Creative Knowledge Sharing For Superior
Product Development: A Case Study
Poh Kiat Ng, Kian Siong
Jee, Multimedia
University, Melaka, Malaysia
ABSTRACT:
In order for Malaysian manufacturing firms to survive the modern dynamic changes in the existing market, a need has arisen to incorporate knowledge sharing practices with high levels of creativity in product development. With that in mind, this study aims to determine the effect of creative knowledge sharing on product development performance in a Malaysian semiconductor firm. A survey-based method was used to facilitate this study, where a total of 226 survey responses were collected back from the product development engineers of the firm. Using multivariate analyses, it was found that there are significant and positive relationships among knowledge sharing initiatives, creativity and product development performance. However, socialization and externalization initiatives were less dominant compared to combination and internalization initiatives since externalization can be time consuming and socialization captures tacit knowledge that can be overly subjective at times. In conclusion, in order to nurture creative knowledge sharing in product development, it would be beneficial for a firm to provide room for some socialization activities to enrich the idea generation among employees. This paper provides theoretical relevance that explains the mechanisms of knowledge sharing initiatives and creativity in a Malaysian semiconductor firm, with emphasis on the product development process.
Keywords: Knowledge sharing, Engineering performance, Quality,
Cross-functional teamwork.
1. Introduction
In manufacturing firms, knowledge sharing initiatives are considered to be particularly important for product development that normally consist of highly coordinated activities among cross-functional team members (Reilly et al, 2002). Similarly, cross-functional teamwork also plays an essential role as an enabler of knowledge sharing initiatives (Love and Roper, 2009).
Cross-functional teams in
product development groups are often used where the focus is on creativity and
innovation (Huang and Newell, 2003). In this case, integration of knowledge (or
information) from past product development projects may help these teams
achieve higher levels of product development performance (Sherman et al, 2005).
Knowledge sharing has the potential to decrease the cost and time of acquiring essential information and has been proven to be an effective strategy planning tool for new product development (Calantone et al, 2003; Chen, 2005). However, the key interest among practitioners appears to be more on the mechanisms as to how product development teams can improve their collaboration through knowledge sharing (Fernie et al, 2003). Also, identifying relevant important knowledge and utilizing it creatively may still be a challenge for many firms (Kasvi et al, 2003).
Therefore, the aim of this study is to investigate the role of creative knowledge sharing in achieving superior product development performance. The research is in a form of a case study conducted in a Malaysian semiconductor manufacturing firm. In this study, a total of 2000 product development engineers were surveyed, with their respective product development projects as the unit of analysis.
The variables used in this study were creativity, cost, time superiority and the knowledge sharing variables adopted from the SECI model of Nonaka and Takeuchi (1995). Based on the literature review of these variables, a research framework was also constructed.
A total of 226 survey responses were collected back and analysed using correlations and multiple linear regression analyses to validate the developed research framework. The research framework is represented by a combination of 6 hypotheses, which are discussed in the subsequent section.
2.
Literature Review
In many large firms, technological knowledge appears to be distributed only among the individual specialists/experts, business units and locations (Grant, 1996; Meeuwesen and Berends, 2007). In view of this, firms tend to adopt knowledge sharing practices as their key strategies to manage their organizational knowledge for strategic advantage (Liebowitz, 1999).
According to Salmador and Bueno (2007), knowledge sharing may be strengthened through creativity. This study will therefore investigate the roles of creative knowledge sharing in enhancing product development in a Malaysian semiconductor firm. The following sections present the literature review on the variables involved which are knowledge sharing, creativity and product development.
2.1. Knowledge Sharing
Knowledge sharing is defined as a mindset which involves building on past experiences and creating new methods for exchanging knowledge (O'Dell et al, 1998). It is also an approach that creates value using a firm’s intangible assets, which can involve combinations of concepts in artificial intelligence, software engineering, organizational behaviour and information technology fields (Liebowitz, 1999).
