LEADSTAR COLLEGE OF MANAGEMENTAND LEADERSHIP

THE ROLE OF KNOWLEDGE MANAGEMENT IN ENHANCING

ORGANIZATIONALPERFORMANCE: THE CASEOF MOTHERS AND
CHILDREN MULTISECTORAL DEVELOPMENT ORGANIZATION

BY: ESUBALEW GIZACHEW

ID NO: MBA/1520/22

ADVISOR: DR. ABERA LEGESSE

JULY/2024

ADDIS ABABA, ETHIOPIA

 Advisor Approval
This thesis entitled as “The Role Of Knowledge Management In Enhancing Organizational
performance: The Case of Mothers And Children Multisectoral Development Organization ” has been
submitted to Leadstar College Of Management and Leadership for examination with my approval as the
candidate's advisor.

Advisor: Dr Abera Legesse (PhD)

Signature: Date: July, 2024 G.C

III
 Leadstar College Of Management and Leadership

Final Thesis Approval

This is to certify that the thesis prepared by Esubalew Gizachew titled as “ The Role Of
Knowledge Management In Enhancing Organizational performance: The Case of Mothers
And Children Multisectoral Development Organization, Ethiopia.” which submitted in partial
fulfillment of the requirements for Master of Business Administration in line with the
regulations of the college and meets the accepted standards with respect to originality and
quality.

Signed by the examining Committee:

Advisor: Signature: Date:

Internal Examiner: Signature: Date:

External Examiner Signature: Date:

IV
 Declaration

I, Esubalew Gizachew, hereby declare that this thesis entitled as

“The Role Of Knowledge Management In Enhancing Organizational
performance: The Case of Mothers And Children Multisectoral
Development Organization.” is my original work and has not been
presented for a degree in any other university”

Signature:

Date: July. 2024

i
 ACKNOWLEDGMENT
First of all, I would like to thank almighty God, the source of every knowledge and wisdom. I
would also like to extend my sincere gratitude to my advisor; Dr. Abera Legesse Who will
have generously devoted his time and knowledge to giving me his proper guidance and
suggestions. My sincere gratitude will also go to Mothers and Children’s Multisectoral
Development Organization, who will have granted me personal and group interviews,
without whose cooperation this study would not have been possible.

Finally, I will be highly grateful to all persons who will have helped me in the development
and successful completion of this research.

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Contents
ACKNOWLEDGMENT.............................................................................................................................ii
Abstract..............................................................................................................................................viii
CHAPTER ONE.......................................................................................................................................1
1.1. Background of the Study............................................................................................................1
1.2. Statement of the problem..........................................................................................................3
1.3 Research Questions.....................................................................................................................3
1.4. Objective of the study................................................................................................................3
1.4.1. General Objective of the study............................................................................................3
1.4.2. Specific Objective of the study............................................................................................4
1.5. Significance of the study.............................................................................................................4
1.6. Scope of the study......................................................................................................................4
1.7. Limitation of the study...............................................................................................................5
1.8. Organization of the paper..............................................................................................................6
CHAPTER TWO.......................................................................................................................................7
REVIEW OF RELATED LITERATURE.....................................................................................................7
2.1. Theoretical review......................................................................................................................7
2.1.1. Concept of knowledge management..................................................................................7
2.2. Linkage of KM Process and Performance...................................................................................8
2.3. Organization and IT Support.....................................................................................................10
2.4. Challenges in KM Practice........................................................................................................11
2.5. Measurement of Performance.................................................................................................11
2.6. Review of empirical studies......................................................................................................12
2.7. Review of conceptual model....................................................................................................13
2.8 Hypothesis of the Study............................................................................................................14
CHAPTER THREE..................................................................................................................................15
METHODOLOGY OF STUDY..............................................................................................................15
3.1. The study setting......................................................................................................................15
3.2. Study design.............................................................................................................................15
3.3. Research Approach...................................................................................................................16
3.4. Population and sampling design...............................................................................................17
3.5. Sample size determination.......................................................................................................17
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 3.6. Sample selection technique......................................................................................................18
3.7. Source and methods of data collection....................................................................................18
3.7.1. Source of data...................................................................................................................18
3.7.2. Method of data collection.................................................................................................19
3.8. Methods of data analysis..........................................................................................................20
3.9. Reliability of the study..............................................................................................................21
3.10. Ethical Consideration..............................................................................................................22
CHAPTER FOUR...................................................................................................................................23
DATA PRESENTATION AND ANALYSIS.................................................................................................23
Introduction....................................................................................................................................23
4.1 Response Rate...........................................................................................................................23
4.2. Demographic characteristics of Respondents..........................................................................23
4.3. Descriptive Statistical Analysis of KM dimensions and organizational Performance................25
4.3.1 Mean and Standard Deviation for Knowledge Acquisition..........................................25
4.3.2 Mean and Standard Deviation for Knowledge Creation..............................................26
4.3.3 Mean and Standard Deviation for Knowledge Conversion..........................................27
4.3.4 Mean and Standard Deviation for Knowledge Sharing................................................27
4.3.5 Mean and Standard Deviation for Knowledge Storing................................................29
4.3.6 Mean and Standard Deviation for Organizational Performance..................................29
4.4.1 Multiple Regression Analysis of KM dimensions and organizational Performance.....31
4.5. Hypothesis Testing...................................................................................................................36
4.6. Discussion of Results................................................................................................................37
CHAPTER FIVE.....................................................................................................................................39
SUMMARY, RECOMMENDATIONS AND CONCLUSION........................................................................39
5.1. Summary..................................................................................................................................39
5.2. Limitation of the Study.............................................................................................................40
5.5. Conclusion................................................................................................................................41
5.3. Recommendations...................................................................................................................41
5.4. Suggestions for Further Research.............................................................................................42
REFERENCE..........................................................................................................................................43
?..........................................................................................................................................................48

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List of Tables
Table 1: Response Rate.......................................................................................................................23
Table 2: Demographic characteristics of respondents.........................................................................24
Table 3: Mean and Standard Deviation for Knowledge Acquisition...................................................25
Table 4: Mean and Standard Deviation for Knowledge Creation........................................................26
Table 5: Mean and Standard Deviation for Knowledge Conversion...................................................27
Table 6 Mean and Standard Deviation for Knowledge Sharing..........................................................28
Table 7 Mean and Standard Deviation for Knowledge Storing...........................................................29
Table 8 Mean and Standard Deviation for Organizational performance.............................................30
Table 9: Multi-co-linearity Test for Multiple Regression Analysis.....................................................33
Table 10: Model summary for KM and organizational performance..................................................34
Table 11: ANOVA for KM and organizational performance..............................................................35
Table 12: Coefficients for KM and organizational performance.........................................................35

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List of Figures

Figure 2: Histogram of standardized Residuals for organizational performance.................................32

Figure 3: Normal P-P plot of regression standardized residual for Performance Agreement..............32

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ACRONYMS AND ABBREVIATIONS

CoP Community of Practice

HLIs Higher Learning Institution

IC Intellectual Capital

ICT Information Communication Technology

INKM Information and Knowledge management

IT Information technology

KM Knowledge Management

KMAT Knowledge Management Assessment Tool

KMF Knowledge Management Framework

MCMDO Mothers and Children Multisectorial Development Organization

PG Post Graduate

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 Abstract
The objective of this study was to examine the effect of knowledge management practices on
organizational performance in the case of Mothers and Children Multisectorial Development
Organization Addis Ababa City. The study was directed by four specific research objectives
which pursued answers for the effect of knowledge management practices on organizational
performance. The specific objectives of the study were to examine the effect of knowledge
management practices that included knowledge acquisition, knowledge creation, knowledge
conversion, knowledge sharing and knowledge storing on organizational performance of
Mothers and Children Multisectorial Development Organization Addis Ababa City. The
study employed an explanatory research design due to its intent to find the effect of
knowledge management practices on organizational performance in the case of Mothers and
Children Multisectorial Development Organization. The total population of the study was
210 employees. Stratified random sampling was used to sample 138 respondents who
represented the total population of the study area with a 95% confidence level and 5%
margin of error. A quantitative approach was used and data were collected through
questionnaires and analyzed using SPSS after coding and cleaning to eliminate any
inadequacies. Data were analyzed using frequency descriptions, correlation, and regression
analysis. Most importantly, a multiple regression model was applied to determine the cause
and effect relationship between the dependent and independent variables. The findings
revealed that with the exception of knowledge acquisition, all independent variables (i.e.,
Knowledge creation, Knowledge conversion, Knowledge sharing and Knowledge storing)
have a significant positive influence on organization performance of Mothers and Children
Multisectorial Development Organization. The findings are discussed in detail in the research
along with some recommendations for organizations and researchers.

viii
Keywords: knowledge management, information technology, organizational process,
organizational culture (people), organizational strategy, workforce diversity, organizational
performance.

