Innovation in Organizations: A Review of the Role

of Organizational Learning and Knowledge Management

Meeta Dasgupta
R.K. Gupta

This article reviews the role of organizational learning and knowledge management in innovation. An extensive
review of past literature hints that knowledge, although a very strategic resource, is not easy to manage. Ex-
plicit knowledge can be stored in databases or documents but implicit knowledge resides in peoples’ brains. It
is the management of this knowledge which poses a bigger challenge for most organizations. Past research
mentions that implicit knowledge can be managed indirectly by managing various factors which contribute
to an organization’s culture, structure, technology, and leadership. A preliminary model has been proposed
highlighting the role of organizational learning and knowledge management in innovation. The model high-
lights the importance of a flexible and adaptive organization structure, a culture of trust and knowledge shar-
ing, a strong technological network and a committed leadership to promote knowledge development and
learning in the organization which is a prerequisite for innovation and creation of new knowledge. The article
in addition to providing a detailed narrative of literature highlighting the importance of the various factors
identified in the model, also gives practical implications and directions for future research in the area.

Introduction segmentation have reinforced in organiza-

tions the need to differentiate, exploit ad-
In today’s turbulent environment, all organ- vantages derived from selective integration
izations are concerned with demands for of core competencies, and leverage intangible
change—both radical and incremental assets. It calls for an organization that en-
change. Moreover, globalization and market courages experimentation, learns about new

Meeta Dasgupta is a Research Scholar, Management Development Institute, Mehrauli Road, Sukhrali, Gurgaon,
Haryana, India. E-mail: meetadasgupta@hotmail.com
R.K. Gupta is Professor, Organizational Behavior, Management Development Institute, Mehrauli Road, Sukhrali,
Gurgaon, Haryana, India. E-mail: rgupta@mdi.ac.in

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DOI: 10.1177/097215090901000205

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Meeta Dasgupta and R.K. Gupta

practices and technologies, constantly moni- Despite a significant amount of research in

tors the environment, evaluates its own per- the area of knowledge management, organ-
formance, and is committed to continuously izational learning and innovation, little at-
improving its performance. The organiza- tempt has been made to link the three and
tion’s strategies, structure, reward system, translate these findings systematically into
and communication practices must be de- comprehensive review of current knowledge.
signed so as to encourage innovation and Seeing the growing importance of innovation
change. In fact, organizations that string and knowledge, it was felt imperative to
together a series of temporary and adequate review research in the area and propose a pre-
advantages will outperform organizations liminary model. During our search for papers
that stick with one advantage for a long in the area we came across two related re-
period of time. views. The first review ‘Networking and
As global competition intensifies and prod- Innovation: A Systematic Review of the
uct life cycle shortens, the pressure to in- Evidence’ by Pittaway et al. (2004) has high-
novate heightens. Achieving low cost coupled lighted the importance of networking with
with high quality are just the qualifying criteria various stakeholders for promoting the
and might not be the winning criteria. Critical creation of knowledge and innovation. The
second review ‘The Impact of Culture on Best
to growth in most sectors is the combination
Practices Production/Operations Manage-
of launching new products and services, en-
ment’ by Hope and Muhlemann (2001) has
tering lucrative markets, creating new com-
highlighted the importance of culture and the
petitive advantages, and deploying new
human resource management practices for
business models. Sustainable development
inculcating a knowledge sharing atmosphere
cannot happen without innovation. The chal-
in the organization. Though both the review
lenge before every organization is to develop
papers have made an important contribution
innovation strategies that not only respond in synthesizing research in the area, this paper
to changes in the environment and societal aims (a) to make a comprehensive review of
pressures but also consider the needs and ex- past research and highlight all factors which
pectations of various stakeholders. form the backbone of learning and know-
The increasing turbulence in the external ledge management efforts of an organization;
business environment has focused attention (b) analyze the contributions of all these fac-
on the resources and organizational cap- tors to innovation in organizations; (c) con-
abilities as the principal source of competitive sider the implications for future research
advantage. Knowledge has emerged as the agendas in this field.
most strategically significant resource for the The paper is organized in the following sec-
firm. The ability of organizations to differ- tions. The Methodology section is followed by
entiate themselves depends on how efficiently the section, Expanse of Past Research, which
they integrate their innovation management highlights all factors which promote organ-
practices with their knowledge management izational learning and knowledge manage-
practices so as to harness knowledge for ment and analyzes their contribution to
innovation. innovation. The following section, Overview

