Relationship between Innovation and Knowledge Management

This report analyzes the relationship between innovation and Knowledge Management (KM), reviewing the Knowledge Management Systems (KMS) and their impact on innovation. It discusses the consequences of implementing KMS with the help of KM theories. The report highlights the importance of recognizing primary sources of knowledge and the role of personalization and technology in knowledge management strategies. It also explores the connection between innovation and KM, and the different perspectives of research in these fields.

Knowledge
Management
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Abstract
The purpose of this report is to analyze the relationship between innovation and Knowledge
Management. It will review the Knowledge Management Systems (KMS) and explain the
consequences of the implementation of KMS with the help of KM theories. The findings of this
report showed there is a deep relationship between innovation and KM, and it has developed
over the past ten years. It also evaluated that those firms want to generate innovative client based
solutions or product innovations, it must choose the personalization strategy, particularly those
organizations which follows flat business structures as internal communication is significant for
them. Even though KM has a strong relation with innovation, it is not clear whether the
literature of research in the two fields combines or they are different perspectives of research.
Techno-centric theory focus on technology and ease the storage of information and the flow of
knowledge. Organizational theory focus on organizational structures for managing the
knowledge.
Keywords: Knowledge Management Systems (KMS), innovation, personalization strategy

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Table of Contents
Introduction.................................................................................................................................................3
Literature Review........................................................................................................................................3
Review of the KMS......................................................................................................................................4
Critical Discussion........................................................................................................................................5
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

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Introduction
Knowledge Management (KM) is a method to create, share, use, and manage the knowledge and
data of the firms. It states to a multi-disciplinary process to achieve the goals of the firms by
making the best utilization of the knowledge. The efforts of KM usually focus on the purposes of
the firms like innovation, competitive benefits, better-quality performance, incorporation, and
constant improvement of the firms and the sharing of lessons learned. The report will analyze the
literature on the selected theme and also examine the Knowledge Management Systems (KMS).
Moreover, it will discuss the consequences of the implementation of KMS with the help of KM
theories.
Literature Review
Innovation and Knowledge Management
Innovation has the capability to enhance the performance, solve the issues, add value, and create
competitive benefit for the companies. Innovation could be described as the execution of both
inventions and the method by which new consequences, whether they are products,
organizational forms, systems, and processes come into existence. According to Al Saifi, Dillon,
and McQueen, (2016), the innovation relies heavily on knowledge management (KM) mostly
because knowledge signifies a realm which is much deeper than mere information and
conventional logic. There is a deep relationship between innovation and KM, and it has
developed over the past ten years.
For innovation, the organizations need to recognize their primary sources of knowledge and
become capable to exploit them. As stated by Barley, Treem, and Kuhn, (2018), the
organizations could utilize innovation as a strategic weapon to design KM programme which
aligns with their strategies of innovation. Project management is addressed under innovation, but
recently, the increasing number of KM has directly concentrated on project management.
Designing innovative products implies innovation, along with the capability of the knowledge
management of the current knowledge. Innovation is a vital area in KM, which signifies the
acquisition, transfer, and generation of knowledge, so from where models and concepts have
been drawn for KM.

