Improving Organizational Outcomes by Developing Technological Infrastructures

CXO THOUGHTS
Mostafa-Sayyadi Improving Organizational Outcomes by Developing Technological Infrastructures
Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies, and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to HR.com, People + Strategy and Consulting Magazine and his work has been featured in these top-flight business publications

Executive that manage knowledge and use information technology as an important driving force for business success find their organization to be more competitive and on the cutting edge. However, knowledge management implementation in organizations is determined by a set of critical success factors, one of which is the strategic dimension of information technology. For now, executives can develop technological infrastructures to create conducive organizational climates that foster collaboration and organizational learning in which knowledge, as a driver of improved performance, is shared and exploited. Unshared knowledge is like lettuce in the refrigerator—if eaten and shared, everyone enjoys it, if not, it could go bad and not have any use.

Executives act in a supportive role as leaders but academicians point out that that if leaders do not adequately support knowledge dissemination and creation through providing the essential technological infrastructures to store and retrieve organizational knowledge, knowledge management cannot be successful.

Technology can play a critical role in the success of knowledge management. For instance, scholars (such as Yew Wong and Mahmoud Migdadi) highlight the importance of technology in facilitating knowledge flow and communication. Ying-Jung Yeh and his colleagues also indicate that the effectiveness of knowledge management implementation is positively associated with using information technology and setting up useful software and systems to enhance strategic decision-making. Effective leaders can develop information technology through employing IT professionals and allocating more budgetary resources to share and utilize knowledge within organizations.

Executives around the globe realize that they play a critical role to achieve the best climate and for implementing information technology that create learning and growing the organization. Engaging followers and getting them to participate in leadership activities is an important part of knowledge management practices. Success, therefore, is dependent upon how executives formulated their organization’s technology. The key is for executives to inculcate a climate of learning and transparency of knowledge sharing within organizations so that informaton can be found and used instantaneously.

This is where leaders can attempt to achieve the best corporate climate and inspire followers to achieve business goals—stemming from a shared or distributed form of leadership across pivotal areas on the organization. The fact that executives steer the strategic direction of organizations is indicative of empowering people and making them more responsive to the constant changes in technology that occur on a day-to-day basis.

Technology, as one would imagine, is often associated with information and communication dispersed within companies. Daniels defines information and communication technology as “the application of technology to business processes to gather data and create information that is valuable to executives.” Therefore, considerable alignment between information technology and the knowledge management connects the two to develop and disseminate knowledge throughout the organization which, in turn, is an important factor of sustainable competitive advantage.

Executives agree with Robert Grant, who states that knowledge integration is one of the main reasons for the existence of companies. Furthermore, Andrew Gold, Arvind Malhotra, and Albert Segars suggest information technology as an important resource for strategic planning for knowledge integration. A scholar by the name of Olivier Caya posits that information technology enables knowledge integration by using three possible mechanisms:

  • Impersonal,
  • Personal, and;
  • Collective

Executives can use impersonal mechanism to enact regulations, procedures, and rules aimed at coordinating intellectual capital within organizations. Information technology disseminates protocols among members, and allows them to be knowledgeable of their progresses toward meeting determined milestones stated in the strategic plans.

The personal mechanism is used by executives to the vertically and horizontally exchanging knowledge between employees and collective mechanism is used when information technology manifests itself as a synthesizer of ideas and knowledge acquired from multiple organizational members. Thus, information technology encourages people to embark on technological facilities, such as shared electronic workspaces, to provide new ideas and possible solutions for solving organizational problems. As a result, it is viewed that information technology plays a critical role in integrating knowledge and is therefore aligned with the knowledge based view.

Executives can use information technology as communication mechanism manifestation and deployment and decision-aid technology. For example Hsieh argues that communication technology provides the ways to enhance interactions among members and departments within organizations. This type of technology use and eliminates the barriers of organizational communications while improving the extent of knowledge sharing and access for all followers at various levels of the organization. Decision-aid technology develops a cohesive infrastructures to store and retrieve knowledge to enable followers in creating more innovative solutions to problems and managing operational risks. Ergo, information technology supports organizational knowledge management by enabling interactions and providing more comprehensive and effective solutions to solve organizational problems. More effective solutions and better ideas improve the quality of services and products, which can add to the profitability of the organization. Executives can now see how information technology enhances a climate of openness within organizations, which will enable knowledge management processes in which followers can more effectively contribute to a firm’s performance and competitive advantage.

Furthermore, Forbes’ Reports on American industries clearly indicate that effective information technology directly contributes to firm performance. These researches acknowledge that information technology is an important enabler to effectively implement organizational processes. Communication technologies can in fact reduce paper-based transactions for companies that potentially decrease costs and subsequently improve profitability within these companies. Furthermore, it can be seen that communication technologies contribute to these companies to effectively identify opportunities in external business environment that leads to identify best opportunities for investment in the industry that potentially leads to improve financial performance for companies operating in these industries in terms of return on investment (ROI). Decision-aid technologies as another kind of information technology can also help companies to effectively create more innovative solutions for their organizational problems. In this way, I argue that information technology is positively associated with two important factors of product and service quality and customer satisfaction. I, therefore, recommend that companies should consider information technology as key player in improving their performance in today’s hypercompetitive environment.

Therefore, I highlight the direct impact of information technology on organizational outcomes, and also simultaneously portray the indirect contribution of information technology in improving organizational performance by facilitating knowledge management processes as another important component of firm performance.

References

Caya, O. (2008). Information technologies, knowledge integration, and performance in virtual teams. McGill University.

Grant, R. (1996). Prospering in dynamically competitive environments: Organizational capability as knowledge integration. Organization Science, 7, 375-387.

Gold, A.H., Malhotra, A., & Segars, A.H. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 18(1), 185-214.

Hsieh, H.J. (2007). Organizational characteristics, knowledge management strategy, enablers, and process capability: knowledge management performance in United States software companies. Lynn University.

Huijbregts, H.J. (2002). Information and communication technology for real estate investment management, University of Harvard.

Migdadi, M. (2009). Knowledge management enablers and outcomes in the small-and-medium sized enterprises. Industrial Management & Data Systems, .109(6), 840-858. 

Wong, K.Y. (2005). Critical Success Factors for Implementing Knowledge Management in Small and Medium Enterprises. Industrial Management & Data Systems, 105(3), 261-279.

Yeh, Y.J., Lai, S.Q., & Ho, C.T. (2006). Knowledge management enabler: a case study. Industrial Management & Data Systems, 106(6), 793-810.