Knowledge Management Strategic Knowledge Management Strategic Alignment:Alignment:

A case for the Banking Sector in the Gulf A case for the Banking Sector in the Gulf Cooperation Council (GCC) CountriesCooperation Council (GCC) Countries

Jaflah Al-Ammary

1. Measuring the alignment between KM strategy, Business strategy (KM-BS alignment)

2. Measuring the alignment between KM strategy, IS/IT strategy (KM-IS/IT alignment)

3. Measuring the Co-alignment between KM strategy, Business strategy and IS/IT strategy (KM-BS-IS/IT)

4. Investigate the link between these alignments (KM-BS, KM-IS/IT, KM-BS-IS/IT )and the performance.

5. Investigate the influence of the organizational culture and technological factors on developing a KM-strategic alignment model for the GCC countries

Research objectives:Research objectives:

“Fit” or Alignment• Fit or alignments can be defined as the correspondence

between a set of components.

• The concept of “fit” or alignment has served as important building block for theory construction in several area of research.

• Strategic fit or alignment among the various systems component and the business processes they support is fundamental not only to competitive advantage but also to the sustainability of that advantage (Alleman, 1998)

Business and KM strategic alignment:Business and KM strategic alignment:

The degree to which knowledge resources and capabilities provided by the KM strategy, is supporting the strategic and intellectual requirements of the business strategy in order to manage the strategic and knowledge gaps.

KM and IS/IT strategic alignment: KM and IS/IT strategic alignment:

Using IS/IT resources (technological infrastructure, computer system application and organization information) to influence, leverage and execute KM strategy to manage the organization knowledge gap or surpluses and permit knowledge to flow effectively.

Research Model and Research Model and HypothesesHypotheses

Research Model ComponentsResearch Model Components

Business strategy :Business strategy :

Miles and Snow (1978) typology (Defenders, prospectors, and analyzers)

KM strategy :KM strategy :

Knowledge Aggressive strategy

Knowledge Transfer strategy

Knowledge conservative strategy

Research Model ComponentsResearch Model Components

STROISSTROIS : Strategic Orientation of the portfolio of Information System (Chan, et al., 1998)

Dimensions Definitions

IS to Support Company Aggressiveness IS deployments used by the business unit when pursuing aggressive marketplace action.

IS to Support Company Analysis IS deployments used by the business unit when conducting analyses of business situations

IS to Support Company Defensiveness IS deployments used by the business unit to improve the efficiency of company operations and strengthen market place links

IS to Support Company Futurity IS deployments used by the business unit for planning and projection purposes

IS to Support Company Proactive-ness IS deployments used by the business unit to expedite the introduction of products/services

IS to Support Company Risk Aversion IS deployments used by the business unit to make business risk assessments

IS to Support Company Innovativeness IS deployments used by the business unit to facilitate creativity and exploration

IS/IT strategy :IS/IT strategy :

Research Model ComponentsResearch Model Components

Organizational culture :Organizational culture :

• Openness to change and innovation

• Knowledge Sharing culture

Technological factors :Technological factors :

• IT Infrastructure

• IT Tools (computer system applications)

• IT know how

IS/IT Strategy

KMStrategy

KM-KCS

KM-KTS

KM-KAS

ISIT-DE

ISIT-PR

ISIT-RA

ISIT-AN

ISIT-FU

ISIT-AG

ISIT-IN

BusinessStrategy

BS-DEF

BS-PRO

BS-ANL

Organizational Culture

ORCL-SHR

ORCL-OPN

Technology Factors

IT-INF

IT-TOL

IT-KOH

PRF-GRTHPRF-PRFTPRF-INVT

Performance

A

A

Co-A

KMStrategy

KM-KCS

KM-KTS

KM-KAS

BusinessStrategy

BS-DEF

BS-PRO

BS-ANL

H 1.1H 1.2

H 1.3

H 3H 1

PRF-GRTHPRF-PRFTPRF-INVT

Performance

H1: The Business strategy in the GCC’s banking sector are aligned with the KM strategy

H1.1 : The Defender Banks in the GCC countries are pursuing a knowledge conservative strategyH1.2 : The Analyzer Banks in the GCC Countries are pursuing either a Knowledge conservative strategy or Knowledge transfer strategyH1.3 : The Prospector Banks in the GCC countries are pursuing Knowledge aggressive strategy

H3:The alignment between Business strategy and KM strategy in the Banking sector at the GCC countries is associated with better performance

H 2.2

H 2.3

H 2.1

IS/IT Strategy

KMStrategy

KM-KCS

KM-KTS

KM-KAS

ISIT-DE

ISIT-PR

ISIT-RA

ISIT-AN

ISIT-FU

ISIT-AG

ISIT-IN

H 4H 2

PRF-GRTHPRF-PRFTPRF-INVT

Performance

H2: The KM strategy pursued by the GCC’s banking sectors is aligned with the IS/IT strategy

H2.1 Knowledge Aggressive strategy pursued by the GCC’s banking sector is associated with IS/IT support for a bank’s proactive-ness, innovativeness or aggressiveness.H2.2 Knowledge Transfer strategy pursued by the GCC’s banking sector is associated with IS/IT support for a bank’s analysis, futurity or risk aversion.H2.3 Knowledge Conservative strategy pursued by the GCC’s banking sector is associated with IS/IT support for a bank’s defensiveness or risk aversion.