One of the most common models used in knowledge sharing research is the SECI model which was developed by Nonaka and Takeuchi (1995). In this model, Nonaka and Takeuchi (1995) classifies the knowledge creation process into four elements; which are socialization, externalization, combination and internalization. The model is illustrated in Figure 1.
Figure
1: The SECI Model (Nonaka and Takeuchi, 1995, p. 72)
Socialization. Socialization can be defined as the act of sharing
tacit knowledge through face-to-face communication or shared experience (Choi and Lee, 2002; Vaccaro et
al, 2009). Socialization mechanisms such
as multifunctional team meetings are able to gather individuals across departments
(Lawson et al, 2009). However, tacit knowledge
is from implicit learning, which is context-specific and difficult to
communicate (Mittendorff et al, 2006). Taking into
consideration both of these different views, the contribution of socialization mechanisms
for improved product development performance appears to be subjective. Thus, the following hypothesis is
proposed:
H1: Socialization correlates with product development performance in a Malaysian semiconductor firm.
Externalization. Externalization is defined as an act
of converting tacit knowledge to explicit knowledge by developing concepts and
models (Hoegl and Schulze, 2005). In externalization,
tacit knowledge is converted to understandable and interpretable knowledge so
that it can be conveniently used by others (Nonaka
and Takeuchi, 1995; Choi and Lee, 2002; Li et al,
2009). However, externalization can sometimes be time consuming and difficult
to support with the current information and communication technologies (Vaccaro et al, 2009). Consequently, it may be largely
categorized in forms of face-to-face interactions or documentation. This will
reflect strongly on the creativity and product development performance of a
company. Thus, the following hypothesis is proposed:
H2: Externalization correlates with product development performance in a Malaysian semiconductor firm.
Combination. Combination is defined as an act of
compiling externalized explicit knowledge to broader entities and concept
systems (Nonaka and Takeuchi, 1995; Bolloju et al, 2002; Vaccaro et
al, 2009). In combination, knowledge in explicit forms can be combined with the
knowledge processed earlier during the externalization process to produce a
more structured and organized form of knowledge (Linderman
et al, 2004; Hoegl and Schulze, 2005; Li et al,
2009). However, it is still uncertain if this combination process can produce a
more effective product development performance (Sapienza
et al, 2004). Therefore, the following hypothesis is proposed:
H3: Combination correlates with product development performance in a Malaysian semiconductor firm.
Internalization. Internalization is defined as an act
of understanding explicit knowledge when it transforms to tacit knowledge and
becomes part of an individual’s fundamental information (Nonaka
and Takeuchi, 1995; Bolloju et al, 2002; Vaccaro et al, 2009). However, knowledge
stickiness (which can be defined as unwillingness to share knowledge) may be a
challenge for internalization initiatives when developing products turn out to
be more costly than usual (Li and Hsieh, 2009). This drawback may restrict a
company’s progress in product development. Hence, the following hypothesis is
proposed:
H4: Internalization correlates with product development performance in a Malaysian semiconductor firm.
2.2. Creativity
Creativity is defined as a
skill that can generate and translate ideas and vision into a practical and new
external reality (Goel and Singh, 1998). It is
important in product development because the initial idea is almost never commercialized
until after some substantial modification (Stevens et al, 1999). It is through the creativity of employees that
concepts grow to be commercialized products (Garcia and Calantone,
2002).
Firms that encourage creativity tend to have more flexible working environments (Augusto and Coelho, 2009). An environment such as this will encourage a company to take more risks in new niche areas. Creativity is also required for the development of new products that are characterized by high levels of complexity (Kazanjian et al, 2000).
Creativity can be nurtured
in a less structured environment where most employees have the satisfaction of
a conducive work environment to come up with more
creative work (Balbontin et al, 2000). Ill-informed
interventions, however, may have a negative impact on creativity and the
quality of the final product (Bonner et al, 2002). In addition, paying too much
attention to operational concerns at a too early stage of a product development
phase can restrict the potential conceptual flexibility and creativity of a
team (Olson et al, 2001).
