Sab Her Wal 2003

Decision Sciences
Volume 34 Number 2
Spring 2003
Printed in the U.S.A.
An Empirical Study of the Effect of

Knowledge Management Processes at
Individual, Group, and Organizational
Levels
Rajiv Sabherwal
College of Business Administration, University of Missouri, St. Louis, 8001 Natural Bridge
Road, St. Louis, MO 63121, e-mail: sabherwal@umsl.edu
Irma Becerra-Fernandez
Decision Sciences and Information Systems, College of Business Administration, Florida
International University, Miami, FL 33199, e-mail: becferi@fiu.edu
ABSTRACT
To enhance our understanding of knowledge management, this paper focuses on a spe-
cific question: How do knowledge management processes influence perceived knowl-
edge management effectiveness? Prior literature is used to develop the research model,
including hypotheses about the effects of four knowledge management processes (in-
ternalization, externalization, socialization, and combination) on perceived individual-
level, group-level, and organizational-level knowledge management effectiveness. The
study was conducted at the John F. Kennedy Space Center of the National Aeronautics
and Space Administration using a survey of 159 individuals and two rounds of personal
interviews. Structural equation modeling was performed to test measurement and struc-
tural models using the survey data. The emergent model suggests that internalization
and externalization impact perceived effectiveness of individual-level knowledge man-
agement. Socialization and combination influence perceived effectiveness of knowledge
management at group and organizational levels, respectively. The results also support
the expected upward impact in perceived effectiveness of knowledge management, from
individual to group level, as well as from group level to organizational level. The studys
limitations and implications for practice and future research are described.
Subject Areas: Knowledge Acquisition, Knowledge Management, Manage-

ment Information Systems, Multiple Regression, Structural Equation Mod-
eling, Survey Research.
We are grateful to the guest editor and two anonymous reviewers for their excellent comments on the
previous draft of the paper. We thank NASAKennedy Space Center and Florida Space Grant Consortium,
who provided a research grant (no. NAG10-0232) from which this study was partially funded. We are
also grateful to James Jennings, Loren Shriver, and Pat Simpkins, who championed this initiative, Shannon
Roberts, who provided numerous invaluable suggestions during the course of this study, the large number
of KSC employees who participated in this project, and to Gregg Buckingham and June Perez for their
help during data collection. We also appreciate the research assistance provided by Hector Hartmann, Maria
Ray, Jessica Riedel, and Aracelys Rodriguez from the Knowledge Management Lab at Florida International
University.
225
226 An Empirical Study of the Effect of Knowledge Management
INTRODUCTION
For many years, organizational knowledge has been stored in several ways, includ-
ing human minds, documents, policies, and procedures, and shared among indi-
viduals through such means as conversations, training, apprenticeship programs,
and reports. Clearly, knowledge management (KM) is not a new phenomenon.
However, the importance of knowledge has grown considerably in recent times.
Although this increased importance of knowledge may be partly attributed
to the emergence of new electronic means of supplementing traditional KM, free
circulation of knowledge throughout the organization does not necessarily follow
the availability of enabling technologies (Brown & Duguid, 1991; Vandenbosch &
Ginzberg, 19961997). For the latest technologies to improve KM, it is imperative
that they be designed and developed to improve the most appropriate processes for
managing organizational knowledge. Unfortunately, many organizations do not
give much attention to KM processes (Davenport & Prusak, 1998). Therefore, our
broad objective in this paper is to develop a better understanding of KM processes
and the nature of their impacts on perceived KM effectiveness.
In pursuing this broad objective, we view knowledge as subjective rather than
objective (Burrell & Morgan, 1979; Schultze, 1999). From the objective stance,
knowledge is considered as an object, which is representative of the world, in-
dependent of human perception, and exists in a variety of forms and locations
(Hedlund, 1994). Following Boland and Tenkasi (1995) and Venzin, Von Krogh,
and Roos (1998), we view knowledge as subjective. This perspective contends that
knowledge does not exist independent of human experience; instead, it develops
through social creation of meanings and concepts, and therefore loses a universal,
objective character (Venzin et al., 1998). The subjective nature of knowledge is
apparent in Churchmans (1972) view that knowledge resides in the individual,
in Nonaka and Takeuchis view of knowledge as a dynamic human process of
justifying personal belief toward the truth (1995, p. 58), and in the autopoietic
view, which treats organizational knowledge as embodied in individuals and groups
(Maturana & Varela, 1992; Magalhaes, 1998). The subjective and context-sensitive
nature of knowledge implies that its categories and meanings depend on individual
perception (Davenport & Prusak, 1998).
Thus, we focus on a specific question related to our broad objective: How
do the KM processes experienced by an individual influence the individuals per-
ceptions regarding the perceived effectiveness of KM at individual, group, and
organizational levels? We address this research question using empirical research
conducted at one organization renowned for its knowledge resources: the National
Aeronautics and Space Administration (NASA), more specifically, NASAs John
F. Kennedy Space Center (KSC). The KSC is responsible for the checkout, launch,
and landing of spacecrafts that explore and study the Earth, the Moon, and planets
in the solar system.
In studying KM processes, we draw upon Nonakas (1994) four
KM processesinternalization, externalization, socialization, and combination.
Knowledge management processes are the broad approaches through which knowl-
edge is discovered, captured, shared, or applied. They utilize a variety of KM tools,
which may be technical, social, or structural in nature (Hansen, Nohria, & Tierney,
Sabherwal and Becerra-Fernandez 227
1999). We study the use of each KM process by identifying, based on prior liter-
ature, some KM tools that facilitate it, and then empirically assessing the use of
each of these tools.
The rest of the paper is organized as follows. The next section develops the
theoretical background for the paper. We propose the research model, including
several testable hypotheses. The third section describes the data collection, in-
volving two rounds of qualitative investigation and a questionnaire survey of 159
individuals. The fourth section summarizes the analytical methods, which relied
primarily on structural equation modeling techniques. The results of the study are
also described in this section. Finally, the last section discusses the findings and
their implications for practice and research, and identifies some limitations of this
study.
THEORETICAL DEVELOPMENT
Background
Knowledge is defined as the set of justified beliefs that enhance an entitys capa-
bility for effective action (Alavi & Leidner, 2001; Nonaka, 1994). This definition
recognizes the importance of individual perceptions by considering knowledge as
personal belief and including the need to justify it as true (Nonaka, 1994). It
also incorporates both explicit knowledge, which can be expressed in numbers and
words and shared formally and systematically in the form of data, specifications,
manuals, and so on, and tacit knowledge, which includes insights, intuitions, and
hunches, is difficult to express and formalize, and is therefore difficult to share
(e.g., Davenport & Prusak, 1998; Nonaka, 1994; Polanyi, 1966).
Knowledge management may then be defined as doing what is needed to get
the most out of knowledge resources (Armbrecht et al., 2001). Knowledge manage-
ment focuses on organizing and making available important knowledge, wherever
and whenever it is needed. The traditional emphasis in KM has been on knowledge
that is recognized and already articulated in some form, but, increasingly, KM has
also incorporated managing important tacit knowledge.
Knowledge management effectiveness for any entity refers to whether the
entity receives and understands the knowledge needed to perform its tasks (Gupta
& Govindarajan, 2000; Jensen & Meckling, 1996). KM effectiveness has been
distinguished from KM efficiency, the latter reflecting the cost and speed at which
knowledge becomes available to the concerned entity (Gupta & Govindarajan,
2000). While KM efficiency is also important, the focus in this paper is on KM
effectiveness. As mentioned above, rather than employing an objective assessment
of KM effectiveness, the focus is on KM effectiveness as perceived by individuals
that experience the consequences of the KM efforts.
Each of the above concepts has been implicitly or explicitly examined in three
theoretical streams that underlie this paper: (a) organizational learning theory; (b)
the knowledge-based theory of the firm; and (c) Nonakas (Nonaka, 1994; Nonaka
& Konno, 1998; Nonaka & Takeuchi, 1995) theory of knowledge creation. We next
summarize these theoretical streams.
Organization learning theory may be viewed from two broad perspectives
(Weick, 1991). According to one perspective, organizational learning is said to
occur when new knowledge is generated, even if this new knowledge does not pro-
duce any change in behavior (Duncan & Weiss, 1979; Huber, 1991). For example,
Huber states: An organization learns if any of its units acquires knowledge that
it recognizes as potentially useful to the organization (p. 89). According to the
second perspective, cognitive development is necessary but not sufficient for orga-
nizational learning; instead, according to this perspective, organizational learning
requires behavioral development as well (Argyris, 1977; Stata, 1989). For example,
Argyris states: An organization may be said to learn to the extent that it identifies
and corrects errors (p. 113).
However, both these perspectives on organization learning theories recognize
the importance of cognitive development. Moreover, they recognize the value of
considering learning as an organizational-level phenomenon (Argyris & Schon,
1978; Huber, 1991). According to Hedberg,
Organizations do not have brains, but they have cognitive systems and mem-
ories. As individuals develop their personalities, personal habits, and beliefs
over time, organizations develop worldviews and ideologies. Members come
and go, and leadership changes, but organizations memories preserve certain
behaviors, mental maps, norms, and values over time. (1981, p. 6)
Organizational learning is not simply the cumulative result of each members