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The main aim of KM is to bring innovation and the firms that can rapidly implement new
knowledge within the firms can able to bring innovation in comparison to those firms which does
not focus on this field. In the words of Buenechea-Elberdin, Sáenz, and Kianto, (2018), the firms
need to improve the receptors to gain the external knowledge, and it is strongly connected with
the innovation. They can gain knowledge from external sources through the benchmarking.
These external sources could be combined with the internal knowledge of the firms and if there
exists any knowledge gap that could be filled by the newly acquired knowledge that will be
helpful for bringing innovation.
To gain a competitive benefit, the firms must constantly learn from the external sources. Through
the proper sharing and distribution of knowledge, the firms could bring the innovation. Thus, the
firms need to create such channels in the firms through which the staffs can share their
knowledge with each other. Innovation relies on knowledge, and in order to bring innovation, the
firms need to recognize the richness and capability of knowledge. As mentioned by Donate and
de Pablo (2015), the most significant aspect of innovation is to enhance the capacity of
innovation to recognize and capture the implicit knowledge of the firms. This knowledge could
be gained from outside the firms such as bankers, clients, and suppliers. This gaining of
knowledge has a vital role in fostering the method of innovation. This knowledge is more
significant in those businesses where there is a scarce of explicit knowledge. Through KM, the
firms can recognize their implicit knowledge, usually not known by them before. KM also helps
the firms to show their implicit knowledge through explicit knowledge and becomes a strong
basis in bringing innovation.
KM combines various kinds of explicit and implicit knowledge. Through the combination, the
firms can find out the type of explicit and implicit knowledge exists in the firms. According to
Greiner, Böhmann, and Krcmar, (2007), activities of KM such as managing, gathering, learning,
sharing, reusing, and retrieval of knowledge has a vital role in bringing innovation. Through the
activities of KM, the firms discover the range of knowledge both from in and out of the firms.
The firms maintain this knowledge in the form of information base to make sure of the
availability of correct type knowledge to the correct person at the proper time. But, in spite of
this, innovation and KM have proven themselves as individual fields and separate areas of

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research. Even though KM has a strong relation with innovation, it is not clear whether the
literature of research in the two fields combines or they are different perspectives of research.
Review of the KMS
The primary purpose of the personalization knowledge management strategy is not only to store
the knowledge but also to utilize Information Technology (IT) for helping the people in
communicating their knowledge (Imran et al., 2016). This strategy helps to exchange, transfer,
and communicate the knowledge through knowledge networks like discussion forums. If an
organization want to generate innovative client based solutions or product innovations, it must
choose the personalization strategy, particularly those organizations which follows flat business
structures as internal communication is significant for them. The primary principle is to
motivate the staffs for exchanging their concepts and experiences (Inkinen, 2016). So, the staffs
can constantly enhance their social networks in their organizations and use it for localizing the
experts or desired knowledge when they need it.
The firms that follow this strategy generally try to support individual and innovative approaches
for different tasks. They face only outstanding issues, incorporating the differences of each
project and client to provide specialized solutions where various areas and levels of expertise are
significant. Hence, the KM focus more on connecting the staffs, and it is supported by an open
organizational culture which helps in interpersonal communication and creates situations to share
the knowledge mainly implicit knowledge that had a vital role in this context. A competitive
strategy which is applied in this strategy focus on customized solutions that are highly
complicated and are of high quality (Inkinen, Kianto, and Vanhala, 2015). It is typical for this
type of firms to have various types of clients at multiple domains. The outcome is that the
experts work on solutions and shares their knowledge that ultimately enhances the expertise of
the organizations (Kianto, Vanhala, and Heilmann, 2016).
Critical Discussion
If an organization want to generate innovative client based solutions or product innovations, it
must choose the personalization strategy, particularly those organizations which follows flat
business structures as internal communication is significant for them. The primary principle is to
motivate the staffs for exchanging their concepts and experiences. The KM focus more on
connecting the staffs, and it is supported by an open organizational culture which helps in