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 CHAPTER ONE
1.1. Background of the Study
Knowledge management is the process by which an enterprise will gather, organize,
share and analyze its knowledge in a way that will be easily accessible to employees.
This knowledge include technical recourses, frequently asked questions, training
documents and people’s skills. Knowledge management (KM) have generated a lot of
interest in corporate sectors in the last decade and knowledge driven businesses have
played a meaningful role in the economy (Girard & McIntyre, 2010).
Nu Graha et al (2019) noted KM is an important asset of any organization and as intellectual
capital it is corner stone for gaining sustainable competitive edge in competition. KM is
positively related to organizational performance (Liao and Wu, 2009). This implies KM practice
is crucial due to the fact that its implementation successfully enhances performance of
organization and also successful KM process leads to enhance performance of employees
ultimately enable to achieve organizational goal. The process is effectively practiced through
support of KM infrastructure that includes convenient organizational culture and IT support. It
harnesses together valuable assets primarily people and infrastructure with processes to use and
share knowledge effectively ultimately helps organization to enhance performance.
Organizational factors affect KM process are enabler’s includes organization culture and
technology along with other factors (Lee, 2017).

Knowledge management is very important especially in case of organizational change in

different perspective where internal and external factors will be directly involved. For the
economic diversification environment adaptations of learning and development within
and/or with competitors are Challenges which will be indiscriminate challenge faced by
the organization (Franco & Almeida, 2011). As a conscious discipline, it will have
developed from the various published work of academics and pioneers such as Peter
Ducker in the 1970s, Karl-Erik Svei by in the late 1980s, and Monika and Takeuchi in
the 1990s. It will begin when the concept of a “knowledge company” will be introduced
in published literature. It will only in 1995 when knowledge management in its current
form first receives significant attention among corporations and organizations. This will
came about as a result of the publication of the seminal book of Ikujiro Monika and
Hirakata Takeuchi titled The Knowledge Creating Company: How Japanese Companies

1
Create the Dynamics of Innovation. KM will be a dynamic process and multidimensional
in nature, encompassing information/knowledge content management, organizational
aspects, information and communications technology, etc. Accordingly, any
comprehensive KM strategy will take in to consideration the cross-functional nature of
the issue, involving broad areas of activity of the organization, from human resources
management to information and Technology services. Effective knowledge organizations
will support free flow and sharing of knowledge and information in all activities.
Through Knowledge Networks and communities of practice development organizations
can promote partnership, teamwork, with the free exchange of knowledge and best
practices between the organization, operational partners and international agencies.
Since the 1950s, a central question in international development will have been how
knowledge can best be generated, mobilized, made available, applied and adapted to
improve the human condition. In NGOs in Ethiopia, there will be a great deal of
knowledge generation albeit limited knowledge organization and structure. The two main
limitations of the knowledge management functions in these organizations will be
systematic knowledge codification and the strategic planning and execution of
knowledge dissemination to improve organizational performance. This limitation can be
alleviated by putting in place an effective knowledge management component initiative.
This research will intend to assess the state of knowledge management components’
practices improving organizational performance in Mothers and Children Multispectral
Development Organization.

2
1.2. Statement of the problem
Ali Zwain et al (2012) noted organizations are becoming knowledge-driven in order to
have competitive advantage. Building upon the premise that knowledge constitutes a
pivotal organizational resource, scholars have contended that knowledge management
contributes to positive organizational performance. Nevertheless, this impact has not
been rigorously substantiated (Chakravarthy, et al., 2003; Foss & Mahnke, 2003). Many
organizations have undertaken knowledge management initiatives in their quest to
enhance performance, yet their endeavors have met with only partial success (Leidner,
2000; Nidumolu, et al., 2001).

Previous studies consider information technology as an antecedent factor to other

knowledge management components in summarizing of link for maturity of KM
components (Rasulaetal., 2012). However, IT could be considered as one of the
components of knowledge management that influence organizational performance. So,
investigating a framework where IT is part of the KM components for performance
enhancement of organization will be necessary. This study focuses on capturing the
influence of IT as KM components.
Hence, the researcher was intended to look into KM elements which was direct
enhancement on organizational performance by the endowment of variety of employees
within Mothers’ and Children’s Multispectral Development Organization operating at
Addis Ababa.

1.3 Research Questions

 What is the status of knowledge management practice at MCMDO?
 What is the relationship among dimensions of Knowledge management practice with
performance?
 What are the challenges in implementation of knowledge management practice at
MCMDO?

1.4. Objective of the study

1.4.1. General Objective of the study

The general purpose of this study is to assess the role of knowledge management in

3
enhancing the organizational performance of Mothers’ and Children’s Multi-sectoral
organization operating in Addis Ababa.

1.4.2. Specific Objective of the study

 To determine whether the organizational culture in the organization influences the
performance of mother and children multi-sectoral organization.
 To determine whether the process of gaining and distributing knowledge has an
effect on the performance of the organization.
 To examine whether the information technology influence performance of the
organization.
 To examine whether the knowledge management strategy influence the
performance of the organization.

1.5. Significance of the study

The study aims to assess the Knowledge management component practice influencing
performance in Mothers and Children Multi-sectoral Development Organization. By
considering the practices of KM components enhancing performance in Mothers and
Children Multi-sectoral Development Organization, this thesis was anticipated three
contributions. The findings of this research could contribute to the need for research to
discover how KM elements can support the efficient and effective management of
Mother and Children Multi-sectoral Development Organization. This in turn could
encourage managers of the organization to consider better ways of implementing KM
components’ strategies to exploit the benefits further improving performance. Findings
of this research work can be used for further review and study of the subject of
knowledge management by NGOs. Finally, the outcome of this study could be used for
future researchers or students who may be interested in carrying out more research in this
area and it would also serve as reference material for students, managers or
organizational structures for the management of knowledge as a resource.

1.6. Scope of the study

Knowledge management is managing a corporation's knowledge through a systematically
and organizationally specified process for acquiring, organizing, sustaining, applying,
sharing, and renewing both the tacit and explicit knowledge of employees to enhance
4
organizational performance and create value (Davenport and Prusak, 1998). Tacit knowledge
referes to the internalized knowledge that individuals in an organization possess and where
he or she might not be aware that they have the knowledge about how they accomplish
particular tasks. On the other hand, explicit knowledge is the knowledge that individuals in
organizations know that they have and are conscious of it. Scope referes to the coverage
aspects related to the particular study area/geographic boundary. This study was limited to
organizational culture, information technology, process, and organizational strategy for
enhancing organizational performance of Mothers and Children Multi-sectorial Development
Organization.

1.7. Limitation of the study

The fact that the questionnaires were self-administered and structured may affect the
quality of the data. Since this research was limited to Mothers and Children Multi-
sectorial Development organization in Addis Ababa, the findings of the study cannot be
generalized somewhere else.

Technology services. Effective knowledge organizations were support free flow and
sharing of knowledge and information in all activities. Through Knowledge Networks
and communities of practice development organizations can promote partnership,
teamwork, with the free exchange of knowledge and best practices between the
organization, operational partners and international agencies.
Since the 1950s, a central question in international development have been how
knowledge can best be generated, mobilized, made available, applied and adapted to
improve the human condition. In NGOs in Ethiopia, there was a great deal of knowledge
generation albeit limited knowledge organization and structure. The two main limitations
of the knowledge management functions in these organizations were systematic
knowledge codification and the strategic planning and execution of knowledge
dissemination to improve organizational performance. This limitation can be alleviated
by putting in place an effective knowledge management component initiative. This
research was intended to assess the state of knowledge management components’
practices improving organizational performance in Mothers and Children Multispectral
5
Development Organization.

1.8. Organization of the paper

This paper organized into five chapters. The first chapter is about the background of the
study, statement of the problem, objective of the study, and scope and limitation of the study.
The second chapter focuses on different writings of scholars which will have been
considered, theoretical literature reviews, and review of empirical studies also conceptual
model in the field of knowledge management and performance management and
measurements will have been cited. The third chapter will discuss the methodologies and
procedures followed for the data collection and interpretations. The fourth chapter will
present the study findings, analysis, and presentation of the results. The fifth chapter will
bring to an end of this survey research with conclusion and recommendations.

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 CHAPTER TWO
REVIEW OF RELATED LITERATURE
This part is all about different literatures contained in the study. This includes concepts,
theories of knowledge management, organizational performance, and components of
knowledge management, linking knowledge management to organizational performance,
empirical reviews and conceptual frame work also has been presented.