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of Reviewed Articles/Research Papers, presents implicit knowledge can be managed indir-

a synopsis of the impact of organizational ectly by managing various factors which con-
learning and knowledge management. The tribute to an organization’s culture, structure,
paper’s concluding sections, Practical Implica- technology and leadership (see Figure 1).
tions and Directions for Future Research, discuss The conceptual model presents that both
the practical implications of the findings and organizational learning and knowledge man-
suggestions for future research in the field. agement reinforce each other so as to stimu-
late the innovation process which leads to
creation of new products and services or im-
Methodology provement in the existing products and pro-
cesses. It also leads to the creation of new
Journals Reviewed
knowledge from constant efforts to experi-
The articles/research papers included in this ment. New knowledge is created irrespective
article were identified through a search made of the success or failure of the innovation pro-
using the search engines of electronic data- cess and serves as a learning ground for sub-
bases such as EBSCO, ABI Inform, and sequent innovation efforts. Knowledge flows
Emerald Full Text using search strings like from the user, and the outcome of the innov-
organizational learning and innovation, and ation process when integrated with existing
knowledge management and innovation. The knowledge lead to further innovation. Struc-
search was restricted to the last 10 years rang- ture, culture, technology, and leadership form
ing from 1997 to 2007. This article assessed the backbone of an organization’s effort to
the role of organizational learning and know- learn and manage knowledge effectively.
ledge management in innovation as ad- What aspects of each of these contribute to
dressed by 90 articles, published in various innovation has been presented in detail in the
academic journals. following review of existing literature.
The Appendix mentions the list of journals The conceptual model proposed is a pre-
selected in the final sample. liminary effort to present all possible relation-
ships between the different components. The
bidirectional arrows leading to each of these
Expanse of Past Research boxes show that structure, culture, technol-
ogy, and leadership promote each other to
Proposed Conceptual Model create a synergy effect on organizational
learning and knowledge management.
An extensive review of past literature hints
that knowledge, although a very strategic Innovation
resource is not easy to manage. Explicit know-
ledge can be stored in databases or documents Innovation is typically understood as the
but implicit knowledge resides in peoples’ successful introduction of something new
brains. It is the management of this know- and useful, for example, introducing new
ledge which poses a bigger challenge for most methods, techniques, practices, or new or
organizations. Past research mentions that altered products and services. Innovation has

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Meeta Dasgupta and R.K. Gupta

Figure 1
Conceptual Model based on Literature Review

Source: Proposed by the authors.

been described ‘an idea, practice or an object systemic and effective management approach
that is perceived as new by an individual or based on knowledge and learning. The ability
other unit of adoption’ by Rogers (cited in to absorb and integrate newly acquired know-
Steele and Murray 2004: 316). Innovation is a ledge with the existing knowledge leads to
learning process in which valuable ideas are the creation of new knowledge and is the key
transformed into new forms of added value to improvement and innovation.
for the organization and its stakeholders. According to Christines Soo, ‘Innovation
The innovation spiral comprises of individual is a mixture of process and product outputs
and social learning at the workplace, know- that include new or modified products and
ledge creation, and innovation. services, patents, new marketing techniques,
Innovation is considered vital for its contri- new managerial tools and administrative pro-
bution to business performance. The salience cesses, licenses and wider thought leader-
of innovation is underlined by the fact that ship represented by things like presentations
in an increasingly hostile market environ- at conferences and publications’ (Soo et al.
ment, it represents a means of survival, and 2002: 4).
not just growth. Sustainable innovation which Innovation is a prerequisite for competitive
leads to competitive advantage, requires a advantage. Product innovation is a form of

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innovation where a new product is created, To meet social and economic challenges in the
while process innovation is a form of innov- environment an organization must have a
ation where an efficient method of production broad spectrum of competence, including
is achieved due to the application of new their ability to foster the acquisition of know-
ideas to existing processes. Radical innov- ledge. It is through learning that an organiza-
ation leads to drastic changes in modus tion is able to increase the depth and diversity
operandi while incremental innovation leads of knowledge. In fact, the higher the learning
to step-by-step improvement. ability of a firm, the higher is the level of com-
The process of commercializing innovation pany’s competitiveness, innovativeness and
has been categorized by Roberts (1988) to in- product introduction success (Yeung 1999).
clude ideas of creation, initial application, According to Dodgson (1993), ‘Learning is
feasibility determination, and final applica- seen as purposive quest to productivity and
tion. Another important aspect of organ- innovativeness in uncertain technological and
izational innovation is that it should be in market circumstances. The greater the un-
alignment both with the needs of the organ- certainties, the greater the need for learning.’
ization and the market place. (as cited in Gieskes and Heijden 2004: 110).
According to Maidique (1980) and Rogers From a sociological perspective, organ-
izational learning is viewed from the point
(1995), people are champions and change agents
of effect of power structures and hierarchy,
who bring about change by interacting with
conflict, ideology, and rhetoric (Smith 1999).
each other and by networking within and
From a strategy perspective organizational
across organizations. Regulating this phe-
learning addresses issues of competitiveness
nomenon through knowledge management
by focusing on organization–environment
and organizational learning will foster
interaction, different levels of learning and
innovation.
knowledge networks. Cultural anthropology
Organizational Learning addresses the system by focusing on culture
as the cause and effect of the learning system.
The only way to cope with a changing world is to The different perspectives of organizational
keep learning. (Dixon 1998) learning are summarized in Table 1.

Table 1
Perspectives on Organizational Learning

Perspective Characterization: Learning is...