H4: The alignment between KM strategy and the IS/IT strategy in the Banking sector at the GCC countries is associated with better performance

IS/IT Strategy

KMStrategy

BusinessStrategy

H 7

Performance

H 8

Co-alignment

H7: The KM strategy in the GCC’s banking sector are aligned with both Business strategy and the IS/IT strategy

H8:The Co-alignment between KM strategy, Business strategy and IS/IT strategy pursued by the Banking sector at the GCC countries is associated with better performance

PRF-GRTHPRF-PRFT

PRF-INVT

Performance

IS/IT Strategy

KMStrategy

KM-KCS

KM-KTS

KM-KAS

BusinessStrategy

Co-alignment

Organizational Culture

ORCL-SHR

ORCL-OPNH 5.1

H 5.2

H 5

Technology factors

IT-TOL

IT-KOH

IT-INF

H 6

H 6.1

H 6.2

H 6.3

Research methodologyResearch methodologyQuantitative method (Survey)Quantitative method (Survey)

•Sample of 240 banks (commercials, foreigners and specialists)

•Six questionnaires (BS, IS/IT, KMS, KM-IS/IT A, KM-BS A, FACTORS)

•Different questionnaires for CEO, CIO, and CKO (if available)

Qualitative Method (Case study)Qualitative Method (Case study)

6 case studies, one bank from each country

Confirm sample group, and set data.

Confirm delivery mode and process

Confirm sample group, and set data.

Confirm delivery mode and process

Construct survey, Continually pretest

and refine

Construct survey, Continually pretest

and refine

Administer to pilot group and refine

Administer to pilot group and refine

Administer surveyAdminister survey

Follow up missing survey and thank

respondents

Follow up missing survey and thank

respondents

Record data in database and

analyze

Record data in database and

analyze

Refine componentsin the research

framework (KMSA model)

Refine componentsin the research

framework (KMSA model)

Select 6 case studies (using the finding

of the survey)

Select 6 case studies (using the finding

of the survey)

Confirm the case study procedure

(time. Place, person questions etc.)

Confirm the case study procedure

(time. Place, person questions etc.)

Record and analyze data using qualitative

software

Record and analyze data using qualitative

software

Final research framework

GCC KMSA model

Final research framework

GCC KMSA model

Administer case studies

Administer case studies

Research methodologyResearch methodology

Test of the research Test of the research hypotheseshypotheses

Two approaches will be used to test the Two approaches will be used to test the research hypotheses:research hypotheses:

System approach: System approach: To test the hypotheses about the overall profile of the bank. This approach suggests that relationships between complex constructs are of meaning full

Bivariate approach:Bivariate approach: To test the hypotheses about a specific dimension of interest. This approach suggests that the components or dimensions of a complex construct can be disaggregated and the relationships between them can be meaning fully tested.

KM-KCS

KM-KTS

KM-KAS

ISIT-DE

ISIT-RA

ISIT-FU

ISIT-AG

ISIT-IN

BS-DEF

BS-PRO

BS-ANL

ALGN

ISIT-AN

ISIT-PR

Research Model utilizing “Bivariate” contracts

ALGN

PRF-GRTH

PRF-PRFT

PRF-INVTALGN

IS/IT Strategy

KM Strategy

Business Strategy

PerformanceKM-IS/IT Alignment

KM-BS Alignment

KM-BS-IS/IT Co-Alignment

IS/IT Strategy

KMStrategy

KM-KCS

KM-KTS

KM-KAS

ISIT-DEISIT-RA ISIT-FU ISIT-AG ISIT-IN

BusinessStrategy

BS-DEFBS-PRO BS-ANL

KM-IS/ITCo-alignment

KM-BSCo-alignment

ISIT-AN ISIT-PR

IS/IT-KMCo-alignment

Research Model utilizing Higher-order “System” contracts

PRF-GRTHPRF-PRFTPRF-INVT

Performance

Perspective

Key characteristics

Underlying conceptualization

of fit

Verbalization of a strategy proposition

Number of variables in

the specification

of fit

Analytical scheme (s) for testing fit

Measure of fit

Fit as Moderation

Interaction The interactive effects of strategy and managerial characteristics have implications for performance

Two Analysis of variance Moderated regression analysisSubgroup analysis

Statistical deviation

Fit as Mediation

Intervention Market share is a key intervening variable between strategy and performance

Two to multiple

Path- Analysis Statistical derivation

Fit as Matching

Matching The match between strategy and structure enhances administrative efficiency

Two ANOVADeviation score analysisResidual analysis

Interval-level measure

Fit as Co-

variation

Internal consistency

The degree of internal consistency in resource allocations has significant effect on performance

Four to multiple

Second order factor analysis (confirmatory)

Interval measure

Venkatraman (1989) perspectives of “fit”

“There is a varying effects of the Business strategy (predictor) on the performance (criterion) as a function of

the KM strategy (moderating variable)”

“The interactive effects of KM and BS will have implication on the firm performance”

Business strategy

KM strategy

Performance

Moderate

Predictor

Criterion

Moderation approach of “Fit”Moderation approach of “Fit”

“The existence of a significant intervening mechanism (KM strategy) between an antecedent variable (Business

strategy) and the consequent variable (Performance)”

“KM strategy is a mediator in a system relationships between Business strategy and performance”

Business Strategy KM strategy

Performance

Intervening variableAntecedent variable

Consequent variable

Mediation approach of “Fit”Mediation approach of “Fit”

“Fit within the KM context existed when the KM strategy matches the business strategy goals and objectives. The

measure of fit between KM strategy and business strategy is developed independent of performance. The effect of

this fit on the performance could be examined .

KM Strategy

Business strategy

Performance

Low Performance

High

Performance

High

Performance

Low Performance

Low High

KM StrategyB

usin

ess

stra

tegy

Low

Hig

h

Matching approach of “Fit”Matching approach of “Fit”

“The co-alignment between KM strategy, IS/IT strategy and Business strategy which will influence the

performance”

KM Strategy

Business strategyPerformance

Business strategy

Co-alignment

Co-variation approach of “Fit”Co-variation approach of “Fit”