ISSN-1855-6175

Organizational Knowledge and Stakeholder Communications: A Substantial Interconnection

Marko Selaković

International Association of Business Communicators GCC Chapter, Dubai, United Arab Emirates

ABSTRACT

Within this research (conducted as part of a thesis) the occurence and nature of the interconnection between the application of organizational knowledge preservation and upgrade concepts and efficiency of the stakeholder communications of the companies has been identified. The data related to practices and attitudes are collected by structured interviews with 32 companies: 16 from Western Balkans and 16 from Middle East. Based on the literature review and research findings, the interdependence between the existence of organizational knowledge preservation and upgrade system and the success of the stakeholder communications has been determined.

Keywords: Organizational Knowledge; Knowledge Management; Communications, Stakeholders; Stakeholder Communications

1 INTRODUCTION

1.1 LITERATURE REVIEW

It is evident that there is an interrelation between organizational knowledge, on the one hand, and the efficiency of different business processes, on the other (Jennex et al, 2007). The relationship between knowledge management and internal communication processes has been the subject of extensive studies (Higgison et al, 2004; Kalla, 2005; Roy & Roy, 2002). However, the researches that specifically address the interdependence between knowledge management and strategic communication with external audiences are not largely present. 

Adequate knowledge management is essential for the effective setting and implementation of the strategy of external and internal communications (Leitner, 2006). Kuhn (2008) also came to a similar conclusion, looking at the interdependence of organizational knowledge and communication processes. Burleson (2016) claimed that the existence of a knowledge management system is one of the prerequisites for understanding the effectiveness of the organization's communication with stakeholders through social networks. Coombs (2014) argued that the existence of preserved organizational knowledge is crucial to successful communication in crisis situations, while Scott & Walsham (2005) point to the importance of knowledge management for the successful management of reputation risks. Crane and Livesey (2003) addressed the aspect of organizational identity, which also includes organizational knowledge, in the context of communication with the stakeholders. Simcic Bronn and Bronn (2003) analyzed the relationship between co-ordination, communication, and organizational learning, noting the interconnectedness and significance of the exchange in this triangle.

Riege & Lindsay (2006) recognized the interdependence between knowledge management and partnerships with the stakeholders from the public sector, pointing that there is a clear connection between these two processes. An adequate knowledge management system enables a stable and lasting partnership with the stakeholders. Nevertheless, the research they have conducted focuses exclusively on the public sector in developed societies, and their conclusion without additional verification cannot be considered in a wider research context.

Asif et al. (2013), Jørgensen et al. (2006), and Katsoulakos and Katsoulacos (2007), recognized the relationship between managing stakeholder relations and knowledge management, observing the connection between these two processes through the integrative prism. Asif et al. (2013) addressed the issue of integrating corporate social responsibility with the company's business processes. They point out that the correct identification of the stakeholders` demands, which can be achieved by applying integrated management systems that include knowledge management, is the starting point of integration. However, neither Asif et al. (2013) nor Katsoulakos and Katsoulacos (2007) do not go into the detailed elaboration of this interdependence from the point of view of improving the organization's communications.

According to Jørgensen et al. (2006), a learning organization can take the competitive advantage by adequate application of the integrated management concept, which includes the integration of stakeholder communication and knowledge management. "Integration as a strategic and inherent approach is a solution to problems related to achieving 'real' continuous improvement such as improved competitive advantages and contributing to sustainable development " (ibid., p. 721). Their work, however, focuses primarily on the incorporation and integration of feedback from the stakeholders into the knowledge management system, with only a few considerations related to the question of using the knowledge management concept to improve the efficiency of the stakeholder communication.

Antonacopolou and Meric (2005) studied the implications of interaction with stakeholders on organizational learning. Interactions of the organization with stakeholders are considered as mutually useful partnerships in which both parties learn: "knowledge-based interactions can foster learning partnerships " (ibid., p. 126). In a similar context, Manning (2010) looks at social capital, gained through communication with stakeholders and influential public, as a mean for the knowledge management improvement. Ayuso et al. (2006) stated that dialogue with the stakeholders can be a source of new ideas for an organization, which, with adequate knowledge management, can result in innovations and, in that way, bring the achievement of the competitive advantages for the organization. Downes and Marchant (2016), on the example of Australian organizations, concluded that there is room for further strengthening of the application of knowledge management to improve stakeholder communications.

