
tion of mistakes/defects in the short-term and promoting innova-
tion in the long run.
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Conclusions
This research investigated KM at project and organization levels
in Hong Kong’s contracting firms. Three main areas were studied:
organizational value, knowledge flow, and KMS success factors.
The organizational value was analyzed according to mean scores,
rankings, and the four cultural models. The four models of culture
are the hierarchy, market, clan, and adhocracy cultures. The popu-
larity of the models and the composition of each model were
analyzed. Clan culture is the most popular at project and organi-
zation level, thus this finding shows that the culture of contractor
firms depends on teamwork and networks/people. This empha-
sizes that the construction industry, besides being a project-based
industry, is also a people-based one.
The investigation of knowledge flow presents the KM strategy
applied in construction projects or organizations. The two main
KM strategies, codification and personalization, were found to be
employed in projects and organizations in a nearly 50-50 mix,
which indicates that these two strategies are equally important for
KM, with neither of them dominating. It was further found that
face-to-face means like staff or group meetings were the most
valued by industry practitioners, coinciding with previous re-
search findings that information and communication technologies
only act as enablers and do not play a dominant role.
Results from the study on KMS success indicators emphasize
that support for KMS from the management level is crucial, and
this may require a KM champion to drive its successful imple-
mentation. Respondents generally believed that KM is critical and
beneficial, as stated by 64% at project and 74% at organization
level. The data reveal that the application of KM echoes an orga-
nization’s culture. It is in this respect that cultivating the right
organizational culture is a prerequisite for successful KM imple-
mentation in contracting organizations. Unlike other knowledge-
intensive industries, construction suffers from attitudes to
completing a project according to various stakeholders’ require-
ments; in this industry, learning and knowledge transfer seldom
play a part and are not paid for as an effort in project works.
In conclusion, based on the data collected from respondents in
the contracting sector of the construction industry in Hong Kong
through random sampling, the research identifies critical findings
that senior management and many others should take into consid-
eration before establishing a KMS or the implementation of a KM
solution. The above areas have a significant effect on the likeli-
hood of success and should not be ignored.
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