2.1. Theoretical review

2.1.1. Concept of knowledge management

Knowledge management (KM) is process of capturing, developing, sharing, and
effectively using organizational knowledge. As process KM transforms individual
knowledge into organizational knowledge (Rasula et al, 2012). Process of KM
incorporates knowledge discovery and capture, sharing, and utilization.
KM helps organization to find, collect, select, organize, disseminate and transfer
information and expertise (Kumar, no date). Intellectual component can be tacit and
explicit knowledge (Servin, 2005; Becerra-Fernandez and Sabherwal, 2015). Tacit
knowledge exists in human mind more likely to be personal. Explicit knowledge exists in
the form of document or recorded and readily available for application. In the process,
knowledge discovery is developing tacit/explicit knowledge from data and information
or combining of prior knowledge. The main source of knowledge generation is human
efforts developed through education and research activities (Baptista et al,2017). Explicit
knowledge found in the form of reports, articles, manuals, patents, pictures, images,
video, sound, software whereas tacit knowledge is experience and action usually shared
through highly interactive conversation, shared experience includes best practice,
management skills, technologies, customer, competitor intelligence and market
(Hajamoohideen and Jeyanthi 2017).
Knowledge capture is process of retrieving accrued knowledge that resides within
people, artifacts, or entities. It is creating and forming knowledge (Alrubaiee et al, 2015).
Knowledge share is exchange of either tacit or explicit knowledge through socialization
or exchange Knowledge application. Knowledge share helps organizations improve their
performance, as employees generate ideas that can propel innovations (Al Kashari, and
7
Al Taheri, 2019 p 36). In educational institute KM can transform organizational new
levels of effectiveness, efficiency, and scope of operation, using IT support available to
users for effective productivity. There is link between KM, organizational effectiveness
and competitive advantage (Finn, 2013). As cited by Sharma and Kaur (2016) as well as
Becerra-Fernandez and Sabherwal (2010) , Nonaka and Takeuchi stated four ways of
managing knowledge that includes socialization, externalization, internalization and
combination which is termed as SECI Model. In socialization tacit knowledge is
converted into tacit knowledge through discussions, meetings, observation, practice etc.
In case of externalization tacit knowledge is converted into explicit knowledge and
availing in documents, manuals. In combination, explicit knowledge are converted into
another form of explicit knowledge whereas in internalization explicit knowledge is
converted into tacit knowledge by individuals.

2.2. Linkage of KM Process and Performance

In general KM process includes Knowledge creation, knowledge share, knowledge retention,
knowledge application. Mansour and Ahmad (2020) established significant relationship
between KM and creativity as well as innovation. However the author did not revealed
individual KM components relation with innovation. In the context of small business
knowledge sharing and application impact on innovativeness are statistically significant
positive effect (Samir, 2020). Effective KM is critical to the growth, performance, and
survival of organizations (Cletus, 2019) Mazhar and Saeed (2018) revealed positive and
significant relationship between KM and its dimensions include process, leadership, culture,
technology and measurement with creativity. To some extent this conclusion is not consistent
with notion of Al Ahmar et al (2014) noted that the stronger KM tends to improve education
organization, but increase was not significant. Ohiorenoya and Eboreime (2014) established
positive relationship of KM with overall performance, innovation, growth and competitive
advantage. Ngoc-Tan and Gregar (2018) revealed that positive association between
knowledge creation and innovation (technical and administrative) in academic setting. KM
can transform organizational new levels of effectiveness, efficiency, and scope of operation,
using advanced technology, data and information made available to users for effective
productivity (Dhamdhere, 2015). Culture of collaboration contributes to creation of new

8
knowledge by sharing experiences and knowledge among employees and by assisting others
in performing tasks (Ali et al, 2015).

Knowledge share explicit or tacit knowledge is communicated to other individuals through

writing research papers, delivering lecture, in dialogue and participating in community
practice (Khoualdi & Saleh., 2015). The sharing and utilization of tacit knowledge requires
high degrees of involvement of both knowledge holder and learner (Law and Chan, 2016).
The goal of knowledge sharing in a firm is to facilitate knowledge transfer, retain knowledge,
and to speed the knowledge adoption (R. Du. et al., 2007). The author evidenced that
expenditure on collaborative R&D (research performed by team) has better contributions to
performance. Employees’ intention to share and consequently sharing of tacit knowledge has
direct positive impacts on productivity also employees’ innovative contributions increased as
a result of exposure to others’ knowledge, expertise, and experiences (Torabi and El-Den,
2017). Increased job performance and satisfaction as well as proper compensation are crucial
in improving knowledge sharing (Vincent, 2017). Knowledge sharing improve work
performance through creativity is apparently one of the most important parts (Lee, 2018).
Ngoc-Tan and Gregar (2018) established inverse relationship between knowledge
dissemination and administrative innovation in academic setting.

Knowledge retention concerned with important intellectual asset remain in organization

through retention strategy reward structures, mentoring, interviews, and utilizing knowledge
from retirees or avail in documents using portals, own website or in, training and other
means. Thus in higher education institute there should be strategy to retain know how that
helps them in achieving competitive advantage.

Knowledge utilization is to make knowledge active and more appropriate for the organization
in creating value. Extensive review of Al-Kurdi et al (2018) indicated that decent knowledge
flow in working groups and collaborative societies of faculty members within and across
university department helps enhancing training, research skill, avoid scattered research.
Ngoc-Tan and Gregar (2018) revealed that positive association between knowledge
utilization and innovation both administrative and technical. M. Kinyua et al (2015)
concluded that knowledge application is statistically significant and has positive influence on

9
performance. KM application increases knowledge and information of employees
consequently increases organization's productivity (Zargar and Rezaee, 2013). Knowledge
sharing has significant effect on KM utilization in private university context (Zoubi, 2011).

2.3. Organization and IT Support

Km processes need to be supported by conducive organization culture and IT system. The
process need to provide systems that support work process and speed, information and data
(Hajric, 2018). Cheng et al (no date) suggested that importance of providing the “right”
incentive system and understanding individual’s expectation towards knowledge-sharing.
Employees should be rewarded for their cooperation and sharing of experience (Awni, 2017).
Rewarding effective institutional knowledge contributes to facilitate knowledge sharing.
Strategies that include convenient culture and reward are crucial factors that influence
knowledge sharing practice to improve employee performance (Vincent, 2017). The
organizational culture impacts the way people interact, the context knowledge is created,
resistance to certain changes, and ultimately the way they share or do not share knowledge
(Kumar, no date). This implies understanding value of KM practices, management support
for KM at all levels, incentives for knowledge sharing, and encouragement of interaction for
creation and sharing of knowledge is crucial. An organizational factor affect KM process
includes organization culture and technology along with other factors (Lee, 2017). As cited
by BecerraFernandez and Sabherwal (2015), Armbrecht et al. (2001) stated that KM cannot
survive by itself it involves people and communication, employee favoring policies, updated
technologies and a change in the culture of an organization (Bordeianu, 2015).

IT system support in transfer of all knowledge types and providing access to data and
information (Hajric, 2018). IT facilitates process of storage and distribution of knowledge
(Dominguez and Fernando, 2014). Review of Baptista et al (2017) expressed different
enabling factors facilitate KM practice includes culture along with others, IT system
facilitates KM process. Email and portals as KM technology are web-based applications or
websites provides information across an entire organization (Igbinovia and Ikenwe, 2017).
Paez-Logreira (2016) expressed that ICT can be employed to organize and enhance KM such
as university research groups. Application of KM requires combination of organizational
culture supports exchange and disseminates knowledge, including IT infrastructure support

10
KM processe (Al Ahmar et al, 2014). Mohamad and Ahmad (2012) established positive
significant relationship between information technology and KM practices.

2.4. Challenges in KM Practice

As cited by Igbinovia and Ikenwe (2017), Frost (2012) gave some KM casual failures
include: lack of performance indicators and measurable benefit, inadequate management
support , improper planning, design, coordination, and evaluation, inadequate skill, problems
with organizational culture and organizational structure. Vincent (2017) reported challenges
such as absence of support, negative attitude, limited time, and technology change; depend of
external expertise, few training and seminar, lack employee trust in which leads to low
morale and lack of creativity among employee. poor investment contributed to create
difficulty in KM implementation (Haradhan, 2017). Lack of IT support, trust and
transparency in communicating benefits and values of knowledge sharing practices, lack of
transparent rewards and recognition systems that motivate employees to share are KM
barriers (Hajamoohideen and Jeyanthi, 2017). Fear of plagiarism, lack of awareness of tacit
knowledge suggested and solution is to organize training programme to boost their tacit
knowledge however infrastructures support to harness tacit knowledge (Enakrire et al, 2012).
Another challenge is knowledge knowledge hoarding among employees could impede
competitiveness of an organization (Shorunke, et al .2014).