Decision-making in product development may depend on common sense and
intuition which will require creativity even though organized management decision plans
must still be prepared (Thiry, 2002). However, product development team members may be less motivated when dealing with
more abstract tasks that require more creativity (Reilly et al, 2002). Thus,
the following hypothesis is proposed:
H5: Creativity correlates with product development performance in a Malaysian semiconductor firm.
2.3. Product Development Performance
Product development
performance is defined as the degree of success in commercialization which
engages the whole supply chain (Customers, suppliers, distributors, engineers
and marketing executives) (Iyer et al, 2006). Through product
development performance, knowledge from various experts who have undergone the
necessary extensive training is required for design and new product development
(Schmickl and Kieser,
2008). Product development
performance deals with the objectives of the final product’s creation and
effects of it to end users (Pheng and Chuan, 2006).
To achieve successful
product development performance, multidisciplinary processes are involved,
where cross-functional teamwork is crucial for the growth of cost-effective
products (Olson et al, 2001). Working on product
development projects provides room for continuous improvement, knowledge
generation, problem-solving and brainstorming activities (Zika-Viktorsson
and Ingelgard, 2006). Therefore, efficient and collaborative teamwork
also plays an important role in product development performance (Thamhain, 2004).
However, high failure rates
in projects suggest that the management’s knowledge in transforming ideas into
commercialized products, is far from ideal, especially
among highly innovative development projects (Bonner et al, 2002). This shows that companies need to effectively
understand and manage risks associated with developing new products since there
is a high probability of new product failure and large financial loss (Schmidt
et al, 2009). Although the ability to
rapidly introduce new products into the market has become a sustainable
competitive advantage, it is still exceedingly complex and requires a wide variety
of assets, resources and skills (Sen and Egelhoff, 2000).
The abovementioned issues show that in order for
companies to survive and adapt to the dynamic changes in the current market,
there is a need to integrate knowledge sharing with high levels of creativity
in product development to expand a company’s competency in developing highly
complex and novel products. Therefore, the sixth and final hypothesis is
proposed:
H6: Creative knowledge sharing influences product development
performance in a Malaysian
semiconductor firm.
Figure 2 presents the proposed hypothetical
research framework of this study. The proposed framework suggests that superior
product development performance can be attained if the four modes of knowledge
conversion interact with creativity aspects in the spiral of knowledge creation
in order to potentially trigger new spirals of knowledge creation. This
proposition, however, will require further empirical validation. The following
sections will discuss the methods to facilitate this gap.
Figure 2: The Hypothetical
Research Framework
3.
Research Method
The firm chosen for this
study was founded in 1999 in Malacca, Malaysia. This firm has about 43,000
employees worldwide, with 6000 of them involved in research and development. Other than in Malaysia, this firm also
operates in Germany, Austria, France, Taiwan, Singapore and China.
Based on figures provided by this firm on
projects in the last 2 years (since 2009), the firm had 3000 projects in total
Due to the high turnover rates, re-assignments and resignations of project
leaders, some projects were discontinued. A total of 2000 survey forms were
handed out to all the product development managers and engineers in the firm.
As such, the unit of analysis for this study was
the product development personnel’s respective projects in the firm. Duration
of 6 weeks was used to gather the data. The response attained was 226 usable
surveys forms out of the 2000 surveys that were handed out, which produced a
response rate of 11%. The data was analyzed using the SPSS 18, a
quantitative application used for statistical analysis. The statistical methods
employed were
Pearson’s correlations analysis and multiple linear regression.
4.
Results
Pearson’s correlation analysis is used to evaluate H1, H2, H3, H4
and H5. The following tables present the results on the relationships
among knowledge sharing, creativity and product development performance. Table
1 presents the correlation analysis used to evaluate ‘H1: Socialization correlates with product
development performance in a Malaysian semiconductor firm’. The Pearson’s correlation between socialization
and product development
performance is 0.504 with a p value of 0.000. Therefore, the
relationship between socialization and product development performance is positive and significant. Hence, H1
is not rejected.