learning (Fiol & Lyles, 1985). Moreover, its eventual impact is on the organization
(Hurley & Hult, 1998; Slater & Narver, 1995). However, organizational learning
takes place through individuals (Simon, 1991). Organizations learn through the
positive and negative outcomes that their members encounter from their behaviors.
The amount of such experiential learning depends on the extent to which each
specific individual learns, as well as the extent to which individual learning gets
embedded in organizational memory (Argyris & Schon, 1978).
Cognitive development, organizational impacts, and the role of individuals
are also central to the knowledge-based theory of the firm (Conner, 1991; Conner
& Prahalad, 1996; Grant, 1996a, 1996b; Kogut & Zander, 1992). According to
this theory, firms are superior to markets in their ability to integrate knowledge
across individuals (e.g., Conner & Prahalad, 1996). Indeed, this theory suggests
that the primary reason for the existence of the firm is its superior ability to integrate
multiple knowledge streams, for the application of existing knowledge to tasks as
well as for the creation of new knowledge (Conner, 1991; Conner & Prahalad,
1996; Grant, 1996a, 1996b; Kogut & Zander, 1992). Grant (1996a) argues that
competitive advantage is based on the firms ability to integrate the individuals
specialized knowledge. In essence, the role of the firm is then to generate new
combinations of the individual knowledge. Knowledge is created and stored by
individuals and the firm essentially acts as an institution for knowledge integration
(Grant, 1996a, 1996b). Thus, according to the knowledge-based theory of the firm,
knowledge starts with the individual, and firms need to integrate this knowledge
using a combination of mechanisms and technology.
The interplay between individual-level learning and organizational impacts
is also evident in Nonakas theory of knowledge creation (Nonaka, 1994; Nonaka
& Konno, 1998; Nonaka & Takeuchi, 1995). According to this theory, an organiza-
tion cannot create knowledge by itself; instead, individual knowledge is the basis of
organizational knowledge creation. Nonaka and Takeuchi (1995) examine knowl-

edge along two dimensions: ontological and epistemological. The epistemological
dimension focuses on whether knowledge is tacit or explicit. The ontological di-
mension relates to the nature of knowledge-related phenomena and, in this regard,
Nonaka and Takeuchi differentiate between individual, group, organizational, and
interorganizational levels.
Thus, the above three theories agree on some important aspects. First, they
recognize that KM leads to cognitive development, which is usually followed by
behavioral change. Second, these theories agree that KM can produce impacts at
various levels, including impacts on the overall organization. Finally, they consider
learning or knowledge creation as originating at the individual level, and then
moving up through groups, and then to the overall organization.
Levels of Knowledge Management

Based on the above discussion, perceived KM effectiveness is viewed here at
three levels: individual, group, and organization. Since this study focuses on one
organization, interorganizational level is not considered. We consider a group to be
a directorate or a functional office (e.g., administrative office) within NASA-KSC.
Thus, KM effectiveness is viewed at three levels: individual, group (i.e., directorate
or office), and organization.
Individuals acquisition and use of knowledge depends on the perceptual
filters they use to interpret events and actions (Daft & Weick, 1984; Fiol, 1994;
Starbuck & Milliken, 1988). Moreover, knowledge in groups and in organizations
depends on the individuals knowledge (Cohen & Levinthal, 1990; Fiol, 1994).
Argote (1999, pp. 161162) identifies some prior research on knowledge flow
across various groups in organizations, across products or models of the same
product, and across organizational units (e.g., shifts within a manufacturing plant
or departments). Knowledge flows, which may be facilitated by KM processes
and the tools supporting them, are important because they provide the integrative
ability of knowledge, from individual to group, and from group to the organi-
zational level (Grant, 1996a). In the transition from the individual to the group,
shared beliefs develop through the synthesis of individuals knowledge and in-
terpretations (Probst, Buchel, & Raub, 1998). Moreover, knowledge in groups
and in organizations depends on the individuals knowledge (Cohen & Levinthal,
1990; Fiol, 1994). Therefore, perceived effectiveness of KM at the individual
level may be expected to facilitate perceived effectiveness of KM at the group
level.
The progression of knowledge from the individual to the group continues fur-
ther to the organizational level. This progression takes place through the synthesis
of individual knowledge via social interaction, as well as through the use of beliefs
shared across groups to create organizational routines (Probst et al., 1998). Fur-
thermore, individual learning has been found to impact the organization through
the infusion of new ideas (Hurley, 1995). Consequently, organizational knowledge
arises from group knowledge as well as from individual knowledge, as is also indi-
cated by the recent literature on communities of practice (e.g., Boland & Tenkasi,
1995; Brown & Duguid, 1991; Storck & Hill, 2000).
The impact of KM at the organizational level has been clearly highlighted in