The influence and role of organizational knowledge in the organizational development had been studied on various examples in the Western Balkans: public administration (Džinić, 2014), practice of Croatian enterprises (Alfirević et al, 2015), practice of statistical bodies (Jerak, 2013), management of vocational schools (Selaković & Karanac, 2009), sustainable development of electric power companies (Afrić & Višković, 2006), absorption of knowledge in knowledge-intensive sectors (Levi-Jakšić et al, 2013). The mentioned authors concluded that the establishment of a system of managing, preserving and upgrading organizational knowledge is one of the key factors for the successful functioning of the organizations that were the subject of their research. However, observations on the interdependence of knowledge management and communications are generally not present, except to a certain extent, an assessment of the impact of knowledge management on internal communications. Thus, Mihajlović and Dašić (2014) notice that adequate knowledge management leads to improvement, inter alia, in the domain of internal communications, while Jerak (2013) indicates that knowledge management systems can be utilized to improve communication and co-operation within the organization.

Pavičić et al. (2011) specifically studied knowledge management in the context of the management of organization`s communications with customers. According to them, the integration of knowledge management and customer relationships opens new opportunities for organization. Improvements can be made if knowledge management is put into the function of consumer behavior analysis. "Consumers / users / clients are important more than ever before, but, in order to serve them well, organizations not only need to collect and analyze all existing forms of relevant knowledge in the information system, but also to engage in relevant conversations" (ibid., p. 208).

In the field of preservation and management of organizational knowledge in the Middle East region, numerous researches were carried out. Al-Adaileh and Al-Atawi (2011) researched the impact of organizational culture on the knowledge exchange in Saudi Arabia, noting that there is a link between the level of knowledge exchange, from one side, and level and type of organizational culture, from the other side. Ahmad and Daghfous (2010) provided an overview of the models of organizational knowledge management and sharing in the United Arab Emirates, predominantly dealing with inter-organizational connecting aimed to the increasing efficiency of the knowledge exchange. Arif et al. (2012) specifically addressed the management of the organizational knowledge in the construction companies in the region, while Al-Alawi (2005) researched specific knowledge management skills in the banking sector of Bahrain. Also, Jennex (2006) gave an overview of organizational knowledge management issues in the Middle East region.

Hegazy & Ghorab (2014) researched the impact of portal usage on different organizational processes related to knowledge management. On the example of the United Arab Emirates University they have confirmed that knowledge sharing has a positive impact on innovation, employee learning and adaptability. Their findings are fully in line with the conclusion of Al-Busaidi (2010) study of knowledge management in Oman. Al-Alawi et al. (2007) studied the influence of different organizational culture factors on the process of building and preserving organizational knowledge, noting that trust, communication, information systems, awards, and organizational structures are in a positive relationship with the sharing of knowledge within the organization.

Review of the available literature reveals that no systematic research, that would comprehensively address the connection between the organizational knowledge management and the stakeholder communications, was undertaken in the Western Balkans. An identical situation is also evident in the literature review for the Middle East region. Also, there are no comparative studies that would compare organizational learning, knowledge management or stakeholder communications between these two regions. The general impression is that the connection between organizational knowledge management and stakeholder communications is an undiscovered field that provides opportunities for further research, in the Western Balkans and the Middle East, as well as at the global level.

1.2 OBJECTIVES, RESEARCH QUESTIONS AND HYPOTHESES

1.2.1 Research Objectives

The purpose of the research is to determine the existence and nature of the connection between the application of the concept of the organizational knowledge preservation and upgrade with the efficiency of the stakeholder communications of the companies.

The key subject of research, performed within the author`s master thesis, are the practices and attitudes of companies from the Western Balkans and the Middle East regarding the usage of the organizational knowledge for designing and implementing stakeholder communications.