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interpersonal communication and creates situations to share the knowledge, particularly implicit
knowledge. A KMS in personalization has the target for organizing direct interaction (Martín-de
Castro, 2015). A moderate investment in IT is adequate as the aim is to ease the conversations
and exchange of implicit knowledge (Obeidat et al., 2016). The knowledge can be shared not
only through face-to-face but also through email, video conferences, and telephone (Greiner,
Böhmann and Krcmar, 2007).
The main task in personalization strategy is to establish networks to spot out the knowledgeable
person to solve the issues (Obeidat et al., 2017). Technically the communication is a trivial
aspect and can be solved simply by instant messaging, email, or other solutions. However, IT
could also support the networking as the internet is utilized heavily to connect with people and
set up deep relationships in these days. Some examples are Facebook and LinkedIn, as both
mediums connect people and provide various ways for communication (Omotayo, 2015). But
Facebook concentrates on personal lives while LinkedIn concentrates on business contacts. The
techniques will enable to insert personal data such as CVs after the registration, and an individual
could connect with others, observe their data, and directly contact them. These techniques are the
applications of personalization knowledge management strategy through which people can create
networks and deal with their interested persons.
Techno-centric KM theory focus on technology and the method to design technology enablers
helps to ease the storage of information and the flow of knowledge. It has a vital role in the firms
at the modern times. The storage of information and the flow of knowledge creates a base for
knowledge depends on the technical methods which are followed (Kianto, Vanhala, and
Heilmann, 2016). The personalization strategy and techno-centric KM theory can combine and
evaluate the effects that the technology has on the organizations and its employees along with the
levels of sharing knowledge (Santoro et al., 2018). Through the activities of KM, the firms
discover the range of knowledge both from in and out of the firms. The firms maintain this
knowledge in the form of information base to make sure of the availability of correct type
knowledge to the correct person at the correct time.
Organizational KM theory focus on organizational structures of individual firms for managing
the knowledge. It includes a continuing procedure of managing and maintaining the base of
knowledge with the help of some agents (Tangaraja et al., 2016). The personalization strategy

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and organizational KM theory can combine and add to the knowledge with all the collected
information at every level and through communicating with others at the organizations. This
theory and its implementation try to create a bridge between the organization's capability to
adjust and current practices and techniques. It leads to several meaningful outputs like
knowledge validation criteria, domain-specific knowledge, and also some resources for
implementing in the organizations (Inkinen, Kianto and Vanhala, 2015).
The knowledge base of the organizations has several entities of various types. The initial level
has resources or the employees and teams those who are connected with firms and make a
contribution to the knowledge base (Todorović et al., 2015). The next level has global and
structural properties which are taken from the data connected with the firms, and it also helps in
the growth of the knowledge base. There are many other elements which help to form the
knowledge base regarding the effects of the strategies. This theory is applied to examine the
project managers of the organizations after considering the different practices which are followed
by the firms.
Conclusion
The report evaluated the literature on innovation and also examine the Knowledge Management
Systems (KMS). It also discussed the consequences of the implementation of KMS with the help
of KM theories. For innovation, the organizations need to recognize their primary sources of
knowledge and become capable to exploit them. As stated by, the organizations could utilize
innovation as a strategic weapon to design KM programme, which aligns with their strategies of
innovation. A KMS in personalization has the target for organizing direct interaction. Techno-
centric theory focus on technology and the method to create technology enablers helps to ease
the storage of information and the flow of knowledge. Organizational theory focus on
organizational structures for managing the knowledge.

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References
Al Saifi, S.A., Dillon, S. and McQueen, R., 2016. The relationship between face to face social
networks and knowledge sharing: an exploratory study of manufacturing firms. Journal of
knowledge management, 20(2), pp.308-326.
Barley, W.C., Treem, J.W., and Kuhn, T., 2018. Valuing multiple trajectories of knowledge: A
critical review and agenda for knowledge management research. Academy of Management
Annals, 12(1), pp.278-317.
Buenechea-Elberdin, M., Sáenz, J., and Kianto, A., 2018. Knowledge management strategies,
intellectual capital, and innovation performance: a comparison between high-and low-tech firms.
Journal of Knowledge Management, 22(8), pp.1757-1781.
Donate, M.J., and de Pablo, J.D.S., 2015. The role of knowledge-oriented leadership in
knowledge management practices and innovation. Journal of Business Research, 68(2), pp.360-
370.
Greiner, M.E., Böhmann, T., and Krcmar, H., 2007. A strategy for knowledge management.
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Martín-de Castro, G., 2015. Knowledge management and innovation in knowledge-based and
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Management, 47, pp.143-146.

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Obeidat, B.Y., Al-Suradi, M.M., Masa'deh, R.E., and Tarhini, A., 2016. The impact of
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