Table 1: Socialization – Product Development Performance Correlation
|
Test |
Output |
Interpretation |
|
Pearson’s Correlation |
0.504*** |
Positive Correlation |
|
Sig. (2-tailed) |
0.000 |
Significant |
*significant at p < 0.05 level, **significant at p< 0.01 level, ***significant at p < 0.001 level
Table 2 presents the correlation
analysis used to evaluate ‘H2: Externalization correlates with product
development performance in a Malaysian
semiconductor firm’. The Pearson’s correlation between externalization
and product development
performance is 0.497 with a p value of 0.000. Therefore, the
relationship between externalization and product development performance is positive and significant. Hence, H2 is not rejected.
Table 2: Externalization – Product Development Performance Correlation
|
Test |
Output |
Interpretation |
|
Pearson’s Correlation |
0.497*** |
Positive Correlation |
|
Sig. (2-tailed) |
0.000 |
Significant |
*significant at p < 0.05 level, **significant at p< 0.01 level, ***significant at p < 0.001 level
Table 3 presents the correlation
analysis used to evaluate ‘H3: Combination correlates with product
development performance in a Malaysian
semiconductor firm’. The Pearson’s correlation between combination
and product development performance
is 0.586 with a p
value of 0.000. Therefore, the relationship between combination and product
development performance is positive and significant. Hence, H3
is not rejected.
Table 3: Combination – Product Development Performance Correlation
|
Test |
Output |
Interpretation |
|
Pearson’s
Correlation |
0.586*** |
Positive Correlation |
|
Sig. (2-tailed) |
0.000 |
Significant |
*significant at p< 0.05 level, **significant at p < 0.01 level, ***significant at p < 0.001 level
Table 4 displays the correlation analysis used to evaluate ‘H4: Internalization correlates with product development performance in a Malaysian semiconductor firm’. The Pearson’s correlation between internalization and product development performance is 0.549 with a p value of 0.000. Therefore, the relationship between internalization and product development performance is positive and significant. Hence, H4 is not rejected.
Table 4: Internalization – Product Development Performance Correlation
|
Test |
Output |
Interpretation |
|
Pearson’s
Correlation |
0.549*** |
Positive Correlation |
|
Sig. (2-tailed) |
0.000 |
Significant |
*significant at p< 0.05 level, **significant at p < 0.01 level, ***significant at p < 0.001 level
Table 5 displays the correlation
analysis used to evaluate ‘H5: Creativity correlates with product
development performance in a Malaysian
semiconductor firm’. The Pearson’s correlation between creativity and product development performance is
0.559 with a p value of 0.000. Therefore, the relationship between creativity
and product development performance
is positive and significant. Hence, H5
is not rejected.
Table 5: Creativity – Product Development Performance Correlation
|
Test |
Output |
Interpretation |
|
Pearson’s
Correlation |
0.559*** |
Positive Correlation |
|
Sig. (2-tailed) |
0.000 |
Significant |
*significant at p< 0.05 level, **significant at p < 0.01 level, ***significant at p < 0.001 level
A multiple linear
regression using the stepwise method was conducted to evaluate ‘H6:
Creative knowledge sharing influences product development performance in a Malaysian
semiconductor firm’.
Five independent variables (Socialization, externalization, combination,
internalization and creativity) were tested for H6. Using
the formula provided by Tabachnick and Fidell (2001), the minimum sample size required would be 50
+ (8 × 5) or 90 respondents. As such, the sample size criterion was met
for this study.