Information-processing perspective Increasing and improving knowledge through processing information
Contingency perspective Adapting to changes in environment
Psychology perspective Continuous and concerted sharing of assumptions in the context of
collective action
Systems-dynamics perspective Developing understanding of the complex causalities of social reality
Strategic perspective Building unique competencies for competitive advantage
Production-management perspective Improving efficiency through experience

Source: Gieskes et al. (2004).

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Meeta Dasgupta and R.K. Gupta

The process phases of learning are de- Wilson (2007) introduced a new perspec-
scribed in terms of four steps (Nonaka 1991): tive of learning: learning from and learning with
each other. In the former the stakeholders

The identification of information that learn things that are already known to others
seems relevant to learning and the cre- from whom they are learning. In other words,
ation or generation of new knowledge. this involves a recycling of existing know-

The exchange and diffusion of know- ledge. Learning with is a collaborative and
ledge either from the individual to the active process which involves creation of new
collective level or at the collective level knowledge. However reflection at work upon
itself. the learning processes is very important to

The integration of knowledge into ex- stimulate innovation and improvements in
isting knowledge systems at a collective processes.
level or an individual level or both, or
into procedural rules of the organiza- Knowledge Management
tion, whereby either integration or adop-
Knowledge Management is a system that
tion of a system can take place.
pro-motes collaborative environment for cap-

The transformation of new know-
turing and sharing existing knowledge,
ledge into action and the application of
creates opportunities to generate new know-
the organizational routines so that it
ledge, and provides the tools and approaches
has an effect on the behaviour of the
needed to apply what the organization
organization.
knows in its effort to meet its strategic goals
(Gorelick and Monsou 2006).
Huber (1991) regarded the organizational
To the organization, knowledge is defined
learning process as consisting of knowledge
as what people know about customers, prod-
acquisition, distribution, interpretation, and
ucts, processes, mistakes, and successes
memorization. Anderson and Boocock (2002)
(Grayson and O’Dell 1998). It either resides
and Nonaka (2000) suggest that the key in databases or is accumulated through the
elements that encourage learning are the sharing of experiences and best practices, or
channels of communication which encourage gathered from other sources both internal
individuals to make enquiry rather than rely and external to the organization.
on inaccessible tacit knowledge. Several authors, however, underline that
There are different learning styles, and it is not existing knowledge in a firm that is
research by Yeung, Ulrich, Nason, and Glinow the source of competitive advantage. It is the
(1999) noted that preferred learning styles ability to apply that knowledge effectively
were related to strategic options. Companies to create new knowledge. According to
with product differentiation strategy pre- Albino, Garavelli and Schiuma (2001)
ferred to use experimentation, continuous im- ‘Following this perspective, organizational
provement, and competency acquisition as knowledge and its management are strictly
learning methods, while, companies with a connected to organizational learning–
cost competitiveness strategy learnt through unlearning and innovation’ (as cited in Massa
continuous improvement and benchmarking. 2004).

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 Innovation in Organizations
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A firm’s knowledge is dependent not only innovate—either through improved pro-

on its internal learning activities, but also on cesses or improved products and services.
the learning activities of various actors out- According to Alavi and Leidner (2001)
side the firm (Coehn and Levinthal 1990). knowledge can be viewed from five different
Krugman and Obstfeld (2000) maintain that perspectives (see Table 2).
externalities stemming from the accumulation
of knowledge are more important for innov- Culture
ative activities (as cited in Andersson and
Organizational culture can be defined as the
Ejermo 2005).
deeply seated (often subconscious) values
A knowledge management strategy of an
and beliefs shared by personnel in an organ-
organization can be categorized as either ization. It is manifested in the typical charac-
codification strategy or personalization strat- teristics of the organization. According to
egy. As per the personalization strategy, researchers like Hellreigal, Smith, and Cronje,
knowledge is closely linked to the person who ‘The components of routine behaviour,
developed it and is shared mainly through norms, values, philosophy, rules of the game
direct person-to-person contacts. Conversely, and feelings all form part of organizational
codification strategy means that knowledge culture’ (as cited in Martins and Terblanche
is carefully codified and stored in databases 2003).
from where it can be accessed and used read- Managing and Developing Intellectual Capital:
ily by anyone in the company (Liao 2007). According to some works by Nonaka (1994),
In fact, through knowledge management, organizations that are able to stimulate and
managers are able to ask for updated infor- improve the knowledge of their human cap-
mation and use preprogrammed models ital are in a better position to face the rapid
based on integrative knowledge of past ex- changes in the environment and to innovate
periences, consider alternative solutions, and in the domain where they decide to invest and
stimulate innovative proposals. Managers can compete. The problem solving capabilities of
anticipate problems better, experiment, and knowledge workers lie in their education
innovate. The impact of knowledge man- background, professional training, creativity,
agement systems on performance relates and motivation. Approved and focused train-
primarily to the organization’s ability to ing programmes help in the production of

Table 2
Perspectives on Knowledge

Perspective Characterization: Learning is...