Specific research objectives are:

  • Understanding and analyzing the practice of the stakeholder communications of the companies from the Western Balkans and the Middle East, in the context of the application of organizational knowledge in communication;
  • Identification of the possibilities for improving the efficiency of stakeholder communication, based on the results of the research;
  • Contribution to the creation of the basis for the practical application of contemporary methods of organizational knowledge usage for development of the stakeholder communications. 

1.2.2 Research questions and hypotheses

In the contemporary concept of learning organizations, more and more attention, both in organizational and procedural terms, is paid to the preservation of organizational knowledge (Nonaka, 1994). Bearing in mind that stakeholder communication is among the most important organizational processes (Olander & Landin, 2008; Crane & Livesey, 2003), the main research question is: 
Is there a connection between the existence of a system of preserving and upgrading organizational knowledge and the effectiveness of communication with the stakeholders?

In order to answer the research question, the sustainability of the following hypothesis has been examined:

  • The existence of a comprehensive system of preserving and upgrading organizational knowledge enhances the organization's capabilities for successful communication with the stakeholders.

Sub-hypothesis (with limited literary support and need for further verification through the research) is:

  • Companies that systematically store and upgrade organizational knowledge are more successful in communicating with the stakeholders than those who do not use such approach.

Both hypothesis and sub-hypothesis were examined by conducting qualitative research on a purposive sample of companies from the Western Balkans and the Middle East region.

The scientific contribution of the topic is reflected in the identification of the interconnection between the organizational knowledge and stakeholder communication, which has not been specifically observed so far neither in the Western Balkans, nor in the Middle East region. An additional scientific contribution is reflected in the development of recommendations for improvement based on research findings.

1.2.3 Assumptions and limitations

In methodological terms, it was assumed that the methodological approach to the implementation of the interview applied by Ljepava (2016) is applicable equally in both areas: Western Balkans and the Middle East.

The limitations relate to the nature of the sample and type of research: based on the research with the 32 companies surveyed, it is possible to come up with the indicative conclusions. However, it will not be possible to generalize these results to the entire population. Therefore, these research findings can be used as a guideline for further research in this field. Additionally, it should be taken into a consideration that certain data, which may explain the attitudes and situations in more details, are kept confidential within the companies.

2 METHODOLOGY

2.1 METHODOLOGICAL FRAMEWORK

Within this research, the following research methods have been used:

1. Methods of logical explanation - used for the examination of the topic through the review of existing scientific literature, and within an analysis of the findings of qualitative research. Methods of logical explanation used in this research include:

  • Analysis and synthesis;
  • Abstraction and concretization;
  • Inductive and deductive conclusion, and
  • Generalization and specialization.

2. Methods of empirical research - used in performing the experimental / research part. Methods of empirical research used in this research refer to a structured interview (Ljepava, 2016). Structured interviews were used to collect data that can be encoded and compared (Fontana & Frey, 1994; McDaniel & Gates, 2010).

In the implementation of the research - structured interviews, all the ethical principles of research were respected in accordance with the ethical codex of ICC / ESOMAR (ESOMAR, 2016) for conducting marketing and social research.

The results of the research are presented in the text form and as the graphs and tables. An analysis of the responses was done using a comparative content analysis, while the data sets were analyzed using descriptive statistical methods.

2.2 SAMPLING

Structured interviews were carried out between March and May 2017. The research involved representatives of 32 companies, divided into two strata according to the geographical principle: 16 companies operating in the Western Balkans (Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Macedonia) and 16 companies present in the Middle East Region (UAE, Saudi Arabia, Bahrain, Oman, Kuwait, Qatar).

In order to obtain the most indicative results, a purposive sample has been formed. Each sub-sample included small, medium and large companies from different sectors - production, services, education, healthcare etc. 

Eligible respondents for the interview were managers whose tasks are directly linked with knowledge management and / or communication processes - managers at the director / CEO level, communication managers, human resources managers, learning and development managers, or other senior executives whose work is related to the knowledge management and / or stakeholder communications.