2.5. Measurement of Performance

Successful KM process enhances business performance and employee satisfaction (Khanal
and Raj, 2017). Evaluation of KM performance has become increasingly to enhance their
performance and competitiveness (Nasser et al, 2012). Hajamoohideen and Jeyanthi (2017)
suggested that KM practice support knowledge-sharing culture leads to increased
productivity, improved cycle times for business processes, and innovation. Effective KM
practice can improve creativity of employees’ leads to innovation helps for growth success.
Khoualdi & Saleh (2015) indicated that highly positive significant relation between job
satisfaction and each process of the KM. Thus in this study subjective performance
considered to determine the role of KM in the performance of organization, in academic
setting practice may enable to achieve innovation, programs and academic activities such
asresearch, publication and community service

11
2.6. Review of empirical studies

Knowledge-based theory of the firm by Grant (1996) explained certain premises

regarding the nature of knowledge and its role within the firm. The theory explains the
rationale for the firm, the delineation of its boundaries, the nature of organizational
capabilities, the distribution of decision-making authority and the determinants of
strategic alliances. According to Sveiby (2001), people can use their competence to
create value by transforming and converting knowledge externally or internally to the
organization they work for. The theory describes knowledge as a vital source of
competitive advantage. The level of knowledge available in a work force is not enough
to influence organization’s processes, but its integration in to production is the key to
competitive advantage. It’s how that boundaries and governance structures are
determined by the value to be derived from using employees’ knowledge. The
competitive advantage therefore is dependent on the firm’s ability to continuously
configure and integrate knowledge into value creating strategies. To put it short,
possession of knowledge is not enough but its integration, transfer and re-use are
essential to derive a competitive advantage for the organization. Knowledge is not
created and held by organizations but by individuals. The knowledge is then applied by
firms in the production of goods and services. Therefore, management is burdened with
the responsibility through the organization’s practice to help tap into employees’
knowledge and successfully transfer it to the organization for optimal productivity and
profitability. The organizational practice focuses on factors that are included in this
process (Morrison, 1992) in the age ofe-economy, business organizations need to
reconsider the process of doing business as well as incorporating KM practices in to it to
be more competitive. Awad and Ghaziri (2004) support this statement by saying that KM
is the ultimate competitive advantage for today’s organizations. KM is embedded in
many key areas such as economics, information management, and business environment
and in the human psychology. In addition, Hwang (2003) in his article quotes Leonard
(1995) “Managing knowledge is as kill, like financial acumen, and managers who
understand and develop it, will dominate competitively”. To create KM environment and

12
to be competitive organization, it is necessary to choose the appropriated esirable
environment in which the organization can adopt the changing concepts (Nonaka, 1998).
Assimilation of KM and adopting a culture that supports knowledge sharing can bring
change in organizational performance (Hwang, 2003). Technology is important aspects
to success fully organize and share knowledge. With the help of technology,
organizations can build the infrastructure and tools to support the expansion of KM
(Mathi, 2004). IT facilitates organizations to use knowledge for organizational efficiency
and effectiveness (Lang, 2001). Furthermore, IT provides suitable environment for
learning and interaction among the employees of an organization. Systems like expert
systems are used in organizations to capture and manage knowledge (Gumbley, 1998).

2.7. Review of conceptual model

In this study as shown in figure 1 conceptual framework developed based on considering

independent variable of KM process and KM infrastructure from the literature discussed
that includes most common variables that guided the study. Thus in academic setting to
investigate role of KM on performance to determine their association, the dependent
variable is subjective performance includes enhanced innovation, achieve academic
program and activity. Ordered logit regression model is developed to test each individual
KM process, organizational and IT support contribution for achievement of
organizational performance

Fig 1: Conceptual framework

Source: Adapted from (Khoualdi & Saleh., 2015; M. Kinyua et al, 2015; Baptista et al 2017;

13
Khanal and Raj Poudel, 2017; Mazhar and Saeed , 2018; Mansour and Ahmad ,2020)

2.8 Hypothesis of the Study

To analyze the relationship between training and employee performance, the

following hypothesis has been proposed.

H1 Knowledge acquisition significantly and positively influences organizational

performance of MCMDO.
H0: Knowledge acquisition does not significantly and positively influences
organizational performance of MCMDO.
H2: Knowledge creation significantly and positively influences organizational
performance of MCMDO
H0: Knowledge creation does not significantly and positively influences organizational
performance of MCMDO
H3: Knowledge conversion significantly and positively influences organizational
performance of MCMDO.

H0: Knowledge conversion does not significantly and positively influences

organizational performance of MCMDO.

14
 CHAPTER THREE
METHODOLOGY OF STUDY
In this chapter the practical method will be used to answer the research questions and
fulfill the purpose of the research will be presented. An overview of the research study,
will be provide along with a description of the instrument used for data gathering,
targeted population, sampling methods, sources of data used ,and methods of data
analysis, presentation and interpretation.

3.1. The study setting

The study setting was focused on Mothers and children multi-sectorial development
organization (MCMDO) is an indigenous, non-governmental, non-profit and
humanitarian organization founded in 1997. Initially the organization’s focus was on
preventing ‘Street-ism’ and promoting rehabilitation but has gradually increased to
encompass 7 thematic areas: Health, Education, and Skill training, Family and
Community Support, Water and Sanitation, Urban Agriculture and environmental
protection, and economic empowerment of women.

3.2. Study design

According to (Gujarati, 2004) research design is the conceptual structure within which
the research will be conducted. It is a plan or blue print which specifies how data relating
to a given problem will collect and analyzed. It provides the procedural outline to
conduct of any investigation. The research design will vary from research to research
based on research objectives (Ngalim, 2018).
Mainly quantitative descriptive survey research was employed using cross sectional design
however qualitative approach also used to establish the role of knowledge management in
enhancing organizational performance of MCMDO. Yin (2013) explains that a
descriptive analysis is concerned with specific predictions, with the narration of facts and
characteristics concerning individual, group or situation. It is helpful when a researcher
wants to look in to a phenomena on or a process in its natural contexts in order to get its
overall picture instead of taking one or some of its aspects and manipulating it in an
artificial setting (Cress well, 2012). In this study, the role of Knowledge Management in
enhancing organizational performance will be the situation under investigation. The
15
design will be favored since it is precisely intended to guarantee the final depiction of the
circumstance, ensuring that there is least inclination in the accumulation of information
and to minimize errors in translating the information gathered.

3.3. Research Approach

This study will seek to show the role of Knowledge Management in enhancing
Organizational Performance. For this study quantitative research approach will be used.
A quantitative survey Based quantitative design will be appropriate to test empirically the
relationship between knowledge management and organizational performance. The
researcher aims to give steps to collect data primarily used in descriptive research and
detail of methods can be explained below. Descriptive research involves analyzing data
collected through fieldwork.
Descriptive research is useful because the major purpose of this research is to describe
the role of knowledge management in enhancing organizational performance in
MCMDO. According to best and Khan (2008), a descriptive research design is important
when it is aimed to assess the question of what is. They stated its use as descriptive
research design is concerned with conditions or relationships that exist, opinions that are
held, processes that are evident or trends that are developed (Best and Khan,
2008).According to Kothari (1990), descriptive research studies are those studies that are
concerned with describing the characteristics of a particular individual, or of a group. As
the research will use the quantitative survey as the main primary research tool, this
means that the primary data will be subject to quantitative analysis (Saundersetal., 2009).
Thus, the researcher will use the new version of SPSS version 20.00 to process the
collected data. The results will be reported in descriptive fashion along with statistical
data. The choice of descriptive research for this study is because the main purpose of
descriptive research is to describe the state of view as it exists at present or itis fact
finding investigation. Therefore, it is reasonable to use this design for describing the
situation/the characteristics of the employees of MCMDO in detail.

16
3.4. Population and sampling design
According to Stang or (2011) population will be the entire group that the researcher
desires to learn about; any set of persons or objects that will possess at least one common
characteristic or a target group who would, in the ideal world, be the subject of the
research, and about whom one will be trying to say something (Punch, 2005). Similarly,
Saunders, Lewis and Thornhill (2007) will describe a population as a group of interest to
the researcher, the group to which she or he would like the results to be generalized. In
general, population will be the total number of participants in the study and sample will
be the subset of total population.
Target population for this study was individual staff from MCMDO indicates that total staffs were
210. Thus target population consists 138 staffs from departments and studied using census
approach which provides valuable information on the entire population in which available target
academic staffs.

3.5. Sample size determination

Samples will be very often drawn from a population to make estimates of population
parameters from the corresponding sample statistics. The selection of a sample size will
be necessary since total enumerations of the study population will be influenced by
factors such as limited time and finance. The desired minimum sample size will be
computed using Yemane’s equation (Yemane, 1967) at 95% confidence interval. The
total population will be two hundred ten (210) so to calculate the sample size will be use
the formula as follow

17
 N

n=
1+N(e)2

Where n = sample size

N = population size
and e = sampling error

With the total population of 205, at 95% confidence level, and +5% sampling error or
level of precision, and 50% degree of variability or significance level the samplesize will
calculated as follow
210 210 210

n= = = =138
1+210(0.05)2 1+0.525 1.525

Therefore the sample size will be 138.