State-of mind perspective Emphasizing knowledge and understanding through experience and study
Object perspective Defining knowledge as a thing to be stored and manipulated
Process perspective Focusing on knowing and acting
Condition perspective Emphasizing access to knowledge
Capability perspective Viewing knowledge as a capability with the potential for influencing future action

Source: Rezgui (2007).

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Meeta Dasgupta and R.K. Gupta

new knowledge which thereby leads to innovation is applicable. Organizational

innovative solutions and the management of characteristics, such as job rotation, inter-
change (Egbu 2006). Additionally the enjoy- divisional teams, and delegation of responsi-
ment in helping others and knowledge self- bility, that promote adaptive learning also
efficacy are strongly associated with the promote innovation (Lundvall and Nielsen
employees’ willingness to share knowledge. 2007; Nederhof et al. 2002). It also ensures that
A sense of confidence and competence pro- partners are seamlessly integrated in a supply
vides stimulus to employees to share know- chain and are constantly learning with an aim
ledge (Lin and Kuo 2007). A supportive and to produce innovation and creativity.
nurturing environment motivates employees A participatory type of culture that which
to communicate with each other. Moreover is flat, has open communication channels, en-
incentive schemes and rewards for sharing courages participation and involvement in
knowledge are important mechanisms to decision making, enhances sharing of infor-
encourage employees to share information mation, is conducive to a good knowledge
and experiences with each other. It not only management practice, and promotes innov-
enhances the organizations knowledgebase ation (Rezgui 2007).
but also enhances the spirit of teamwork. It Changing Mind-Set of People and Inculcating
also helps employees understand where they
Trust: The main functions of culture are inter-
fit into the collective dimension of the work-
nal integration and coordination. Integration
place (Hsu 2006; Rezgui 2007). The learning
might be defined as the feeling of identity
climate would promote creation, transfer, and
among personnel and commitment to the
implementation of knowledge to the work-
organization. The coordinating function on
place routines and processes (Shipton, Fay,
the other hand can be defined as creating a
West, Patterson, and Birdi 2005).
competitive edge. A very important com-
If organizations are to deliver value
through innovation, they need to be prepared ponent of a corporate culture is the element
to provide adequate time to their employees of trust among employees. The more the
to reflect and provide relevant knowledge employees trust each other, greater the pos-
needed for appropriate innovations. Reflec- sibility that they would interact and share
tive practice and transformation and combin- knowledge with each other.
ation of existing knowledge are fundamental Global collaborations are characterized
ways in which new knowledge can be pro- by cultural and linguistic diversity where
duced (Egbu 2006). employees from different cultures tend to
Developing a Learning and Participative interpret processes and share information
Climate: Mullen and Lyles (1993) suggest that differently. Several studies (Cox 1993;
‘continuous organizational learning will Hambrick and Mason 1984; Jackson, May, and
improve the efficiency and effectiveness of the Whitney 1995) have found that multinational
firm’s innovation’ (as cited in Ju et al. 2006). corporations in order to mitigate the negative
A learning culture encourages organizations effects of cultural diversity while exploiting
to question not only the information they the variances in ideas and innovation, use
process but also whether their approach to cross-functional, multi-functional project and

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management teams with ethnic, demo- organization is for the maximum ideas to be
graphic, and technical diversity (as cited in caught and examined. A prerequisite for an
Persaud 2005). innovative organization is a means for com-
However, research has shown that organ- munication and exchange of ideas at all levels.
izations having a high degree of cohesiveness Cross-functional communication enables
or clan culture are less likely to be receptive people to become involved in all parts of the
to new and innovative information (Brockman organization and makes innovation useful for
and Morgan 2006). Such organizations are everyone. Heterogeneity of knowledge,
immersed in loyalty and tradition rather than know-how, and expertise available can in-
entrepreneurship and risk. crease the creativity level of employees
Another important element introduced by (Rodan and Galunic 2004).
Krogh (1998) is care in organizational rela- Distance can influence the probability of
tionships. According to him, ‘when there is communication and the probability of com-
care in organizational relationships there will munication decreases with increasing dis-
be mutual trust, active empathy, access to help tance. Therefore an organization should
among team members, lenient judgment to- optimize the distance between its employees
wards participants in the team, and courage.’ through efficient space management (Huang,
This would further stimulate the creation of
Wei, and Chang 2007).
knowledge and innovation.
An organization is answerable to its many
Effective Communication: Several years ago
stakeholders who are outside the organization.
when Steve Jobs was asked what the seed of
Knowledge gained by communicating with
the distinctive innovative ability at Apple was
various stakeholders and an integration of
he replied, ‘Apple is a very disciplined com-
that knowledge with the existing knowledge
pany and we have great processes. But that’s
of the organization leads to sustainable
not what it’s about. Processes make you more
efficient. But innovation comes from people innovation and thereby, increased competi-
meeting up in the hallways or calling each tiveness and growth. It also helps an organ-
other at 10:30 in the night with a new idea, or ization develop its dynamic capabilities
because they realized something that shoots which reflect its capacity to develop new and
holes in how we’ve been thinking about a innovative forms of competitive advantage
problem. It’s ad hoc meetings of six people and synergistic innovative capability (Ayuso
called by someone who thinks he has figured et al. 2006; Persaud 2005). Miller et al. (1997)
out the coolest new thing ever and who wants in their research found that knowledge inte-
to know what other people think of his idea’ gration equipped with managerial oppor-
(Fliaster and Spiess 2007). Cross-functional tunities enabled by new information and
communication and cooperation is con- communication technologies has shifted com-
sidered to be a vital element to respond to petitive advantage away from large, vertically
repeated changes in the environment integrated firms, moving it to electronically
(Calabrese 1999). networked clusters of small, vertically inte-
The main purpose behind establishing an grated, specialized, and regionally based
effective communication network within the firms (as cited in Lin and Chen 2006).