some recent studies (e.g., Hult, 1998; Hult, Hurley, Giunipero, & Nichols, 2000;
Slater & Narver, 1995). Organizational learning, together with market orientation,
has been found to enhance a firms performance (Slater & Narver, 1995). An orga-
nizations ability to learn, enabled by its market orientation, can eventually translate
into enhanced performance. Furthermore, organizational learning has been found to
enhance firms innovativeness and capacity for adaptation (Hurley & Hult, 1998).
Firms with greater learning consequently also possess a higher capacity to inno-
vate, which in the presence of adequate resources results in increased competitive
advantage and performance for the firm. Finally, organizational learning can trans-
late into business agility, by positively influencing, for example, the cycle time of
the purchasing process (Hult et al., 2000).
Moreover, the effect of KM moves up from individuals to groups and then
to the organizational level. This is consistent with all three theories examined
above. For example, Nonaka (1994) describes organizational knowledge creation
as a spiral process that, starting at the individual level, expands to the group and
organizational levels. Nonaka and Takeuchi (1995) contend that only individuals
can create knowledge, and interactions among individuals are essential to develop
organizational knowledge. They view organizational knowledge creation as a pro-
cess that amplifies the individuals knowledge, as original ideas emanate from
autonomous individuals, diffuse within the team, and then become organizational
ideals (p. 76). We therefore propose the following hypotheses representing the
amplification of knowledge and the interdependence of KM processes at various
levels.
H1: Perceived individual-level KM effectiveness facilitates perceived

group-level KM effectiveness.
H2: Perceived group-level KM effectiveness facilitates perceived
organizational-level KM effectiveness.
H3: Perceived individual-level KM effectiveness facilitates perceived
organizational-level KM effectiveness.
Knowledge Management Processes and Tools

Nonaka (1994) views internalization processes as those that help convert explicit
knowledge into tacit knowledge. In internalization processes, the explicit knowl-
edge may be embodied in action and practice, so that the individual acquiring
the knowledge can reexperience what others go through. Alternatively, individuals
could acquire tacit knowledge in virtual situations, either vicariously by read-
ing or listening to others stories, or experientially through simulations or ex-
periments. Learning by doing, on-the-job training, learning by observation, and
face-to-face meetings are some of the internalization processes by which individ-
uals acquire knowledge. In internalization, an individual absorbs tacit knowledge
through demonstrations and other means. Nonaka (1994) draws a parallel between
internalization and the traditional notion of learning.
In contrast, externalization involves the expression of tacit knowledge and its
translation into comprehensible forms that others can understand (Nonaka, 1994;
Nonaka & Takeuchi, 1995). Conventional learning methodologies require the ex-
ternalization of the professors knowledge as the initial step in the students learn-
ing process (Raelin, 1997). Moreover, externalization involves techniques for ex-
pressing ideas or images as words, concepts, visuals, or figurative language (e.g.,
metaphors, analogies, narratives), and deductive/inductive reasoning or creative
inference. It enables the translation of personal or professional knowledge into
explicit forms that are easier to understand.
Internalization and externalization are both fundamental to individual-level
KM; through externalization the individual makes the knowledge more agreeable
and understandable to others, while through internalization the individual absorbs
knowledge others hold (Maturana & Varela, 1992; Von Krogh & Roos, 1995).
Whether we focus on internalization, such as when individuals acquire knowledge
by observing or talking to others, or on externalization, such as when they try to
model their knowledge into analogies, metaphors, or problem-solving systems, the
learning processes are personal and individualized (Magalhaes, 1998).
H4: Internalization facilitates perceived individual-level KM effec-
tiveness.
H5: Externalization facilitates perceived individual-level KM effec-
tiveness.
We also expected externalization to enhance perceived effectiveness of group-
level KM. Externalization enables individuals to express their knowledge such that
the rest of their group can more easily understand it. Externalization processes are
supported by the use of KM tools such as chat groups and expertise locator systems
(also known as skills yellow pages) and make individuals knowledge more ac-
cessible to the group (Huseman & Goodman, 1999). Externalization consequently
increases the utilization of knowledge by a wider circle of individuals (Hansen
et al., 1999; Kogut & Zander, 1992).
H6: Externalization facilitates perceived group-level KM effective-
ness.
According to Nonaka (1994), socialization involves the sharing of tacit
knowledge between individuals. It helps exchange knowledge through joint activ-
ities, such as being together in the same environment, rather than through written
or verbal form (Nonaka & Takeuchi, 1995). By transferring ideas and images, ap-
prenticeships allow newcomers to see the way others think and feel. Knowledge is
produced in a group setting, not only through mere acquisition of the individuals
knowledge, but also through the sharing of common understanding, which helps
synergize the individuals knowledge (Fiol, 1994). Social processes play an impor-
tant role in the transition of knowledge from the individual level to the group level
(Walsh, 1995; Weick & Roberts, 1993). Davenport and Prusak (1998) describe how
conversations at the water cooler helped knowledge sharing among groups at IBM.
However, because socialization relies primarily on physical proximity and joint
action, it is not expected to play an important role in knowledge sharing at the or-
ganizational level (Huseman & Goodman, 1999), although this might be changing
due to the rapid progress in communication technologies.
H7: Socialization facilitates perceived group-level KM effectiveness.
Combination processes involve the conversion of explicit knowledge into

more complex sets of explicit knowledge (Nonaka, 1994). Focusing on communi-
cation, diffusion, integration, and systemization of knowledge, combination con-
tributes to knowledge at the group as well as at the organizational level (Nonaka
& Takeuchi, 1995). Combination helps integrate knowledge of group members,
but the new knowledge generated through combination often transcends the group
(Nonaka & Konno, 1998). In fact, Nonaka and Takeuchi (1995) refer to orga-
nizational knowledge creation as the single market differentiator for Japanese
companies, who are able to successfully combine new technological innovations
into novel products throughout the organization, bringing about continuous inno-
vation, and thus competitive advantage. Innovative organizations seek to develop
new concepts that are created, justified, and modeled at the organizational, and
sometimes interorganizational level. Zander and Kogut also suggest that rates of
transfer and imitation . . . [might depend on the ability] to recombine their knowl-
edge to improve the innovation (1995, p. 77). Moreover, complex organizational
processes require the cooperation of various groups within the organization, and
combination supports these processes by aggregating technologies and know-how
(Nonaka, 1994). Indeed, knowledge that is not shared has limited organizational
value (Alavi & Leidner, 1999, 2001).
H8: Combination facilitates perceived group-level KM effectiveness.