In a total sample of 32 companies, the regional-level coverage of operations in both strata is identically distributed. The sample structure of the sample by the scope of operations is given in Graph 1.

The identical balance in both strata was achieved when it comes to the size of the companies in terms of the number of employees (Graph 2). Micro-enterprises with less than 10 employees are not included in the sample: although there are knowledge-based micro-enterprises (Radošević et al, 2008), they generally do not have fully developed procedures applicable to organizational knowledge management processes (Durst & Runar Edvardsson, 2012).

Analyzed by the nature of business operations of the companies, the sample also includes different sectors. Manufacturing and service sector are equally represented in the sample. The sample also includes educational institutions, consulting companies and healthcare sector, as well as companies that deal with other activities, such as Government and sports (Graph 3).

Companies in the service sector are somewhat more represented than the manufacturing companies in the Middle Eastern stratum, while manufacturing companies are more represented than the service companies in the Western Balkans stratum. Such structuring within the strata has a rationale in the fact that in the Middle East service sector is experiencing propulsive growth and development (IMF, 2016).

According to the function of the respondents, the top executives (chief executive officer) are the most represented in the overall sample. The respondents also include directors of communications, learning and development managers, other executives, and human resources managers (Graph 4). The category "other executives" included sales managers, director of HR communications and commercial director.

According to the various authors (Charles & Mertler, 2002; Francis et al, 2010; Baker et al, 2012), a purposive sample of 32 companies, with 16 companies in each of the strata, is an adequate basis for considering correlations and examining hypotheses in social research conducted through the interviews. At the same time, Onwuegbuzie and Collins (2007) indicate that a sample of 32 companies cannot be a basis for quantitative data analysis with scientifically acceptable statistical certainty. Therefore, in statistical terms, the results of the research carried out on this sample can be considered primarily as indicative.

3 RESULTS AND ANALYSIS

3.1 ORGANIZATIONAL KNOWLEDGE AND STAKEHOLDER COMMUNICATIONS - ASSESSMENT OF THE EXISTENCE AND SIGNIFICANCE OF THE CONNECTION

Respondents almost undividedly believe that the existence of a comprehensive system of preserving and upgrading organizational knowledge enhances the organization's capabilities for successful stakeholder communications (Graph 5).

Despite the predominant trend, certain differences in attitudes between companies from the Middle East and the Western Balkans have been noticed. While all respondents from the Middle East recognize the existence of the connection between the organizational knowledge and stakeholder communication, it can be observed that there are some respondents from the Western Balkans who consider that there is no connection between these two parameters.

In the explanations of their responses, the respondents provide multiple arguments why they consider that there is a positive influence of the system of preserving and upgrading organizational knowledge on the organization's capacities for successful stakeholder communications. The organizational knowledge system reinforces the capacities of organizations for communicating with the stakeholders by providing better consistency, better inputs, more efficient decision-making and more fundamental communication design:

All respondents from both geographic strata, without any distinction, consider that more previous information on communicating with the stakeholders has a positive or mainly positive influence on the company's communication (Graph 6).

Respondents point out various aspects that make this positive impact. They predominantly claim that more information lead to better planning and preparation of communications with the stakeholders, as well as more adequate decision-making, and avoiding repetition of mistakes from the past:

Based on the analyzed responses, it is noticeable that there is a positive influence of the existence of a system of the organizational knowledge preservation and upgrade to the success of communication with the stakeholders. In addition, more information about previous communication with the stakeholders has positive impact on the success of communications at the present moment.

3.2 IMPACT OF THE ORGANIZATIONAL KNOWLEDGE ON THE SUCCESS OF THE STAKEHOLDER COMMUNICATIONS

The majority of the respondents estimate that companies which systematically store and upgrade organizational knowledge are more successful in communicating with the stakeholders than those who do not do it. Only a small percentage of respondents consider that this type of interdependence does not exist (Graph 7).