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Meeta Dasgupta and R.K. Gupta

Many studies have confirmed customer the organization rather than reinventing the
knowledge as one of the most critical know- wheel time to time. However, the explicitness
ledgebases of an organization and there is and modularity of knowledge determines the
considerable interest in the concept of co- extent to which knowledge can be integrated
production or co-creation either as individuals with the existing knowledgebase, thereby
or through communities so as to increase increasing the knowledge capability and the
innovation and business performance. The learning capability of the organization. Or-
emphasis on interacting with customers and ganizational memory, however, can both
co-producing, extending to co-learning shifts enable and inhibit organizational learning.
focus, from collection of data and information While on the one hand, learning in decision
for learning about customers to learning with making takes place by referring to past suc-
customers (Rowley et al. 2007). A market- cessful/failed decisions, on the other hand,
oriented firm appreciates and understands it might prevent decision makers from taking
the present and future needs of customers decisions on aspects which were not present
and is therefore in a better position to deliver in the past.
customer value. Similarly, knowledge shar-
ing with suppliers increases the probability Technology
of collaborative innovation (Mei and Nie
2007). The world has entered the Knowledge Age
Strategic communities formed with stake- where information technology has trans-
holders both internal and external, can also formed the world into an Information High-
help an organization respond to dynamic way Network. Information technology, if
changes in the market and technology envir- used well by organizations, may increase
onments and thereby create new knowledge product quality, improve workflows, enable
(Kodama 1999, 2005). The acquisition of new organizations to respond to customers, and
community knowledge enhances community improve communications with customers
competencies, and enhanced competencies, in and suppliers.
turn, inspire acquisition of additional new Technology has become a great enabler of
community knowledge (Kodama 2001). organizational learning and knowledge man-
Additionally, informal networks which are agement as the technical systems within an
composed of social and personal relationships organization determine how knowledge
among individuals lead to knowledge inte- travels throughout the enterprise and how
gration and increased competitive advantage knowledge is accessed. Ettlie and Bridges
(Awazu 2004). (1983) suggest that technology policy reflects
Organizational Memory: The importance of the innovative attitude of an organization and
organizational memory in the organizational its commitment to innovation. It involves
learning process indicates that the existing such things as recruiting technical personnel,
knowledgebase of a company has wide im- committing funds for new technological
pact on the organization’s ability to learn. An development, and maintaining a tradition of
organization should, therefore, create a cul- being at the forefront of a technological area
ture of exploiting the existing knowledge in in a particular industry.

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 Innovation in Organizations
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Technology tools like intranets, database, Structure (Flexible and Responsive to Change)
etc., or non-technology tools like brain-
storming and research collaboration, enable Structure can be defined as the rules, policies,
a firm to exploit and apply knowledge, procedures, processes, hierarchy of reporting
thereby increasing chances of innovation. The relationships, incentive systems, and depart-
systematic approach to storage, retrieval, mental boundaries that organize tasks within
interrogation, and analysis of data also pro- the firm (Gold, Malhotra, and Segars 2001).
motes continuous improvement (Barber et al. All organizations are experiencing a business
2006; Hsu 2006). Through a conversion of environment which is characterized by rapid
knowledge from the implicit to the explicit change. Adaptable organizations foresee
firms can improve their chances of sharing problems and opportunities and devise
knowledge and improve innovation perform- timely solutions and new routines. Adapt-
ance. Information management promotes ability requires looking outside the organ-
innovation by improving the innovator ’s ization for new technologies and ideas and
ability to collaborate with one another and bringing about a change in its internal
search for relevant information and know- routines. Market-oriented firms are more
ledge. Enterprise Resource Planning, a innovative as, they are more responsive to the
technological tool, is an efficient system of changing needs of the customers. A strong
integrating best practices and transferring market orientation reflects a thorough under-
them to adopting organizations with the help standing of the needs of the customers and
of human interactions. On the other hand, also the competitive situation. Organizations,
information technology might stifle innov- should no longer guard their knowledge in
ation by standardizing and automating ex- pyramidal structures, but should form learn-
isting processes and workflows. Therefore ing networks which span geographical loca-
companies need to understand the right tech- tions and organizational boundaries. This
nological competency that would promote would enable them to be more agile and re-
innovation (Gordon and Tarafdar 2007). sponsive to innovations.
A Knowledge Management System (KMS) Formalization refers to the extent to which
that evolves through continuous feedback jobs within the organization are standardized.
from application of improvement processes If a job is highly formalized the incumbent
demonstrates that the organization and the does not have much discretion regarding
individuals learn from its learning. The design what job is to be done, how it is to be done,
of the knowledge management system also or when it is to be done. Centralization refers
facilitates future changes, updates, and add- to the extent to which all decision making
itions to the process models which are rele- powers are concentrated in an individual,
vant to the business of the organization unit, or level (which is usually higher up in
(Barber et al. 2006). the organization), thus permitting employees
Mentioned below are few of the tech- usually lower down in the rung minimum
nology tools for knowledge management inputs into the job which they do. Autonomy,
(see Table 3). on the other hand refers to the degree to which