3.6. Sample selection technique

Simple Random Sampling will be used to select the ultimate sampling units for the
questionnaire. Before the actual selection of the ultimate sampling units for the
questionnaire, all Employees of the organization will be grouped into one stratum to
include managerial level employees. In such cases, use of simple random sampling may
not provide a representative sample of the population. Therefore, the researcher will
divide the population into relatively homogenous groups and then samples will be
selected using simple random sampling from each group. This approach will selected as
it will guarantee that every unit in the population will have a chance of being selected.

3.7. Source and methods of data collection

3.7.1. Source of data

Both primary and secondary sources of data will be employed to fully answer the
research questions and test the hypotheses. The primary sources of data will be collected
from the full time employees of the organization (this will include managerial level

18
employees) using the five point’s Likert scale questionnaires. The researcher will use
secondary data from different sources, such as journal articles, news papers, websites
and textbooks. A part from making sure that they are related and relevant to the research
aims and objectives, the researcher will also ensure that it is reliable by collecting it from
sources with a good creditability.

3.7.2. Method of data collection

From the types of method of data collection the researcher will use semi-structured
questions in the interviews and both closed and open-ended types of questions in the
questionnaires. The questionnaires will contain standard questions as used by Rob Johns,
(2010) involving the construction of multiple-item measures, known as Likert scales.
These instruments usually will require respondents to give their level of agreement or
disagreement. In the interviews, the researcher will modify and adjusted questions to
evaluate the role of knowledge management in enhancing Organizational performance will
provide vital information about the interview to get the needed data through the interview
from the interviewees based on their individual perspectives and experiences through
direct discussion. The instrument for data collection will be used sequentially. Thus the
following instruments will developed and employed.
Questionnaire: The researcher adapted the studies of (Otaibi, 2007, Al-Othman, 2013, Edge,
2005, Singh and

19
2011) for the designing questionnaire. Regarding the questionnaires, a cover page will be
prepared which explains the purpose of the study and instruction to be followed by the
respondents. The question will have both closed and open-ended items for in-depth
information. In the case of close-ended questions, items will be rated by using a Likert
scale, rating scale based on the scale from "strongly agree" to "strongly disagree".
Regarding open-ended questions, the purpose will be to get additional and support ie
information about the study under consideration and to get background information.
Interview guides: One of the prerequisites for undertaking interviews is to prepare
interview guide questions. To this effect, guide questions will be prepared in advance.
The questions will consist of semi-structured questions so as to guide the interview.
Semi-structured questions are preferred as they give flexibility to the researcher to
modify, explain, omit, or in clued certain questions in the context of the conversation
(see Merriam 1998; Robson 1993). As highlighted above, the selected interviewees will
be communicated by the researcher via telephone calls and face to face.

3.8. Methods of data analysis

Data processing will consists of a number of closely related operations: the first one will
be editing and checking the data to be collected to detect and correct errors or omissions.
Moreover, the collected questionnaires will be verified carefully for the completeness of
the responses. Thus, the analysis of the study will consistent with the objective of the
research. The data gathered through distributing the questionnaires will be analyzed
using IBM SPSS statistics 23 software. The KM components such as organizational
culture (people), organizational process, information technology, and organizational
strategy will be analyzed using mode as the measure of central tendency along with
graphical synthesis. In dealing with categorical data, the mode will be an effective way to
examine the highest frequency of occurrence of the variable (Safa and Jessica,2005). A
Pearson correlation will be used to investigate the relationship between the studied KM
components mentioned above. Thus, the question for the regression will be the
dependent variable organizational performance and a function of independent variable
knowledge management elements, i.e. organizational culture (people), organizational
process, information technology, and organizational strategy. The equation of regression
in this study will be built around two sets of variables, namely the dependent variable
20
(organizational performance) and the independent variables (organizational culture
(people), organizational process, information technology, and organizational strategy).
The basic objective of using a regression equation in this study will be to make the
study more effective at describing, understanding, and predicting the stated variables.

relationship between the dependent variable, organizational performance of Mothers and

Children Multisectoral Development Organization and the independent variables will be
expressed as a linear combination of the independent variables plus an error term.
Following Greene (2003), the multi linear regression models will be specified as:
Y=α+b1x1+b2x2+b3x3+b4x4+ε

Where, y is the measure value of organizational performance or the value of dependent

variable.
α=Constant term (coefficient of intercept)

b1, b2, b3, b4 is coefficient of the independent variables (regression

coefficient). x1= The measured value of organizational culture(people)
X2= the measured value of organizational process
X3= the measured value of IT

X4= the measured value of organizational strategy

ε= Error term Where the b’s will be coefficients of independent variables are column vectors
for the independent variables in this case; organizational culture (people), organizational
process, information technology, and organizational strategy. While ε will be a vector of
errors of prediction, the errors will be assumed to be normally distributed with an expected
value of zero and a common variance.

3.9. Reliability of the study

Reliability will concern the extent to which an experiment, test or any measuring
procedure will yield the same results on repeated trials (Carmines and Zeller 1979). It
will clear that whenever we measure anything there will always a chance for errors. In
fact, the goal of error-free measurement will never attain in any area of scientific
investigation. Two sets of measurements may not duplicate each other exactly even if we

21
repeated the same study with the same sample. Reliability will be defined as the ratio of
variance of the true score to the variance of the actual measured score. The result will lie
between zero and one and most of the widely used scales will have reliabilities between
0.65 and 0.8. In general we can say that reliability of a study will be a pre-requirement
for the results to be interpretable and generalizable. The method used to estimate
reliability should be in line with the ways in which the scores are to be used (Ghiselli
1981 quoted in Flynn 2001).Internal consistency reliability will be used to assess the
consistency of results across items within a test and the method for assessing reliability
of the current study. Typically this will be done either by using Cronbach`s alpha or by
split-halves method where total set of items will be divided in two halves and scores of
the halves will be correlated to obtain an estimate of reliability (Carmines
andZeller1979). The advantage of the internal consistency measures will be that there
will be no need for a second test, and thus they will also widely use in practice. On this
regards Annually will have given guidelines for the accepted alpha levels : early stages
of research = 0.5-0.6, basic research =0.7-0.8, and applied settings =0.8-0.9 and the
alphas for the current study will be presented together with the research results in order
to make the presentation more logical.

3.10. Ethical Consideration

Research ethics will require that researchers should protect the dignity of their subjects and
publish well the information that is researched (Fouka & Mantzorou, 2011). As Schurink
(2005) will point out, research ethics will be a complex matter to which there will be unlikely
to be clear solutions. Schurink (2005) will believe that it will be useful for researchers to
follow a practical approach in which they will ask questions and push themselves hard to
reach answers: “the researcher will need to be honest about the purpose of the research”. As
this study will require the Participation of human respondents, certain ethical issues like
consent and confidentiality will be considered. In order to secure the consent of the selected
participants, all important details of the study, including its aim and purpose will be
explained. By explaining these important details, the respondents will be able to understand
the importance of their role in the completion of the research. With this, the participants will
not force to participate in the research. The confidentiality of the participants wills also
ensured by not disclosing their names or personal information in the research.
22
 CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
Introduction
This chapter presents the result and discussion of empirical findings. The research instrument
used was a survey questionnaire. A fairly representative sample was obtained by employing a
stratified sampling technique. This section is divided into subsections such as the response
rate, demographic characteristics of respondents, descriptive statistical analysis of research
variables, and correlation test, normality of data test, multicollinearity and linearity of data
test. Finally, the result was analyzed using descriptive presented first followed by the
inferential statistics models were applied by the help of statistical software packages (SPSS).
The descriptive statistics analysis that was employed using tables, mean, and standard
deviations in examining KM dimensions as well as organizational performance. The
inferential statistics model was used to identify the relationship between the five KM
dimensions with organizational performance.

4.1 Response Rate

To conduct this study the present researcher in total, 138 questionnaires were distributed to
the research participants of professional employees of MCMDO at Addis Ababa City.

Table 1: Response Rate

Questionnaires Total Percent

Distributed 138 100%
Collected 133 96%
Source: Researcher‘s computation with SPSS

As a result in table 1 above indicate that, from the questionnaires distributed 133 were filled
correctly and returned, In general, the response rate was 96%and it was substantially
sufficient for the study.

4.2. Demographic characteristics of Respondents

Before proceeding directly to a discussion of the result, it would be better to introduce the
respondent's profile. This is because having an understanding of the respondents may help to
estimate the accuracy of the information provided by them. Therefore, for this study

23
demographic characteristics of the respondents such as gender, age, marital status level of
educational, and tenure or work experience were presented as follows.

Table 2: Demographic characteristics of respondents

Demographic Characteristics Frequency Percent
Male 91 68.4
Female 42 31.6
Sex Total 133 100
Married 101 70
Single 32 30
Marital Status Total 133 100
18-30 34 25.5
31-40 66 49.5
41-50 33 25
Age Total 133 100
First Degree 89 67
Educational Level Second Degree 44 33
Total 133 100
1-5 years 105 79
6-10 years 20 15
Tenure Above 10 years 8 6
Total 133 100

Finally, Table 2 above shows that 105 (79%) respondents have between 1-5 years of
experience, 20 (15%) of the respondents have between 6-10 years of experience, and the rest
8 (6%) of the respondents have above 10 years’ experience.