H9: Combination facilitates perceived organizational-level KM effec-
tiveness.
Summary of the Research Model

The overall research model and the nine hypotheses are given in Figure 1. Based
on organizational learning theory, knowledge-based theory of the firm, and theory
of knowledge creation, upward influences in perceived effectiveness of KM are
proposed, including the effects of perceived individual-level KM effectiveness on
perceived group-level KM effectiveness (H1) and perceived organizational-level
KM effectiveness (H3), as well as the effect of perceived group-level KM effec-
tiveness on perceived organizational-level KM effectiveness (H2). Moreover, the
theoretical model proposes internalization and externalization to affect perceived
individual-level effectiveness of KM (H4, H5). It also proposes externalization
to affect perceived group-level effectiveness of KM (H6). Both socialization and
combination are proposed to affect perceived group-level effectiveness of KM (H7,
H8). In addition, combination is proposed to affect perceived organizational-level
effectiveness of KM (H9). Hypotheses 49 are consistent with Nonaka (1994).
According to him, individuals act to internalize or externalize knowledge, and so-
cialization aims to let individuals share tacit knowledge. Therefore, socialization
acts at the group level to facilitate the sharing of the individuals mental models and
experiences, yielding sympathized knowledge. Furthermore, combination gives
rise to systemic knowledge at the organizational level, which is directly related
to innovative products.
Figure 1: The theoretical model.
H4 Individual-level
Internalization Perceived KM
Effectiveness
H5
H1
Externalization H6
Group-level H3
Perceived KM
H7 Effectiveness
Socialization
H2
H8
Organizational-level
Combination Perceived KM
H9 Effectiveness
DATA COLLECTION
Preliminary Investigation
Before conducting the survey, we performed a thorough qualitative investigation
of KM at KSC. To understand the important knowledge areas and KM processes at
KSC, we conducted a series of group interviews with representatives of nine groups:
Administration Office, Space Station Hardware Integration Office, Biomedical Of-
fice, Shuttle Processing Directorate, Payload Processing Directorate, Engineering
Development Directorate, Safety and Mission Assurance Directorate, Public Af-
fairs Office, and the Office of KSCs Chief Information Officer (CIO). These inter-
views, which were conducted between February and April 1998, obtained feedback
from a total of 61 individuals at various levels in these nine groups.
Prior to the interviews, the group members were asked to reflect upon the
main areas of knowledge within the organization, and the process through which
knowledge is captured, disseminated, and accessed. During each interview, three
broad steps were pursued. First, the specific types of knowledge and their internal
or external sources and uses were identified. Next, the particular KM needs for
each group were identified. Finally, the interviews were used to identify the KM
tools currently employed, and to brainstorm for possible enhancements in KM.
Following the completion of the qualitative interviews, we examined the notes and
transcripts to prepare for the quantitative survey. At this time, a detailed report
was submitted to KSC. This report identified the top knowledge areas for each of
the organizational subunits at KSC, and provided a set of recommendations for
possible enhancements to the existing KM environment.
Questionnaire Development
The questionnaire was prepared based on the analysis of the notes and transcripts
from the qualitative interviews. We identified 37 KM tools used at KSC that, along
with some additional tools not mentioned in the interviews but highlighted in the
literature (e.g., Nonaka, 1994; Nonaka & Konno, 1998; ODell & Grayson, 1998),
were used to prepare a list of tools. We then examined these tools to avoid possible
overlaps and identify a number of tools supporting each of the four KM processes.
We decided to limit the number of KM tools to 25 to prevent the questionnaire
from becoming excessively demanding. The 25 selected tools are indicated later
(Table 2). The questionnaire included a question (on a 5-point scale) evaluating the
use of each KM tool. The respondents were asked: Please indicate how frequently
each of the following knowledge management processes and tools are used to
manage knowledge at KSC by circling the appropriate number from 1 to 5. The
scale for their answers for the 25 items ranged from 1 = very infrequently,
through 3 = moderate frequency, to 5 = very frequently.
We also developed eleven questions on perceived effectiveness of KM. Three
questions assessed perceived individual-level effectiveness of KM, four questions
measured perceived group-level effectiveness of KM, and four questions mea-
sured perceived organizational-level (i.e., KSC-level) effectiveness of KM. The
respondents were asked: We would like to access your perceived effectiveness of
the knowledge available to you, to your directorate in general, and to KSC at an
overall level. Please indicate the extent to which you disagree or agree with each
of the following statements by circling the appropriate number from 1 to 5. The
scale for their answers for the eleven items ranged from 1 = strongly disagree,
through 3 = neutral, to 5 = strongly agree.
Following the development of the initial questionnaire, feedback was ob-
tained from three employees of KSCs CIOs office (they were not used for the
actual survey). We made some minor modifications based on the suggestions re-
ceived. The questionnaire also included some questions seeking background infor-
mation about the respondent, and questions on some specific types of knowledge.
The questionnaires used for the eight groups differed in these knowledge areas and
in the name of the group on the cover page. They were similar in all other respects.
Questionnaire Administration
The administration officer within each of the eight groups conducted the survey.
The number of questionnaires per group varied from 15 for small groups to 40 for
the large ones. After a discussion between the deputy center director and various
administrative officers, two hundred questionnaires were distributed to potential
respondents. Appendix A indicates the number of questionnaires distributed and
the number of respondents in each group. A letter from the deputy center director
accompanied the surveys, which helped to increase the response rate. A total of
159 completed surveys were received, representing a 79.5 percent response rate.
There was some missing data. Listwise deletion would have produced 156 usable
responses, but the IMPUTE function of LISREL 8.53 enabled the use of one ad-
ditional response, that is, a total of 157 responses. Response rates differed across
groups, being the lowest at Public Affairs and the highest at Shuttle Processing,
but the overall differences across groups were not significant ( 2 = 4.66, degrees
of freedom = 7, p > 0.10).
The respondents were generally quite experienced (average experience of
15.35 years at KSC and 8.40 years at the current group), but were quite diverse in
this regard (standard deviations of about 7 years for both experience in KSC and
experience in the current group). Sixty-two of the respondents were very senior,
being at the level of a director, deputy director, or a chief of a division, while the
remaining 91 respondents who identified their levels were at lower- to middle-
management levels. The respondents usually worked in one or more other groups
at KSC prior to joining their current group, which might have increased their
awareness of KM in areas of KSC beyond their current group. Overall, the sample
of respondents seems to be quite diverse, representing various hierarchical levels,
experiences, and groups.
Follow-Up Visit
To obtain further insights into the empirical results from the analysis of question-
naire data, we conducted 14 follow-up interviews with 18 individuals. We visited
KSC for three days in October 2000. Since the time we conducted the survey, KSC
had reorganized, and the number of directorates and offices had decreased from
23 to 13. During this visit, 11 semistructured interviews (each lasting about an
hour) were conducted with 16 individuals across several subunits. In addition, two
detailed interviews were conducted with the KSC deputy director, and a one-hour
phone interview with another senior executive who performed a key role in KM at
KSC. All 14 interviews were tape recorded and transcribed. The transcripts were
read with special attention to comments about the appropriateness of various KM
processes, some of which are used in the discussion of the results. In addition, we
obtained insights from internal documents, organizational charts, remarks made
by KSC personnel during a presentation on KM, and observations and conversa-
tions during a space shuttle launch. Overall, the follow-up visit helped us to better
understand the results of our empirical analysis, and examine the changes in KM
that occurred over time at KSC, as well as the factors that might have influenced
these changes.
ANALYSIS AND RESULTS