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Meeta Dasgupta and R.K. Gupta

Table 3
Technology Tools for Knowledge Management

Tool Category Tool

Hardware Technology Investment in information technology (IT)
Networks
Intranet
Software and Database Tools Knowledge based systems
Collaborative hypermedia for documentation of discussions
Learned lessons databases
Data Warehouses
Databases for classification, codification and categorization of information
Storage of e-mail threads to create a repository of best practices
Corporate memory databases also known as knowledge archives
Corporate Yellow Pages
Employee home pages on an intranet
Collaboration Tools Electronic meeting systems
Groupware
Video conferencing
Electronic bulletin boards
Intelligent tools Decision support tools using neural networks
Virtual reality
Genetic algorithms
Intelligent agents
Internet search engines
Knowledge mapping

Source: Bollinger and Smith 2001.

a unit can make or influence strategic or oper- centralized or technocratized organization

ational decisions affecting it by various value structure, would promote innovation. Con-
added activities, including production, mar- versely, a codification strategy would be
keting, human resources, budgets, and R&D. effective only with a technocratized organ-
(Askawa 1986; Brooke 1984; Mintzberg 1979). ization structure (Liao 2007).
According to Collins et al. (1988) a concentra- It is universally recognized that the learn-
tion of scientific and technical knowledge, ing process in any organization results in the
called technocratization is critical for innov- inherent logic of change. Change to cope with
ation. Professional people are in a better posi- changes in the environment is always faced
by resistance and hardened mind-sets of the
tion to respond to changes and be competitive
management. According to many researchers
(Liao 2006). However, the impact of know-
the answer to this problem lies in continu-
ledge management strategy on innovation ously leveraging and upgrading the know-
cannot be effective until and unless it is ledgebase within an organization. This is
aligned with the organization structure. Per- done by fostering a climate of learning in the
sonalization strategy, in conjunction with a organization (Smith 1999).

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The ever increasing rates of change in the Past research has found that a high quality
environment, shortened product life cycles, of relationship between the leader and the
and changing customer demands have trans- subordinates includes providing challenging
formed the product development life cycle into tasks to subordinates, supporting them in
a learning process. Learning enables a com- risky situations, and also providing rec-
pany to attain speed and flexibility. Verganti ognition for the tasks. This, no doubt, encour-
(as cited in Nederhof et al. 2002) after examin- ages individual innovativeness and better
ing the product planning cycle concluded subordinate and superior relationship. An
that, systematic learning from past experi- efficient leader, in order to encourage employ-
ences is the real keystone in the early phases ees to provide new ideas and to implement
of product development process. Managers them, should not only serve as a role model
in a learning organization are capable of strat- for the subordinates but also communicate an
egic reviews regarding changing business en- explicit vision of innovation, give subord-
vironment, product portfolio, and market inates sufficient autonomy to determine
positioning (Mohanty and Deshmukh 1999). independently how to do a job, be supportive
According to Massa and Testa (2004) in a subordinates’ quest for innovation, pro-
benchmarking is a learning process which in- vide feedbacks to employees and show ap-
volves comparison of internal processes and preciation for innovative performances (Jong
practices with industry best practices, iden- and Hartog 2007).
tification of knowledge gaps, and bridging of Top management support is another im-
those knowledge gaps either through ac- portant aspect that encourages employees to
quiring new resources or by leveraging of the share knowledge (Bustamante 1999). Accord-
current resources. ing to Quinn (1985) and Nonaka and Takeuchi
(1995), it is very essential for management to
Leadership realize the relevance of learning and develop
a culture that encourages acquisition, cre-
A strong leader is required at each layer of ation, and transfer of knowledge as funda-
the organization. It is very important that the mental sources of innovation (as cited in Lin
organization elevates leaders who demon- 2008).
strate innovative thinking, who take action
and execute strategies within their own
Overview of Reviewed
organization, and who promote knowledge
management. According to Basadur (2004), Articles/Research Papers
‘In future business the most effective leaders
However, in assessing directly the impact of
will help individuals... to coordinate and
knowledge management and organizational
integrate their differing styles through a
learning on innovation, since it is interlinked
process of applied creativity that includes
to a lot of organizational activities, there is
continuously discovering and defining new
always a possibility of reaching to a very
problems, solving these problems and imple-
simplistic conclusion. Since the impact of
menting new solutions’ (as cited in Jong and
organizational learning and knowledge
Hartog 2007).