As it is shown in Table 2 above, the data provides the sex profile of respondents by
frequency and percent. The results show that out of 133 respondents, 91 (68.4%) of the
respondents are males and 42 (31.6 %) are female respondents. As depicted in table 5 out of
133 respondents majority of the respondents are married which represent 70 % that is about
101 respondents out of 133 respondents and also 32 out of 133 are single which represent
30% the total respondents. From the data presented in table 5 above, the majority 66
(49.5.5%) of the respondents are between the age group of 18-30 years old, 34 (25.5%) of the
respondents are between the age group of 31-40 years and the remaining 33 (26%)
respondents are under the age group of 41 to 50 years old. Table 5 also shows that from 133

24
respondents 89 (67%) of the respondents are first- degree holder employees, and the
remaining 44 out of 133 or 3% of the respondent are master’s degree holders.

4.3. Descriptive Statistical Analysis of KM dimensions and organizational Performance

4.3.1 Mean and Standard Deviation for Knowledge Acquisition

The study conducted descriptive statistics for the six items of knowledge acquisition and
established that the mean of the first item "The organization scans the external environmental
factors” was 3.75 and the standard deviation was 1.185. The mean of the second item “The
organization undertakes benchmarking with best industry practices” was 3.66 and its
standard deviation was 1.084. The mean of the item “The organization sends employees for
external trainings” was 3.49 and its standard deviation was 1.255.

The mean of the fourth item “The organization invests in Research & Development” was
3.49 and the standard deviation was 1.087. The item “The organization has tasked certain
employees to identify best practices in the industry and share with management” had a mean
of 3.67 and the standard deviation was 1.128. The final item “The organization continuously
identifies competitors‟ practices within the industry” had a mean of 3.50 and its standard
deviation was

1.248. The results suggest that the item “Our organization scans the external environmental
factors (economic, political-legal, socio-cultural and technological factors)” is the most
significant variable that influences knowledge acquisition as presented in Table 6 below.

Table 3: Mean and Standard Deviation for Knowledge Acquisition

Knowledge Acquisition Items Mean Standard Deviation

Our organization scans the external environmental factors 3.75 1.185
(political-legal, economic, socio-cultural and technological
factors)
The organization undertakes benchmarking with best industry 3.66 1.084
Practices
The organization sends employees for external trainings 3.49 1.255
The organization invests in Research & Development 3.49 1.087

25
 The organization has tasked certain employees to identify best 3.67 1.128
practices in the industry and share with management
The organization continuously identifies competitors‟ practices 3.50 1.248
within the industry

4.3.2 Mean and Standard Deviation for Knowledge Creation

The mean for the item “Our organization has established formal networks between
employees and external experts” was 3.48 and the standard deviation was 1.225. The mean
for “The organization supports employees to become members of professional bodies in their
respective fields” was 3.47 and the standard deviation was 1.128. The mean for “The
organization rewards employees to encourage creativity” was 3.75 and the standard deviation
was 1.106. Finally, the mean for “The organization facilitates employee exchange
programmes to other organizations to learn their best practices” was 3.39 and the standard
deviation was 1.213. These results imply that “The organization rewards employees to
encourage creativity” is the most important variable that influences knowledge creation as
shown in table 4 below.

Table 4: Mean and Standard Deviation for Knowledge Creation

Knowledge Creation Items Mean Standard

Deviation
Our organization has established formal networks between 3.48 1.225
employees and external experts
The organization supports employees to become members of 3.47 1.128
professional bodies in their respective fields
The organization rewards employees to encourage creativity 3.75 1.106
The organization facilitates employee exchange programmes to 3.39 1.213
other organizations to learn their best practices

26
4.3.3 Mean and Standard Deviation for Knowledge Conversion
The mean of the item “Uses knowledge acquired to design new products/services” was 3.65
and its standard deviation was 1.110. The mean for “Absorbs knowledge from competitors
into the organization” was 3.68 and the standard deviation was 1.102. The mean for
“Absorbs knowledge from individual employees into the organization” was 3.73 and its
standard deviation was 1.174. The mean for “Absorbs knowledge from customers into the
organization” was 3.73 and the standard deviation was 1.075. The mean for “Absorbs
knowledge from business partners into the organization” was 3.79and the standard deviation
was 1.074. Finally, the mean for the item “Absorbs knowledge from organization’s Suppliers
into the organization” was 3.70and its standard deviation was 1.021.

The results imply that the item “Absorbs knowledge from business partners into the
organization” is the most important variable that influences knowledge conversion as
presented in table 5 below.

Table 5: Mean and Standard Deviation for Knowledge Conversion

Knowledge Conversion Items Mean Standard

Deviation
Uses knowledge acquired to design new products/services 3.65 1.110
Absorbs knowledge from competitors into the organization 3.68 1.102
Absorbs knowledge from individual employees into the 3.73 1.174
Organization
Absorbs knowledge from customers into the organization 3.73 1.075
Absorbs knowledge from business partners into the 3.79 1.074
Organization
Absorbs knowledge from organization’s Suppliers into the 3.70 1.021
Organization

4.3.4 Mean and Standard Deviation for Knowledge Sharing

The mean for “The organization has formalized knowledge sharing processes” was 3.97
while the standard deviation was .976. The mean for “The organization has a
library/Resource center” was 4.04 and the standard deviation was 0.945.The item “The
employees in the organization trust each other (open to one another)” had a mean of 3.75 and
27
the standard deviation was 0.987. The mean for “Knowledge sharing is a key component of
employees‟ appraisal system” was 3.65 and the standard deviation was 0.981. The item
“Knowledge sharing infrastructure and equipment (Internet and intranet) is easily available to
all employees” had a mean of 3.6 and the standard deviation was 1.103. The mean for “New
employees are assigned mentors to help them on personal work and accelerate their learning”
was 3.36 and the standard deviation was 1.083.

The mean for “Employees contribute ideas and thoughts to the organization through online
discussions” was 3.68and the standard deviation was .998. The mean for “Employees hold
brainstorming sessions to come up with suggestions for solving problems in order to improve
current organizational policies” was 3.70and the standard deviation was 0.989. Finally, the
item “Employees share their experiences and knowledge about work with other organizations
in meetings” had a mean of 3.54 and a standard deviation of 1.031. Overall the results imply
that the item on “The organization has a library/Resource center” is the most important
variable that influences knowledge sharing as it had the highest mean at 4.04 as shown in
table 6 below.

Table 6 Mean and Standard Deviation for Knowledge Sharing

Knowledge Sharing Items Mean Standard Deviation

The organization has formalized knowledge sharing processes 3.97 .976
The organization has a library/Resource center 4.04 .945
The employees in the organization trust each other (open to one 3.75 .987
another)
Knowledge sharing is a key component of employees‟ appraisal 3.65 .981
System
Knowledge sharing infrastructure and equipment (Internet and 3.60 1.103
intranet) is easily available to all employees
New employees are assigned mentors to help them on personal 3.36 1.083
work and accelerate their learning
Employees contribute ideas and thoughts to the organization 3.68 .998
through online discussions

28
 Employees hold brainstorming sessions to come up with 3.70 .989
suggestions for solving problems in order to improve current
organizational policies
Employees share their experiences and knowledge about work 3.54 1.031
with other organizations in meetings

4.3.5 Mean and Standard Deviation for Knowledge Storing

The mean for the item “Knowledge is kept in databases/repositories” was 3.50 and the
standard deviation was 1.053. For the item that “The organization has knowledge procedures
manual” had a mean of 3.74 and the standard deviation was 1.112. The mean for “The
organization has established knowledge archival systems” was 3.39 and the standard
deviation was 1.190. This implies that the item “The organization has knowledge procedures
manual” is the variable that most influences knowledge storing in table 7 below.

Table 7 Mean and Standard Deviation for Knowledge Storing

Knowledge Storing Items Mean Standard Deviation

Knowledge is kept in databases/repositories 3.50 1.053
The organization has knowledge procedures manual 3.74 1.112
The organization has established knowledge archival systems 3.39 1.190

4.3.6 Mean and Standard Deviation for Organizational Performance

As per the findings in Table 8 below, it can be seen that the respondents agreed that
knowledge management practices in general influences organization performance as; There
is increased awareness of information that is critical to achieving the organization’s vision
(mean= 3.76). The organizations are better placed to meet competition from other
organizations in tendering for services and managers are more knowledgeable (mean=3.85
and 3.64 respectively). The organizations are delivering a higher quality of service to their
clients, there is increased awareness of information that is critical to achieving the
organization’s mission and learning by individuals has improved (mean= 3.61 and
3.39respectively). Overall the organization is functioning better and managers are making
better decisions (mean= 3.40 and 3.71 respectively). Staff are more skilled (mean= 3.48).
Teamwork has improved (mean= 3.73). Staff are more knowledgeable (mean= 3.40).
29
 In addition, the proportion of operating costs, relative to income, has been reduced and staff
have gained more experience (mean= 3.50 and3.56 respectively). Staff are making better
decisions (mean= 3.59). Knowledge of individuals has become knowledge available to the
whole organization (mean= 3.84). Staff are more innovative and managers are more
innovative (mean=3.54 and 3.80 respectively). Operational processes have improved (mean=
3.7). Operating systems have improved (mean= 3.49).