Regression formulae are
based on the assumption that residuals are normally distributed around the
predicted dependent variable scores. For this study, normal probability plots
were generated to test this. In the normal probability plots, since the points
were in a reasonably straight diagonal line from bottom left to top right, it
can be confirmed that there were no major deviations from normality (Tabachnick and Fidell, 1996; Pallant, 2005). For the normality test, the measure of kurtosis and skewness values
for the variables tested were within the prescribed |1.0| range (Tabachnick and Fidell, 1996).
Having satisfied the assumptions for regression analysis, all of the four
independent variables were regressed against creative product development and
the results are summarized in Table 6.
Table 6: Multiple
Linear Regression for Creative Knowledge Sharing – Product Development
Performance
|
Creative Knowledge Sharing |
F |
R |
R2 |
|
(Constant) |
|
|
|
|
Socialization |
|
|
|
|
Externalization |
94.801*** |
0.678 |
0.460 |
|
Combination |
|
|
|
|
Internalization |
|
|
|
|
Creativity |
|
|
|
(Notes: *p<0.05; **p<0.01;
***p<0.001; N=226; Durbin Watson = 1.653)
From Table 6, the results indicate that up to 46% of the variance in product development performance is explained by socialization, externalization, combination, internalization and creativity. A positive and significant correlation coefficient (R=0.678) was also obtained which supports the final hypothesis, H6.
5.
Discussion
From the analyses of H1, H2, H3, H4 and H5, it is evident that the five selected
independent variables (Namely; creativity, socialization, externalization,
combination and internalization) have a positive and significant influence on
product development. This finding is consistent with the fact that knowledge
sharing helps to promote successful product development and generates
significant value to a firm through its intangible assets (Liebowitz,
1999; Thamhain, 2004).
Also, it was found that the
relationship between combination and product development performance is the
strongest (R=0.586) among that of the
other sub-variables. This may be due to the fact that this particular
manufacturing firm has a proven organized documentation system of standards and
processes. These standardized procedures allow the firm to easily and
effectively utilise knowledge in established knowledge sharing techniques such
as training, workshops and projects (Linderman et al,
2004; Li et al, 2009).
The externalization aspect
however, appears to be the weakest among the four focused modes in relation to
product development performance (R=0.497).
One of the possible reasons is that this semiconductor firm employs highly
sequential and systematic manufacturing processes that are not only extensive,
but also complex. Thus, the tacit knowledge conversion process may be extremely
time consuming and not feasible in such a complex
condition (Vaccaro et al, 2009). The management and
staff may therefore opt not to emphasize too much on converting tacit knowledge
to enhance their product development performance. Instead, it may appear to be
more important for the firm to emphasize on existing problems in backend
manufacturing processes.
In addition, the
relationship between creativity and product development performance also
appears to be relatively high (R=0.559)
compared to that of externalization’s relationship. This finding shows that
this firm still strives to be creative in their product development processes
apart from combining and externalizing them.
Although it may prove to be
a challenge for some product development members at first (Reilly et al, 2002), it is still evident that nurturing creativity
is important for knowledge creation and flourishing product development
performance (Liu et al, 2005). One of the suggestions for this firm is to have a
more flexible environment so that employees can have a conducive
atmosphere to enhance their creative and inventive endeavours
(Balbontin et al, 2000).
Upon using stepwise
multiple linear regression to evaluate H6, it was found that the
relationship between all the sub-variables of creative knowledge sharing and
product development performance appear to be also positively correlated (R=0.678). In addition to that,
the model is significant as indicated by the ANOVA results of F (5, 221) = 94.801, p<0.001.
This finding indicates a
relatively stronger relationship with product development performance as
compared to the individual correlations of H1 to H5. This is consistent
with the contingency theory, which suggests that there is no best, near to best
or consistently effective method to manage an firm
(Galbraith, 1973). It is likely that the fraction of total effectiveness from
knowledge sharing practices and creativity in product development is muddied by
the initiatives such as total quality management or concurrent engineering
approaches.
6.
Conclusion
In this study, it was found
that the roles of combination and creativity factors in product development
performance were the strongest in the firm among the other sub-variables. This
was most likely due to the company’s efficient traceability systems,
documentation processes and standards.