Participants from the Middle East region respond more positively than participants from companies from the Western Balkans. Nearly all respondents from the Middle East recognize the interdependence, while the percentage of positive responses from the respondents from the Western Balkans is slightly lower (Chart 8).

The respondents state that the existence of a system of the organizational knowledge preservation and upgrade is an advantage for companies in communicating with the stakeholders:

Some respondents stress out that the success of communication cannot be based solely on the system. According to their responses, it is also necessary to develop skills of the communicators:

Based on the analysis of respondents' answers, it is noticeable that, in their opinion, companies that have a system of the organizational knowledge preservation and upgrade are more successful in communicating with the stakeholders than those who do not have such system. Moreover, in addition to the existence and performance of the organizational knowledge management system, development of the personal skills of the communicator is also among the important prerequisites for the success of the stakeholder communications.

4 DISCUSSION AND CONCLUSIONS

Within this research, stakeholder communications practices of the companies from the Western Balkans and the Middle East, have been analyzed in the context of the application of the organizational knowledge. 
By the thorough review of the available literature and results of the conducted research, the interdependence between the existence of a system of organizational knowledge preservation and upgrade and the success of the organization's stakeholder communications is unambiguously established. Confirmation of the hypothesis: "The existence of a comprehensive system of preserving and upgrading organizational knowledge enhances the organization's capabilities for successful communication with the stakeholders." is supported directly from the research findings and additionally illuminated in the literature review. The hypothesis is supported by the interview responses: 87.50% of the respondents believe that the existence of a comprehensive system of preserving and upgrading organizational knowledge reinforces the organization's capacities for successful communication with the stakeholders.

Additionally, the absolute majority of respondents, 84.38% of them, consider or mostly consider that companies that systematically store and upgrade their organizational knowledge are more successful in stakeholder communications than those who do not follow such practice. This finding additionally supports the underlying hypothesis. In addition, all respondents believe that more previous information on communicating with the stakeholders would positively influence the company's communications. Bearing in mind findings of Marshall and Brady (2001) that knowledge management systems are at the same time a source of information for employees, it can be concluded that the existence of such systems is of the utmost importance for the successful stakeholder communications of the companies. The results of the research also support the sub-hypothesis that companies that systematically preserve and upgrade organizational knowledge are more successful in communication with the stakeholders than those that do not do it.

The content analysis of the participants' responses shows that multiple aspects of the application of organizational knowledge in communicating with the stakeholders are applied in the organizations. The essential aspect of utilization of the organizational knowledge for the stakeholder communication activities is the knowledge transfer related to positive and negative experiences from the past and application of that knowledge to the actual communication momentum or task.

Knowledge management and learning are intertwined and interact with the stakeholder communications. This phenomenon puts number of systemic, strategic and operational challenges in front of the organizations. In the knowledge-based economies, stakeholder communications can be viewed as a complex process, whose strategic design, in order to ensure quality and sustainable performance, should include the following key components:

  • Establishment, preservation and upgrading of organizational knowledge management system;
  • Continuous learning and development of skills of the communicators;
  • Incorporation of previous experiences into the planning and design of the stakeholder communications strategies and activities;
  • Optimization of systems, processes and procedures for the transfer of knowledge and information within the organization.

From the aspect of practical application of conclusions of this research, the results indicate that it is important to implement the following measures for improving the efficiency of preserving organizational knowledge and increasing the effectiveness of communication with the stakeholders:

  • Development of stakeholder relations strategies and activities of based on the knowledge of the organization;
  • Holistic approach to designing communication with the stakeholders, with simultaneous application of knowledge management system, incorporation of organizational and personal experiences, development of knowledge and skills of communicators and optimization of processes, systems and procedures for knowledge transfer within the organization.

The opportunities for further research and application of the interconnection between the organizational knowledge and stakeholder communications are evident. This research provides a clear basis for deeper and more thorough research in the field. Despite the presented conclusions, recommendations and measures, the overlapping zones of these two fields are still not explored in neither scientific nor the organizational sense. The interdisciplinary approach of the professional and academic community is a prerequisite for successful further development of processes, procedures and research in this field.

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