The purpose of this work is to highlight The Effect of Knowledge Management on Organizational Performance specifically the study aimed to pursue the following objectives to determine the relationship between knowledge management and organizational performance; to evaluate the importance of training and development in the Nigerian manufacturing sector; to ascertain the impact of motivation on employees level of commitment in knowledge sharing and to evaluate how E-learning tools affect knowledge sharing in Nigerian manufacturing sector. The study had a population of 948 employees drawn from three manufacturing firms in Enugu State. The sample size of 284 was drawn using Taro Yamane formular at 5% error of tolerance and 95% level of confidence. Instrument used for data collection was the questionnaire. A total of 284 questionnaires were distributed while 246 were returned. A descriptive survey research design was adopted for the study. Four hypotheses were tested using Pearson statistical package for social sciences. The findings indicates that knowledge management had positive impact on performance organization; training and development affected employee performance positively; employee motivation has positive impact on the ability to share knowledge, and E-learning tools affect knowledge sharing positively in Nigerian manufacturing industry. The study conclude that organizations needs to improve existing skills and acquire new ones via knowledge management so as to have competitive advantages over organizations that do not practice knowledge management. The study recommends that Nigerian managers should fashioned out ways of implementing knowledge management that is most suitable for the organizations in order to enhance performance taking into consideration the nature of the organization and culture of the community where the organization is located and the prevailing situations facing the organization at a time.
1.1 Background of the Study
Knowledge has become a corporate asset that may be the principal competitive advantage in the global economy. The potential for success of the companies is closely tied to their ability to innovate and to develop their ways of production; all this is based on the knowledge assets possessed by the company [Davenport & Prusak, 1998]. The current focus and study of knowledge management is not for the sake academics only, but a realization that knowing about knowledge is critical to business growth and business survival.
Knowledge, if properly utilized and leveraged, can drive organizations to become more competitive, innovative and sustainable. The interest in organizational sustainability and growth has created much disclosure on the methods of improving and developing organizational performance, for example process re-engineering, innovation, and providing and superior customer service. Furthermore, several strategies appeared to tackle these improvement, among them was the concept of downsizing, a prevalent strategy in the 80’s, and was created under the pressure to reduce expenditure and to increase profitability. The effect of this strategy was the loss of vital knowledge workers, who had accumulated years of experience and knowledge, and who were forced to leave the organization because of the downsizing policy. By leaving the organization, they took valuable knowledge with them. Knowledge dispersed across organizations is an important source of organizational advantage (Teece 1998; Tsai and Ghoshal 1999). Knowledge is often defined in relation to action, e.g. information transformed into capability for effective action. However, together with ability to act, knowledge is also just what we know. Consequences of knowledge include, for example, a capacity to perform a particular task, or a productive resource or factor in providing competitive advantage. Experience, intuition and judgement belong to knowledge, which is hence a product of information, experience, skills and attitude. All knowledge is local and belief related. It may be defined as patterns of meaning that can promote a theoretical or practical understanding that enables the recognition of variety in complexity. These patterns are often developed through a coalescing of information. If information is seen as a set of coded events, then consistency occurs with the definition that explicit knowledge is codified (Wise, 2002).
Knowledge management is complex and multifaceted; it encompasses everything the organisation does to make knowledge available to the business, such as embedding key information in systems and processes, applying incentives to motivate employees and forging alliances to infuse the business with new knowledge. Effective knowledge management requires a combination of many organisational elements- technology, human resource practices, organisational structure and culture- in order to ensure that the right knowledge is brought to bear at the right time. Knowledge management initiatives in organization are consequently increasingly becoming important and firms are making significant information technology investments in deploying knowledge management systems (KMS).