The findings signify that knowledge management practices in general influences organization
performance in various ways including, knowledgeable employees, better decision making in
the organization, improved service offering to client, reduced operational costs, improved
organizational competitiveness. This is mainly so because there is increased awareness of
information that is critical to achieving the organization’s vision. This concurs with Lee et
al., (2010) who reported that knowledge management encourages an organization’s members
to share knowledge and improves the organization’s efficiency, performance, and
competitiveness. It increases the ability to learn from its environment and to incorporate
knowledge into the business processes by adapting to new tools.

Table 8 Mean and Standard Deviation for Organizational performance

Organizational performance Items Mean Standard

Deviation
Operational processes have improved 3.70 1.131
Operating systems have improved 3.45 1.217
Managers are more innovative 3.80 .872
Staff are more innovative 3.54 1.017
Managers are more knowledgeable 3.64 .963
Staff are more knowledgeable 3.40 1.120
Staff are more skilled 3.48 1.145
Staff have gained more experience 3.56 1.056
Managers are making better decisions 3.71 1.000
Staff are making better decisions 3.59 .949
Teamwork has improved 3.73 .997
Learning by individuals has improved 3.39 1.090
There is increased awareness of information that is critical to 3.76 1.025
achieving the organization’s vision
Knowledge of individuals has become knowledge available to 3.84 1.051
the whole organization
The proportion of operating costs, relative to income, has been 3.50 1.222
Reduced

30
We are delivering a higher quality of service to our clients 3.66 1.054
We are better placed to meet competition from other 3.85 1.164
organizations in tendering for services
We are better placed to meet competition from other 3.54 1.269
organizations for
There is increased awareness of information that is critical to 3..61 1.159
achieving the organization’s mission
We are delivering a higher quality of service to our clients 3.76 1.166

4.4.1 Multiple Regression Analysis of KM dimensions and organizational

Performance

4.4.1.1 Multiple Regression Analysis Assumption tests

Gujarati, D., (2003) stated that the main assumption tests to use multiple regression are
normality test and multi-co-linearity tests. Therefore, the present researcher in this study tests
the above two assumptions and test results on the above assumptions of regression are
summarized and presented in sub-section 4.4.2.1.1 to 4.4.2.1.2.

4.4.1.1.1 Normality Test

To test the assumptions of normality, an analysis of residuals was undertaken. Plots of the
residuals are shown in Figures 2, and 3. The histogram shows a bell-shaped distribution
indicating that the assumption of normality has not been violated. The normal probability
plot of expected cumulative probability against observed cumulative probability also shows
points generally lying close to the straight line indicating that the residuals are approximately
normally distributed thus confirming the conclusions drawn from histogram Figure 2.

31
Figure Figure 12: Histogram of standardized Residuals for organizational performance

32
Figure 3: Normal P-P plot of regression standardized residual for Performance
Agreement

33
 4.4.1.1.2 Multi-co-linearity Test

One of the assumptions of multiple linear regressions is that the independent variables should
not have a very high association or correlation. When the independent variables are highly
correlated, it is regarded as a problem in the model and this problem is called
multicollinearity. Gujarati, D. (2003) stated that the existence of multicollinearity can be
tested by analyzing the values of tolerance and Variance Inflation Factors (VIF). As most
authors have suggested, a tolerance of < 0.10 and/or a VIF >10 indicates a multicollinearity
problem. The results regarding this were summarized and presented in table 9 below.

Table 9: Multi-co-linearity Test for Multiple Regression Analysis

Collinearity Statistics
Independent variables Tolerance VIF
knowledge acquisition .431 2.320
knowledge creation .491 2.036
knowledge conversion .585 1.709
knowledge sharing .764 1.308
knowledge storing .824 1.214

As shown in table 9 above, the results of tolerance for all independent variables were above
0.1 and below 1. Similarly, the results in table 9 revealed that all-variable variance inflation
factors (VIF) values were above one and below 10.Therefore, using the results reported in
table 9, the present researcher can conclude that there was no multicollinearity problem.

4.4.1.2 Multiple Regression Analysis Outputs

Multiple regression models used in an explanatory study where the researcher is interested in
predicting the value of the dependent variable based on the value of independent variables.
While in case of more than one independent variables in the study, the researcher has to use
multiple regression models (Kotari, C., 2004 and Jullie, P., 2005). Thus, the present
researcher employed multiple linear regression analysis to examine the effects of five
dimensions of KM (knowledge creation, acquisition, sharing, storage, and conversion) on

34
 organization performance of MCMDO. The results regarding this are summarized and
presented in detailed in sub-section 4.4.2.2.1 to 4.4.2.2.3

4.4.1.2.1 Multiple regression model on the effect of KM practice on organizational

performance

To examine whether or not dimensions of knowledge management (i.e. knowledge

acquisition, creation, conversion, sharing and storage) have effect on organizational
performance of MCMDO, multiple regression analysis was applied to the data with all five
dimensions of knowledge management included as independent variables and organizational
performance as the dependent variable and output in Table 10 below was obtained. The value
of R square change for the model generated is .479. This means that the independent
variables i.e. knowledge acquisition, creation, conversion , sharing and storage can explain
47.9 % of the variation in the dependent variable of organizational performance of MCMDO.
However, there are 52.1 % of the variance remain unexplained in this study and need further
research.

Table 10: Model summary for KM and organizational performance

Std. Change Statistics

Error
Adjusted R F Sig.
Model R R Square R of the Change df1 df2
F
Square Estimate Square Change
Change
1 .700a .490 .479 .38741 .490 41.190 5 214 .000
a. Predictors: (Constant), KSTORING, KCONVERS, KSHARING, KCRATION,
KNAQUSAT

b. Dependent Variable: ORGPERFOR

4.4.1.2.2 ANOVA model on the effect of KM practice on organizational performance

Table 11 below presents an analysis of variance (ANOVA) to show whether the model used
for research purpose is fit/appropriate or not. The ANOVA gives a highly significant result
35
 (F = 41.190,p = .000), indicating that the model was fit/ appropriate to predict organization
performance using knowledge management practices ( i.e. knowledge acquisition, creation,
conversion , sharing and storage) in MCMDO.

Table 11: ANOVA for KM and organizational performance

Model Sum of Squares df Mean Square F Sig.

Regression 30.910 5 6.182 41.190 .000a
Residual 32.119 214 .150

Total 63.029 219

a. Predictors: (Constant), KSTORING, KCONVERS, KSHARING, KCRATION,

KNAQUSAT

b. Dependent Variable: ORGPERFOR

4.4.2.2.2 Coefficients on the effect of KM practice on organizational performance

Table 12 below indicates the coefficients, demonstrating that knowledge management

practices (i.e. knowledge creation, conversion, sharing and storage) have a significant and
positive influence on organization performance of commercial bank of Ethiopia in Bahir Dar
City Branches.

Table 12: Coefficients for KM and organizational performance

Coefficientsa

Unstandardized Standardized Collinearity

Coefficients Coefficients Statistics
Std.
Model B Erro Beta T Sig. Tolerance VIF
r
1 (Constant) 1.062 .203 5.243 .000
KNAQUSAT -.014 .045 -.022 -.300 .765 .431 2.320

KCRATION .114 .043 .185 2.661 .008 .491 2.036

36
 KCONVERS .127 .052 .155 2.426 .016 .585 1.709

KSHARING .194 .053 .204 3.647 .000 .764 1.308

KSTORING .286 .035 .442 8.224 .000 .824 1.214

a. Dependent Variable: ORGPERFOR

Detail inspection of the regression coefficients of individual predictor variables revealed that
knowledge creation (Beta = 0.185, p < 0.01); this result shows one unit increase in
knowledge creation can result in0.185 increase in organization performance. Knowledge
conversion (Beta = 0.155, p < 0.05); the result can be interpreted one unit increase in
knowledge conversion can result in0.155 increase in organization performance. Knowledge
sharing (Beta =0.204, p < 0.05);the result can be interpreted one unit increase in knowledge
sharing can result in0.204 increase in organization performance. Knowledge storing (Beta =
0.442, p < 0.05); this means that when one unit increase in Knowledge storing can result
in0.442 increase in organization performance.