Apart from that,
socialization and externalization proved to be the weakest influences among the
four modes of knowledge sharing. This may be because externalization activities
are comparatively more time consuming. Also, socialization activities capture
tacit knowledge which is cognitive and subjective. However, in order to nurture
knowledge sharing and creativity in product development, it would benefit the
firm if more opportunities for socialization activities were provided to enrich
the idea generation among employees and subsequently offer a more conducive
environment for creativity development.
The firm may also need to
identify various means such as coffee klatches or brown bag sessions in order
to promote socialization and externalization activities that can enrich the
shared information among employees. Overall, socialization and externalization
are not to be taken lightly, much less ignored in product development.
Also, since externalization
activities often tend to remain largely in face-to-face interactions, the
company can actually invest in various communication facilities that facilitate
face-to-face meetings or social interactions. The usage of social media
networks such as Facebook or Twitter should also be
encouraged to promote a less structured and stressful environment, which in
turn encourages creativity development.
The limitation in this
study is the sampling method employed which limits the generalizing of this
study beyond the context of this firm. Due to time and budgetary constraints,
this study took on a case study approach in which it was only conducted within
a large Malaysian semiconductor company. As such, the findings of this study
needs to be interpreted within this context and cannot be generalized to other
electronics companies in Malaysia. Apart from that, a simultaneous modelling
analysis in this study is not possible because the variables cannot be
simultaneously tested against each other. This limits the possibility of
discovering more relations among the dependent and independent variables.
In addressing the above, it
is suggested as a future method, to conduct the study in as many electronics
companies in Malaysia as possible. This certainly would allow generalizing the
findings and hypotheses put forward in this study. Another suggestion is to
conduct in-depth qualitative studies in each technology cluster or business
unit of this company to further examine its organizational context for more in
depth understanding on the role of knowledge sharing and creativity in product
development. Also, observations could be employed to shed more light on this
phenomenon. In addition to that, instead of using respondent-reported knowledge
sharing and creativity development scales, it would be good if researchers are
able to use empirical data from the company’s records e.g. sales performance,
customer satisfaction, development cost etc.
In addition, a structural
equation modelling (SEM) approach using a combination of statistical data and
qualitative causal assumptions can be used in order to test and estimate causal
relationships. AMOS software can be utilized for this analysis. Using this
approach, the variables for this study are capable of being tested
simultaneously instead of the conventional method where they are linearly
tested with only one variable against another.
All in all, this study empirical
evidence to suggest that creative knowledge sharing influences product
development performance in a Malaysian semiconductor manufacturing firm. In
this study, socialization and externalization factors are found to be often
overlooked in product development and deserve serious attention towards the
progress and eventual success of product development projects.
7.
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About the Authors:
Poh Kiat
Ng is a Lecturer at the
Faculty of Engineering and Technology, Multimedia University, Melaka Campus,
Malaysia. He is also a PhD candidate at the Technical University of Malaysia. His
research interests are in the areas of knowledge management, ergonomics,
biomechanics, quality management, engineering education and manufacturing
management.
Poh Kiat Ng, Faculty of Engineering and Technology, Multimedia University, Jalan Ayer Keroh Lama, Bukit Beruang, 75450 Melaka, Malaysia; Email: pkng@mmu.edu.my; Tel: +606-2523044.
Kian Siong Jee is a Lecturer and PhD candidate at the Faculty of Engineering and Technology, Multimedia University, Melaka Campus, Malaysia. His research interests are in the areas of manufacturing technology, manufacturing systems, manufacturing management, materials engineering, maintenance engineering, green technology, quality management, engineering education and knowledge management.
Kian Siong Jee, Faculty of Engineering and Technology, Multimedia
University, Jalan Ayer Keroh
Lama, Bukit Beruang, 75450 Melaka, Malaysia; Email: ksjee@mmu.edu.my; Tel: +606-2523099.