Structural equation modeling, using LISREL 8.53 (Joreskog & Sorbom, 2001), is
employed in this study as the primary data analysis technique. Structural equation
modeling algorithms simultaneously provide an overall assessment of the fit of a
hypothesized model to the data and tests of individual hypotheses. Moreover, they
allow the joint specification and estimation of measurement and structural models
argued to account for observed data. Even when multiple indicators measuring
a latent construct are combined, scale reliabilities can be explicitly incorporated
in the analysis to correct structural estimates for measurement errors. Structural
equation modeling also facilitates testing of alternatives to the original model (Chin
& Newsted, 1995). Finally, structural equation modeling can be used to gain insights
into the direction of influence between research constructs (Judge & Ferris, 1993).
Measurement Model
Following Anderson and Gerbing (1988), we conducted confirmatory factor anal-
ysis to assess the reliability and validity of the multi-item measures for the seven
research constructs. Due to sample-size considerations, two separate confirmatory
factor analyses were conducted for the two broad dimensions, that is, KM pro-
cesses and perceived KM effectiveness. In both measurement models, the variance
of each latent construct was set to unity to set the scale, and the latent constructs
were allowed to correlate (Rich, 1997; Venkatraman, 1989).
Several indices were used to assess the fit of each measurement model. One
of these is the ratio of the 2 value to the degrees of freedom (Joreskog, 1978). A
ratio of less than three indicates a good fit for the hypothesized model (Carmines
& McIver, 1981). The next two indices are the goodness-of-fit Index (GFI) and
the adjusted goodness-of-fit index (AGFI), which adjusts GFI for degrees of free-
dom. They measure how much of the variances and covariances the model jointly
accounts for, and are relatively robust against normality. The GFI and AGFI vary
from 0 to 1, with values above 0.90 considered good and values from 0.80 to
0.90 considered moderate (Bentler & Bonett, 1980). We also examined the root
mean square residual (RMSR), which measures the average difference between
the elements in the sample and hypothesized covariance matrices. Lower values
of RMSR indicate better fit, and a value below 0.05 is considered desirable (Fulk,
1993). Finally, we computed Bentler and Bonnets (1980) normed fit index (NFI),
which indicates the improvement in fit of the hypothesized model over the null
model, in which all observed variables are specified as uncorrelated. The closer its
value is to 1, the better the fit.
Both measurement models included paths from each construct to all items
used to measure it. These paths were examined using t-statistics (for expected factor
loadings), whereas paths that were not specified were evaluated using standardized
residuals and modification indices (Anderson & Gerbing, 1988; Fornell & Larcker,
1981; Hult et al., 2000). Based on these statistics and theoretical considerations,
we deleted items if appropriate (Anderson & Gerbing, 1988; Marcoulides & Hick,
1993; Mentzer, Flint, & Hult, 2001).
Table 1 provides the results for the measurement model for perceived KM ef-
fectiveness. Based on standardized residuals and modification indices, we dropped
two of the eleven items measuring perceived KM effectiveness. The two excluded
items are identified in footnotes (b) and (c) in Table 1. The remaining nine items
loaded as expected, with all the s significant at p 0.001. Overall model fit was
excellent, with GFI, AGFI, and NFI all exceeding 0.90, and RMSR being below
0.05.
Table 2 provides the results for the measurement model for KM processes.
Based on standardized residuals and modification indices, we dropped 9 of the 25
measuring KM processes. Footnote (b) for Table 2 identifies these items. Appendix
B summarizes the rationale for the use of each of the remaining 16 items to measure
the four KM processes. These items loaded as expected, with all the s significant
at p 0.001, as shown in Table 2. Overall model fit was good, with GFI and NFI
over 0.90 and AGFI of 0.87, although the RMSR was 0.06.
Reliability of the multi-item scale for each construct was measured using
Cronbach alphas and composite reliability measures. Both measures of reliability
Table 1: Measurement of perceived knowledge management effectiveness.

Items sa
Scale 1: Perceived Individual-level KM Effectiveness
You are satisfied with the availability of knowledge for your tasks .85
The available knowledge improves your effectiveness in performing your tasks .65
You are satisfied with the management of knowledge you need .78
Scale 2: Perceived Group-level KM Effectivenessb
You are satisfied with knowledge sharing among individuals at your directorate .81
The available knowledge improves the effectiveness of your directorate .67
You are satisfied with the management of knowledge at your directorate .96
Scale 3: Perceived Organizational-level KM Effectivenessc
You are satisfied with the knowledge available for various tasks across KSC .82
You are satisfied with knowledge sharing among various directorates at KSC .66
You are satisfied with the management of knowledge at KSC .95
Overall Fit:
2 = 11.04
Degrees of freedom = 20
2 /d.f. = 0.55
p-value = 0.05
GFI = 0.99
AGFI = 0.97
RMSR = 0.03
NFId = 0.99
a
Maximum likelihood estimators of s are reported, but these are the same as the
standardized estimates since the variances of the underlying constructs are standardized at
unity. All t-values are significant at the 0.001 level, with the lowest t-value being 9.02.
b
One item expected to load with the items on this scale (You are satisfied with the
knowledge available for the tasks in your directorate) was dropped based on the
exploratory factor analysis.
c
One item expected to load with the items on this scale (The available knowledge
improves KSCs overall effectiveness) was dropped based on the exploratory factor
analysis.
d
Based on null model with 2 = 1524.20 and 36 degrees of freedom.
were above the recommended minimum standard of 0.60 (Bagozzi & Yi, 1988;
Baker, Parasuraman, Grewal, & Voss, 2002; Nunnally, 1978) for all seven con-
structs, and above 0.70 for six of the seven constructs. Table 3 summarizes the
results for reliabilities, and convergent and discriminant validities, for all the con-
structs.
Convergent validity was assessed using the t-statistics for the path coefficients
from the latent constructs to the corresponding items. According to Anderson and
Gerbing, Convergent validity can be assessed from the measurement model by
determining whether each indicators estimated pattern coefficient on its posited
underlying construct factor is significant (greater than twice its standard error)
(1998, p. 16). As mentioned above, and shown in Tables 1 and 2, all the path
coefficients from the seven constructs to the 25 measures are statistically significant,
with the lowest t-value for the items measuring perceived KM effectiveness being
9.02 and the lowest t-value for the items measuring KM processes being 5.65. That
Table 2: Measurement of knowledge management processes.