As shown in table 12 above, it is clear that with the exception of knowledge acquisition, all
independent variables have a significant influence on organization performance of MCMDO.
Moreover, based on the Beta values discussed in the above table, among the five dimensions
of KM, Knowledge storing (Beta = 0.442, p < 0.05) has more effect on organization
performance organization performance of MCMDO. The resulting predictive equation from
the regression model using the standardized coefficient is:

Organization Performance = 1.062+ 0.185 (knowledge creation) + 0.155 (knowledge

conversion) +0.204 (knowledge sharing) +0.442 ( (Knowledge storing)

4.5. Hypothesis Testing

Based on the multiple linear regression results the researcher has proved the statistical
significance and decided on accepting or rejecting the developed hypothesis. Totally, there
were 5 hypotheses developed as explanatory variables in the regression analysis. On the
bases of the standardized coefficient of beta and p-value, the hypotheses of the study were
tested and the results have presented below.

37
Hypothesis 1 stated that Knowledge acquisition significantly and positively influences
organizational performance of MCMDO. As shown in table 12 above, Knowledge
acquisition had no positive standardized beta coefficients and p-value greater than 0.01(Beta
= -.022, p > 0.01). This, therefore, led to the rejection of the hypothesis and concluded that
Knowledge acquisition had no a significant positive influences on organizational
performance of MCMDO.

Hypothesis 2 stated that Knowledge creation significantly and positively influences

organizational performance of MCMDO. Test results in table 12 shows that Knowledge
creation has positive standardized beta coefficients and p-value less than 0.05 (Beta = 0.185,
p < 0.01). Therefore, the hypothesis was accepted and concluded that Knowledge creation
significantly and positively influences organizational performance of MCMDO.

Hypothesis 3 stated that Knowledge conversion significantly and positively influences

organizational performance of MCMDO. Test results in table 12 shows that Knowledge
conversion has positive standardized beta coefficients and p-value less than 0.05 (Beta =
0.155, p < 0.05). Therefore, the hypothesis was accepted and concluded that Knowledge
conversion significantly and positively influences organizational performance of MCMDO.

4.6. Discussion of Results

It is clear from the regression analysis of the study that with the exception of knowledge
acquisition, all independent variables have a significant influence on organization
performance of MCMDO.

The findings of the study indicate that knowledge acquisition did not significantly influence
organizational performance of MCMDO. The results contradict the findings of (Tiwana,
2008) who believed that organizations which subconsciously engage in knowledge
acquisition may fail to realize that, in the process, talents and relationships are lost and
without knowledge retention strategies, organizations continue to lose valuable acquired
knowledge. These results are also in contradiction with Ahmed, Fiaz and Shoaib (2015) who

38
undertook a study to investigate on the effect of knowledge management practices on
organizational performance.

The study found that knowledge creation was significantly influence organizational
performance of MCMDO. This implies that the continuous transfer, combination, and
conversion of the different types of knowledge, as users practice, interact, and learn
positively and significantly influence the performance of organization. The findings of this
study are corroborated with the results established by Bihamta, Nowzari, Eghtebasi,
Subramaniam, Salimi and Salehi (2012) who carried out a descriptive study of the impact of
knowledge creation mechanism on organizational performance on Malaysian automotive
sector. The findings also confirm the research conducted by Cheruiyot, Jagongo and Owino
(2012) that investigated the institutionalization of knowledge management in selected
manufacturing enterprises in Kenya.

As per the present study Knowledge conversion had a significant influence on organizational
performance of MCMDO. This implies that the transformation of knowledge from either
tacit or explicit form so that it is more easily transferable has a significant influence on the
performance of organization. Several studies confirm the findings of this study that
knowledge conversion has a significant influence on organizational performance of state
owned commercial enterprises. For instance, the findings from the current study confirm the
results from the research undertaken by Ahmed, Fiaz and

Shoaib (2015) who sought to examine the influence of knowledge management practices on
organizational performance in the banking sector in Pakistan. The results of the study
observed that knowledge management activities result in provision of quality services to
customers, high customer satisfaction, and efficiency in resource utilization, more profits and
overall improved organizational performance.

Knowledge sharing significantly influenced organizational performance of MCMDO. This

implies that the process by which information, skills, or expertise are passed from one
person, product, routine, or process to another has a significant influence on the performance
of an organization. The results of the current study that knowledge sharing significantly
influenced organizational performance of state owned commercial enterprises confirm the
39
findings of a number of existing studies. These results confirm the findings by Zahari,
Rahman, Othman and Baniamin (2014) who explored the influence of knowledge sharing on
organizational performance among insurance companies in Malaysia by determining how the
implementation of knowledge sharing can contribute significantly to the success of an
organization.

Knowledge storing did significantly influence organizational performance of organizational

performance of MCMDO. This implies that the typical safekeeping of knowledge in the form
of a knowledge repository, which includes documents, reports and databases significantly
influence the organizational performance. The findings correspond with the results by
Gholami, Asli, Nazari-Shirkouhi and Noruzy (2012) who investigated the influence of
knowledge management practices on organizational performance, with focus on small and
medium enterprises in Iran across various industries such as textile, food, auto, electronic and
clothing industries.

CHAPTER FIVE
SUMMARY, RECOMMENDATIONS AND CONCLUSION

Introduction

This chapter presents the summary, recommendations, and conclusions of the study. This
chapter further presents the limitation of the study, the contribution of the study, and areas
for further research.

40
5.1. Summary
The objective of this study was to establish the effect of knowledge management on
organizational performance of MCMDO. The specific objectives were to analyse the
influences of knowledge acquisition, knowledge creation, knowledge conversion, knowledge
sharing, and knowledge storing on organizational performance of MCMDO.

The study was based on descriptive and explanatory research designs and adopted a
quantitative research approach. The target population was the 563 professional employees of
MCMDO. From the total population 220 were participated in the study. Results from
multiple regression analysis revealed that with the exception of knowledge acquisition, all
independent variables have a significant positive influence on organization performance of
MCMDO.

The findings of the study indicate that knowledge acquisition did not significantly influence
organizational performance of MCMDO. These finding contradict with many previous
studies and call for further studies in the area. The study found that knowledge creation was
significantly influence organizational performance of MCMDO.

This implies that the process by which information, skills, or expertise are passed from one
person, product, routine, or process to another has a significant influence on the performance
of an organization. The study further found that Knowledge storing did significantly
influence organizational performance of MCMDO.

5.2. Limitation of the Study

All findings are based on the information provided by the respondents and would be subject
to the potential bias and prejudice of the people involved. Because those participants having
a personal interest in painting a glossy picture. The studies were used only questioner’s data
collection methods because a questionnaire provides a suitable and relatively inexpensive
method for collecting data, but few respondents were unable to reply the questioner’s due
burden of their task as well as unwillingness to fill the questionnaires, as a result, all the
questioners were not collected. Given that the focus of the empirical aspects of this research
was entirely on the organizational performance MCMDO, and given the possibility of KM
Practices differences in different sector, it is entirely plausible that there may be some

41
differences in the findings if this study is replicated in another jurisdiction. Indeed this aspect
is recommended as a potential area for further research.

5.5. Conclusion
In summary, this research has explored empirically, the effect of knowledge management on
organizational performance MCMDO. The study demonstrated that with the exception of
knowledge acquisition, all independent variables (i.e., knowledge creation, knowledge
conversion, knowledge sharing, and knowledge storing) have a significant influence on
organization performance MCMDO. The conclusion that can be drawn from this research is
that knowledge management practices have significant role in enhancing organizational
performance.

5.3. Recommendations
Based on the findings from the present study, the following recommendations are made:

- Based on the findings from the study that knowledge creation influences the
organizational performance MCMDO, the study recommends that management of
commercial bank of Ethiopia as well as other organizations should encourage the
collaboration, practice, education, and interaction as ways of creating knowledge.

- The study found that Knowledge conversion had a significant influence on

organizational performance MCMDO. Therefore the study recommends that
management MCMDO as well as other organizations should consider different
policies and convenient methods for every main knowledge conversion processes so
that it can obtain greatest value from the conversion process.

- The study found that knowledge sharing has an influence on organizational

performance MCMDO. Accordingly, it is recommended that management MCMDO
as well as other organizations should underline that knowledge sharing need to be
supported by strong collaborations and a pervasive culture of sharing among
employees across the organization and its customers and communities.

42
 - The study found that Knowledge storing did significantly influence organizational
performance MCMDO. The study recommends that knowledge within the
organization, with individuals or documented, should be stored for future references
either using soft and hard methods of record. Additionally, both the individual and
organizational knowledge should be stored in a way that is easily retrievable, through
the different methods available such as modern information systems and processes.

5.4. Suggestions for Further Research

Based on findings and the limitations that have been noted, the study suggests further
research in different sector as well as research that compare knowledge management
practices across a wider industry sectors which could provide additional insights, hence
undertaking a research on a wider array of industries in future research could be instructive.

43
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