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216
Meeta Dasgupta and R.K. Gupta

management on innovation has been re- to manage tacit knowledge which is in the
searched through various factors which minds of the knower, an organization needs
promote a learning and knowledge environ- to manage its structure, culture and processes
ment and consequently promote innovation, so as to promote an environment of learning
an attempt has been made to categorize the and creativity. The corporate culture, struc-
research into four broad areas—structure, cul- ture, processes and the technology network
ture, technology and leadership ( as also evi- of the organization are intellectual capital of
dent from the Conceptual Model-Figure 1). A the company, which give the company in-
synopsis of the impact of knowledge man- ternal strength. An organization’s tacit know-
agement and organizational learning as ledge is embedded in these and a company
addressed in this article has been presented in order to promote innovation should not
in Table 4. only manage knowledge of its employees but
also its culture, structure and processes. An
Practical Implications organization should also inbuilt a system of
continuous learning and make attempts to
The organization structure, organizational improve the competencies of its knowledge
culture, technology and leadership skills are workers.
the four pillars which support knowledge
management and organizational learning
efforts of an organization. Innovation, which Directions for Future Research
is application of new ideas to create value, is
difficult to achieve without a sound know- The importance of innovation cannot be
ledge base. However, since it is very difficult debated any longer. Similarly, the significance

Table 4
Factors Promoting Organizational Learning and Knowledge Management which Lead to Innovations

Factors Role of Organizational Learning and Knowledge Management

Structure
Benchmarking with industry best practices to improve internal and external performance,
Massa (2004)

Rewards & Recognition Yeo (2003), Hsu (2006)

Flexible Structure and Adaptability to Change, Mohanty (1999), Walczak (2005), Herrmann,
Tomczak and Befurt (2006), Liao (2007), Prajogo & Sohal (2004), Hsu (2006), Yolles (2000).

Networks and knowledge gained from stakeholders, Massa et al. (2006), Salavou, Baltas and
Lioukas (2004), Awazu (2004), Correia (2006), Subramanium & Youndt (2005), Fliaster and Spiess
(2007), Maqsood et al. (2007), Boschma & Wal (2007), Mei & Nie (2007), Todtling, Lehner &
Trippl (2006), Rodan & Galunic (2004), Dhanraj & Parkhe (2006)
Culture
Human Resource management (Job rotation, inter-divisional teams, delegation of authority,
employee satisfaction), Ahmed (1998), Lundvall & Nielsen (2007), Lin (2007), Shipton (2005),
Gieskes & Heijden (2004), Lin and Kuo (2007), Martins and Terblanche (2003), Javier, Montes,
et al. (2003), Goh (2005)

(Table 4 continued)

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 Innovation in Organizations
217

(Table 4 continued)

Factors Role of Organizational Learning and Knowledge Management

Long Term Learning, Alstrup (2000)

Open Communication within organization, Mohanty et al. (1999), Bustamante (1999), Calabrese
(1999), Persaud (2005), Lin & Chen (2006), Johnston & Paladino (2007) and outside Subramaniam
(2006)

Learning Climate and Participatory Culture/Care promoting trust, Rezgui (2007), Maqsood
Walker & Finegan (2007), Bollinger & Smith (2001), Lin (2008), Krogh (1998), Chang (2007), Hsu
(2006), Suh Sohn & Kwak (2004), Berends, Bij, Debackere & Weggenian (2006), Leiponen (2006)

Development of Knowledge Workers through training and development programmes, Carneiro
(2000), Egbu (2006), Mavondo, Chimhanze & Stewart (2006), Shipton et al. (2005)

Learning Communities Rowley, Teahan & Leeming (2007), Kodama (2001,2005), Huang, Wei &
Chang (2007), Yacine (2007)

Knowledge self-efficacy and enjoyment of helping others; Level of education of employees,
Lin (2007), Ordaz, Lara & Cabrere (2005), Sousa (2006)

Changing mindset of people, Smith (1999), Sheng & Sun (2007), Teare & Monk (2002),
Majchrzak, Cooper & Neece (2004)

Current Knowledge Base and Knowledge Integration with Current knowledge, Ju et al. (2006),
Carol et al. (2006), Nederhof et al. (2002), Subramaniam (2006), Johnston & Paladino (2007),
Mei & Nie (2007)

Shared Vision, Liao (2006)
Technology
Importance of technology in knowledge transfer and knowledge sharing, Bustamante (1999),
Lee et al. (2007), Stoddart (2001), Kevin et al. (2006), Jin (1999), Barber, Hernandez & Keane
(2006)

Importance of IT competencies in promoting information and knowledge management,
collaboration and communication and business. Gordon & Tarafdar (2007), Fink & Gurion
(2007), Goh (2005), Su, Sohn & Kwak (2004)
Leadership
Committed leadership and strategic alignment, Chermin & Nijhof (2006), Jong and Hartog
(2007)