Items sa
Scale 1: Externalizationb
A problem-solving system based on a technology like case-based reasoning .70
Groupware and other team collaboration tools .73
Pointers to expertise (skills yellow pages) .65
Modeling based on analogies and metaphors .61
Capture and transfer of experts knowledge .59
Scale 2: Combination
Web-based access to data .85
Web pages (Intranet and Internet) .78
Databases .84
Repositories of information, best practices, and lessons learned .53
Scale 3: Socialization
Cooperative projects across directorates .71
The use of apprentices and mentors to transfer knowledge .64
Brainstorming retreats or camps .63
Employee rotation across areas .54
Scale 4: Internalization
On-the-job training .63
Learning by doing .79
Learning by observation .59
Overall Fit:
2 = 129.50
Degrees of freedom = 96
2 /d.f. = 1.35
p-value = 0.02
GFI = 0.91
AGFI = 0.87
RMSR = 0.06
NFIc = 0.91
a
Maximum likelihood estimators of s are reported, but these are the same as the
standardized estimates since the variances of the underlying constructs are standardized at
unity. All t-values are significant at the 0.001 level, with the lowest t-value being 5.65.
b
Nine additional items (Decision support systems, Chat groups/Web-based discussion
groups, Face-to-face meetings, Case studies and stories; Simulations and game play-
ing; Drawing inferences from trends in historical data; Development of prototypes;
Learning from prototypes; and Learning from concept maps and expert system), which
had been included to measure KM processes, were dropped during the confirmatory factor
analysis as they significantly loaded on multiple dimensions.
c
Based on null model with 2 = 1376.85 and 120 degrees of freedom.
all the t-values considerably exceed the standard of 2.00 (Anderson & Gerbing,
1988) indicates satisfactory convergent validity for all seven constructs.
Discriminant validity was assessed in three ways (Baker et al., 2002). First,
the confidence interval for each pairwise correlation estimate (i.e., two standard
errors) should not include 1 (Anderson & Gerbing, 1988). This condition was
satisfied for all pairwise correlations in both measurement models. Second, for each
construct, the percentage of variance extracted should exceed the constructs shared
Table 3: Validities, intercorrelations, and descriptive statistics (n = 157).
Perceived KM Effectiveness
KM Processes
Individual- Group- Organization-
Combination Externalization Internalization Socialization Level Level Level
Mean 3.25 1.96 4.11 2.70 3.33 3.24 2.71
Standard Deviation 0.86 0.73 0.76 0.76 0.83 0.91 0.86
Number of Items 4 6 3 4 3 3 3
Sabherwal and Becerra-Fernandez
Cronbach Alpha 0.80 0.79 0.77 0.66 0.81 0.83 0.85

Composite Reliability 0.79 0.80 0.78 0.66 0.82 0.82 0.87
Extracted Variance 0.50 0.44 0.54 0.34 0.61 0.61 0.69
Shared Variances 0.28, 0.28, 0.12 0.28, 0.25, 0.00 0.00, 0.12, 0.08 0.25, 0.28, 0.08 0.56, 0.52 0.52, 0.59 0.56, 0.59
Correlationsa
Combination
Externalization 0.41
Internalization 0.28 0.06
Socialization 0.38 0.39 0.21
Perceived Individual-Level 0.42 0.27 0.21 0.32
KM Effectiveness
Perceived Group-Level KM 0.43 0.35 0.31 0.36 0.61
Effectiveness
Perceived Organization-Level 0.48 0.38 0.17 0.40 0.60 0.65
KM Effectiveness
a
Significance levels: p .05; p .01; p < .001; all one-tailed.
239
variance with every other construct (i.e., the square of the correlation) (Fornell &
Larcker, 1981; Hult et al., 2000). As may be seen from Table 3, this condition
is also satisfied for all the constructs. For example, the extracted variance for
combination is 0.50, which exceeds its shared variances with externalization (0.28),
internalization (0.28), and socialization (0.12). Finally, within each measurement
model, we constrained the correlation between each pair of constructs, one at a
time, to be equal to 1 (Anderson & Gerbing, 1988; Hult et al., 2000), and then
performed a 2 test comparing this model to the model freeing that correlation.
In all cases the 2 difference was significant at p 0.001 level, thereby further
indicating discriminant validities among all pairs of constructs in each measurement
model.
Since all seven constructs were measured using items in a questionnaire
completed by a single respondent, we next examined whether common method
variance is a serious issue. This was done in two different ways. First, Harmans
one-factor test (Podsakoff & Organ, 1986) was conducted. In this test, all the items
are entered together into a factor analysis, and the results of the unrotated factor
solution are examined. If substantial common method variance is present, either
a single factor would emerge, or one general factor would account for most of
the covariance in the independent and criterion variables (Podsakoff & Organ,
1986). In this study, all the 25 items, including 16 items measuring KM processes
and 9 items measuring perceived KM effectiveness, were included in a principal
components factor analysis. This analysis produced six factors, with the first factor
explaining 30 percent of the variance. Moreover, no general factor was apparent in
the unrotated factor solution (Scott & Bruce, 1994). In the second test of common
method variance using confirmatory factor analysis, we included the 25 items,
the seven latent constructs (the four KM processes and the three KM satisfaction
constructs), and an eighth construct that was linked to all 25 items. The extracted
variance for this common latent construct was 20 percent, further indicating that
common method variance was not a major problem in this study (Baum, Locke, &
Smith, 2001).
Overall, a series of statistical tests, including multiple tests of reliability, con-
vergent and discriminant validities, and assessments of common method variance,
support the overall measurement quality (Gerbing & Anderson, 1992). Therefore,
the measures seem adequate for further analysis.
Intercorrelations and Descriptive Statistics

Table 3 also provides the intercorrelations and descriptive statistics. Externalization
processes are used to a much lesser extent (mean of 1.97 on a 5-point scale)
than internalization processes (mean of 4.12) at KSC. As discussed earlier, the
reliabilities for the various measures are acceptable. Examination of the correlation
coefficients indicated that all the correlations corresponding to the hypotheses are
supported. However, correlation coefficients should be considered cautiously, as
they focus only on a pair of variables rather than the entire set of variables.
Before examining the structural models, we conducted post hoc Scheffe tests
comparing the seven research variables across the eight groups. These tests found
no two groups to be significantly (at p < 0.05 level) different in six of the seven
variables. For internalization, 2 of the 28 comparisons were significant. Thus, for

