The Effects of knowledge Creation Process on Organizational Performance: Evidence from Saudi Banking Sector.

Author(s)

Abdullah F Al Mulhim ,

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Volume 6 - January 2017 (01)

Abstract

Knowledge creation (KC) is considered an asset in competition and success. Nonaka and Takeuchi (1995) recommended a model of knowledge conversion to clarify the procedures of cooperation between explicit and tacit knowledge. A review of the relevant literature shows that no previous study used the Nonaka model to assess KC in Saudi knowledge-intensive firms in general and Saudi knowledge-intensive banks in particular. In addition, the appropriateness of applying the Nonaka model in various social settings is questionable. To fill these gaps, the aim of this study is to analyze the associations between knowledge creation processes (KCP) and organizational performance (OP) in knowledge-intensive banks. In order to create reliability between KC and performance, organizational creativity (OC) is added to the model. The emphasis is on the four modes of KC used in the Nonaka model, which are externalization, socialization, internalization, and combination. 214 self-administered questionnaires were distributed to investigate the extent to which Saudi banks perform KCP and performance activities. The data were verified through reliability, validity, and normality tests. Various statistical applications were used to analyze the survey data, namely factor analysis, Cronbach’s alpha, and multiple regression equations. The empirical results of this study confirmed that OC was critical for improving performance in the banking sector. In addition, the externalization process had the most positive influence on OC, followed by internalization, socialization, and combination processes, respectively. Finally, this study backs the opinion that the Nonaka model (SECI) is universal, but the utilization of each process is subject to leadership support, type of task, and cultural context.

Keywords

knowledge creation, SECI, organizational creativity, organizational performance, banking industry. 

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