Top Management support, Bustamante (1999), Lee et al. (2007), Stoddart (2001), Kevin et al.
(2006), Lin (2007)
Source: Created by authors.

of knowledge as a resource critical for innov- studying the impact of organizational

ation and growth has been recognized. There- learning and knowledge management
fore, the area of organizational learning, on innovation in technologically inten-
knowledge management, and innovation has sive industries. The study can be ex-
a high potential for research. A content an- tended to other sectors which would
alysis of the various research papers has make the findings more generalizable.
revealed various research areas. These are
Gaps in technology research: Though
summarized as follows: literature mentions the importance of
internets and intranets to promote

Studies in other industries: In the past communication, it is silent on the speed
there has been an over-emphasis of of application. The extent to which

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218
Meeta Dasgupta and R.K. Gupta

complexities in processes can hinder the innovation. But the extent to which com-
implementation of an efficient know- mon beliefs and shared opinions might
ledge management system and conse- stifle creativity and innovation is an area
quently affect the creativity process has which deserves a deeper analysis.
also not been researched extensively.
Balance between implicit and explicit
More studies regarding how technology knowledge: The importance of implicit
and subsequent standardization of work and explicit knowledge has been
processes might stifle innovation would presented in literature. However, what
be helpful for companies to decide the kind of knowledge, implicit or explicit
right level of technological superiority. or a balance of both, is important for pro-

Importance of un-learning in innov- moting innovation is also not clear and
ation: Innovation in products and pro- deserves a deeper analysis.
cesss not only involves creation of new
Re-use of knowledge: How knowledge
capabilities but also un-learning or
is re-used to promote innovation and the
forgetting old capabilities. This area has
knowledge created is integrated or em-
not been researched much and has
bedded in products and services so as
ample scope for research. Additionally,
to develop new products and services
how organizational memory might
is another area of potential research.
hinder the learning process is an area
which needs to be explored. How know-
ledge is re-used to promote innovation Conclusion
is another area of research.
After perusal of the various articles and re-

Importance of competition: Organiza-
search papers we can conclude that organiza-
tions react differently to different levels
of competition. The impact of competi- tional learning and knowledge management
tion on innovation and the subsequent are extremely critical for an organization to
impact on learning and knowledge man- be adaptive and to respond to changes in the
agement is another area which has environment. An organization that effectively
potential for research. Does increased manages knowledge will also be a learning
competition lead to increased efforts organization. People and knowledge are the
by organizations to innovate? Does building blocks, from which new knowledge
competition impact the learning and is created. Learning supported by knowledge
knowledge management efforts of an management is the mechanism that increases
organization? the depth and diversity of knowledge. A

Negative effect of culture: Literature knowledge management strategy which is in
has brought out the importance of social alignment with the organization structure,
networks and close ties among the em- culture, processes, and technology infrastruc-
ployees of an organization to promote ture fosters innovation and creativity.

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The Journal of Information and Knowledge management, Knowledge Management’, Kybernotes, 29(9/10):
34(6): 398–405. 1202–22.

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APPENDIX

List of Journals Selected in the Final Sample

Name of Journal Number of Articles

Internet Research 1
Kybernotes 2
Academy of Management Journal 1
Academy of Management Review 1
Academy of Marketing Science 1
Benchmarking: An International Journal 1
Benchmarking for Quality Management and Technology 1
Business Review 2
Corporate Governance 1
Creativity and innovation management 1
Creativity and Innovation Management 1
Economy Innovation New Technology 1
Engineering, Construction and Architectural Management 1
European Journal of Innovation management 5
European Journal of Marketing 2
European Planning Studies 1
Human Systems Management 1
Industry and Innovation 1
Industrial Management and Data Systems 5
Information Management 1
Integrate Manufacturing Systems. 1
International Journal of Contemporary Hospitality Management 1
International Journal of E-Collaboration 1
International Journal of Human Resource Management 1
International Journal of Management 1
International Journal of Manpower 2
International Journal of Operations and Product Management 1
International Journal of Quality and Reliability Management 2
Journal of Computer Information Systems 1
Journal of Enterprise Information Management 1
Journal of European Industrial Training 3
Journal of Innovation Management 1
Journal of Intellectual Capital 1
Journal of Knowledge Management 13
Journal of Management Development 1
(Appendix continued)

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Meeta Dasgupta and R.K. Gupta

(Appendix continued)

Name of Journal Number of Articles

Journal of Technology Management in China 1

Journal of Workplace Learning 4
Leadership and Organization Development Journal 1
Learning Behaviour in Product Innovation 1
Library Management 1
Management Decision 2
Management International Review 1
Management Science 1
Marketing Intelligence and Planning 1
On-line Info Review 1
R&D Management 1
SBR 1
Strategic Leadership 1
Strategic Management Journal 2
Strategy and Leadership 3
The Journal of Product Innovation 1
The Journal of Product Innovation Management 2
The Learning Organization 4

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