the seven variables, only 2 of the 196 pairwise comparisons (i.e., about 1 percent)
produced significant differences, which is clearly below the 5 percent significant
differences that would be expected due to chance alone. Given these results, and
since the individual is the unit of analysis, it was deemed appropriate to combine the
responses across groups for the analysis of the structural models. However, we did
later validate the results using multiple regressions with individual characteristics
and dummies for groups as control variables.
Structural Model
The structural model was tested following the validation of measures. Considering
the sample size, the supportive measurement results, and the large number of
total indicators, summated indicators (the means of the items comprising each
scale) were used (Babin & Boles, 1998). To adjust for measurement errors in
scale values, we set the path from each latent variable to its measure equal to the
square root of the scale reliability (Joreskog & Sorbom, 1989; Wayne & Liden,
1995; Williams & Hazer, 1986). The error variances (i.e., the diagonal elements
of the and matrices) were set equal to one minus reliability (Hult et al.,
2000; Joreskog & Sorbom, 1989). Consistent with prior studies (e.g., Buenger
et al., 1996; Dean, Yoon, & Susman, 1992), the rest of the model specification
was as follows: , the variance-covariance matrix of , was set to symmetrical,
recognizing the possibility that the independent constructs (i.e., the KM processes)
may be interrelated. Moreover, , the variance-covariance matrix of the residuals
in structural equations ( ), , the variance-covariance matrix of the measurement
errors for the dependent variables (), and , the variance-covariance matrix of
the measurement errors for the independent variables (), were set to diagonal.
We first estimated the hypothesized theoretical model, and then revised it
based on t-statistics and modification indices. This is done by either constraining
(in the case of a low t-statistic) or relaxing (in the case of large modification in-
dices or standardized residuals) certain parameters, and moving toward a model
that better fits the empirical data (Anderson & Gerbing, 1988; Joreskog, 1978;
Medsker, Williams, & Holohan, 1994). Constrained-parameter models enable de-
tection of potential errors of commission (including unnecessary relationships),
while relaxed-parameter models reveal errors of omission (excluding relationships
that might have theoretical and practical significance) (McAllister, 1995). How-
ever, the structural model was only modified in ways that made theoretical sense
(Marcoulides & Hick, 1993).
Several models were examined to test the hypotheses included in the theoret-
ical model (see Figure 1). Table 4 provides the results. We first tested the theoretical
model (T) with all the hypothesized paths freed and all other paths fixed to zero. As
indicated by the various indices in Table 4, this model performs fairly well but the
p-value for the 2 is below 0.05. Moreover, three of the pathsfrom externaliza-
tion, socialization, and combination to perceived group-level effectivenesshave
t-statistics that are not significant at p 0.05 (one-tailed). Constraining the path
with the lowest t-value (combination to perceived group-level effectiveness) pro-
duced better results, with the p-value for the model exceeding 0.05. In this revised
242
Table 4: Results for the structural model.
Theoretical Revised Revised Emergent
model (T) Model 1 (R1) Model 2 (R2) Model (E)
Model Fit
2 11.97 12.04 12.56 14.83
Degrees of Freedom 6 7 8 9
2 / Degrees of Freedom 2.00 1.72 1.57 1.65
p-value 0.04 0.10 0.13 0.10
GFI 0.98 0.98 0.98 0.97
AGFI 0.90 0.91 0.92 0.91
RMSR 0.02 0.02 0.02 0.02
NFI 0.98 0.98 0.98 0.97
Paths Excluded from None H8: Combination > H8: Combination > H8: Combination >
the Theoretical Group-level KM Group-level KM Group-level KM
Model effectiveness effectiveness; effectiveness;
H6: Externalization > H6: Externalization >
Group-level KM Group-level KM
effectiveness. effectiveness;
H3: Individual-level KM
effectiveness >
Organization-level KM
effectiveness.
Nonsignificanta H6: Externalization > Group-level H6: Externalization > H3: Individual-level KM
Paths KM effectiveness (t = 0.72); Group-level KM effectiveness >
H7: Socialization > Group-level effectiveness (t = 0.70). Organization-level KM
KM effectiveness (t = 1.51); effectiveness (t = 1.64).
H8: Combination > Group-level
KM effectiveness (t = 0.29).
a
These paths were not significant at p 0.05 (one-tailed).
An Empirical Study of the Effect of Knowledge Management
model (R1), one of the other two paths that were not originally significant was sig-
nificant, but the other pathfrom externalization to group-level satisfactionwas
still not significant. We next constrained this path, and this produced comparable
overall results. In this revised model (R2), the path from perceived individual-level
effectiveness to perceived organization-level effectiveness was no longer signif-
icant ( p 0.05, one-tailed). Dropping this path produced a model in which all
the paths were significant. In this emergent model (E) all the fit indices are also
excellent.
The emergent model (model E in Table 4) is one that can be: (a) understood
theoretically; and (b) best fits the empirical data. Figure 2 provides this model and
the associated path coefficients. As may be seen from this Figure, hypotheses 1, 2, 4,
5, 7, and 9 are empirically supported, but hypotheses 3, 6, and 8 are not. Internaliza-
tion and externalization affect perceived individual-level effectiveness, socializa-
tion affects group-level effectiveness, and combination affects organization-level
effectiveness. Moreover, individual-level KM effectiveness affects group-level KM
effectiveness, and group-level KM effectiveness affects organization-level KM ef-
fectiveness.
We examined the indirect effects corresponding to the three unsupported
hypotheses. The indirect effects are significant from perceived individual-level ef-
fectiveness to perceived organization-level effectiveness (through perceived group-
level effectiveness) (t = 5.47, p 0.001) and from externalization to group-level
KM perceived effectiveness (through perceived individual-level KM effectiveness)
(t = 3.65, p 0.01). The indirect effect of combination on group-level KM per-
ceived effectiveness is however zero, as there is no indirect path for this effect.
Validation Regressions
The results of structural equation modeling were validated using multiple regres-
sions (McAllister, 1995). Regressions were conducted for each dependent variable,
with a number of control variables, including the respondents experience in the
current group, the respondents experience in other groups at KSC, the respondents
seniority level (number of levels below the director of KSC), and seven dummy
variables representing the eight groups. Rather than entering all the control vari-
ables, they were included in a stepwise fashion before entering the independent
variables included in the model. This controls for the factors that influence the
dependent variables while preventing the regression results from being affected
by irrelevant, nonsignificant factors. Table 5 provides the regressions results for
various dependent variables.
As shown in the table, the regressions found four of the control variables to
influence the dependent variables. Respondents from the Biomedical Office (group
3) perceived individual-level KM effectiveness to be higher than the respondents
from other groups, whereas respondents from Safety and Mission Assurance Di-
rectorate (group 7) perceived it to be lower than the respondents from other groups.
Respondents from the International Space Station Hardware Office (group 2) and
the Payload Processing Directorate (group 5) perceived group-level KM effective-
ness to be higher than the respondents from the other groups. No control variable
significantly influenced perceived KM effectiveness at the organizational level.
Figure 2: The structural model.a,b
1
Internalization 0.35**
PROINT
3
Individual-Level
Perceived KM SATIND
0.46*** Effectiveness
1
Externalization
PROEXT 0.67***
2 2
0.31**
Socialization Group-Level
PROSOC Perceived KM SATGRP
4
Effectiveness
2
0.74*** 3
Combination 0.19* Organization-Level

PROCOM 1 Perceived KM SATORG
Effectiveness
3
Hypothesized and empirically supported a: To prevent further complication, the measurement errors for
dependent variables () and independent variables (), and
,
s to dependent and independent variables are not shown.
Hypothesized but not empirically supported b: Statistics are standardized path coefficients.
Significance levels: * p < 0.05; ** p < 0.01; *** p < 0.001.
Although the control variables had above-significant effects, the regression

results support the findings of the structural equation modeling. Each of the six
dependent variables from the emergent models 1 and 2 is significantly influenced by
the corresponding independent variables. The R2 values range from 0.156 to 0.461,
and all the regression equations are significant beyond the 0.01 level. These results
are reassuring as they suggest that the LISREL models are properly specified.
DISCUSSION
Findings
Recognizing the importance of viewing KM perceived effectiveness at the individ-
ual, group, and organizational levels, we began with a simple question: how do the
KM processes influence the KM perceived effectiveness at these three levels? We
next developed a research model, including nine hypotheses, to pursue this question
with greater specificity. We tested both measurement and structural models using
empirical data from NASA-KSC and structural equation modeling techniques. In
this section, we summarize our overall findings, while distancing ourselves from
the complexities of the data and the analytical procedures. In interpreting the re-
sults, we draw upon a few of the comments made in the two rounds of interviews
conducted before and after the survey.
The emergent model indicates how KM processes impact perceived
individual-level, group-level, and organizational-level KM effectiveness. Empirical
results support six of the nine hypotheses. One hypothesis that was not supported
Table 5: Validation of results using regressions with control variables.a,b
Significant Control
Dependent Independent Standardized R2 Variables
Variable Variables Beta (t-value) (Adjusted R2) F-value (standardized betas)
Individual-Level Internalization 0.15 0.156 6.74 Dummy for
Sabherwal and Becerra-Fernandez
KM Effectiveness Externalization 0.26 (0.133) group 3c (0.18 );

Dummy for
group 7 (0.17 ).
Group-Level KM Individual-Level 0.48 0.431 27.60 Dummy for
Effectiveness KM Effectiveness (0.415) group 2 (0.17 );
Socialization 0.20 Dummy for
group 5 (0.18 )
Organizational- Group-Level KM 0.54 0.461 63.33 None
Level KM Effectiveness (0.454)
Effectiveness Combination 0.25
a
Significance levels (2-tailed): p .05; p .01; p 0.001.
b
n = 157.
c
The groups corresponding to all group numbers (including 2, 3, 5, and 7, mentioned in this table) are given in Appendix A.
245
concerned the relationship between externalization and perceived group-level KM

effectiveness (H6). However, examination of the indirect effects revealed that ex-
ternalization significantly affects perceived group-level KM effectiveness through
perceived individual-level KM effectiveness. We did not find any support for the
effectdirect or indirectof combination on perceived group-level KM effective-
ness (H8).
The emergent model shown in Figure 2 seems simpler than the hypothesized
model (Figure 1). It suggests that internalization and externalization affect per-
ceived individual-level effectiveness of KM, only socialization directly influences
perceived group-level effectiveness of KM, and only combination directly affects
perceived organizational-level effectiveness of KM. Moreover, the interrelation-
ships between individual, group, and organizational levels reinforce the view that
aggregation of knowledge to higher hierarchical levels is essential for knowledge
growth (e.g., Holtshouse, 1998).
Internalization and externalization processes focus mainly at the individ-
ual level. Together, they help unlock the knowledge held by the individual
(Holtshouse, 1998). This is not surprising, since internalization is intrinsically
related to learning and externalization is essential to knowledge articulation. How-
ever, KSC currently relies more on internalization than externalization. The mean
scores for internalization (4.12) and externalization (1.97) indicated this clearly.
This finding was reinforced by the qualitative interviews. One senior employee at
the Space Station Hardware Integration Office made the following remarks on the
importance of, and difficulties in, using externalization:
There is some knowledge that comes from experience, and this knowledge
does not get written down, so sometimes to capture this knowledge we would
have someone training another person. . .
It would be nice if we knew where all the experts are so that we can quickly
locate those people. . .
We were trying to put files with information like lessons learned within the
shared drive but it is not as easy to locate as if we were to put it in a Web page.
Socialization plays an important role in KM at the group level, but as expected,

not at the organizational level. Several individuals in the interviews indicated that
KSC makes considerable use of mentoring, a socialization technique. For example,
one informant remarked,
Engineers had mentors who would transfer his knowledge to the younger engi-
neer. This was a remarkably successful program. The engineers would tell them
all the stories, e.g., Apollo. The old Apollo crowd of engineers was assigned
as mentors. But now we are losing people, so how will we capture knowledge?
However, the interviewees also suggested that socialization should be sup-

plemented by more formal techniques. For example, the Training and Development
Center director remarked, We need new alternative ways to share knowledge other
than the actual method of mentoring a new employee by an assigned mentor.
Combination contributes at the organizational level but not at the group level.
The director of administration also highlighted the desire to use combination: We
have teams being formed intuitively given that our workers have had knowledge
of each others competencies but we would like to have a database list of the
competencies to be able to form teams.
The above findings may be related to the specific nature of KSC. The quali-
tative interviews indicated that KSC emphasizes explicit knowledge. Three factors
could be related to this emphasis: (a) KSC focuses on engineering and scientific
discovery; (b) KSC faces considerable documentation requirements due to gov-
ernmental regulations and safety stipulations; and (c) KSC has been encountering
increased turnover. The emphasis on explicit knowledge explains the desire for
greater externalization processes. Moreover, there is a commonly perceived need
to enhance knowledge sharing across various groups, which could be attributed to
(a) NASAs increased focus on international collaborations and (b) the increasingly
complex nature of KSCs tasks, which necessitate inputs from various directorates
to aggregate technologies and know-how. This desire for intergroup collaboration,
combined with the preference for codification rather than personalization, might
explain why combination processes, which help integrate several streams of ex-
plicit knowledge, contribute to perceived organizational-level KM effectiveness.
In contrast, socialization processes, which integrate more tacit knowledge, do not
seem to contribute to perceived organizational-level KM effectiveness.
Limitations
The findings of this study should be treated with caution due to some inherent
limitations. First, we focused on one large organization. This choice enabled us to
examine the research questions with considerable richness, thereby enhancing the
studys internal validity. It also helped us examine KM in an organization where
knowledge seems to be of paramount importance. However, the generalizability
of our findings is potentially limited by the fact that all the respondents belong to
the same organization, and also that there were several respondents from each of
eight directorates or offices. Like other organizations, KSC has its unique strategic,
structural, and cultural attributes, and it remains to be seen whether our results can
be generalized to other kinds of organizations.
Second, this study was cross-sectional and static in nature. If we had con-
ducted the study longitudinally, we may have been better able to assess the temporal
ordering of the research constructs. A longitudinal investigation would have pro-
vided further insights into the dynamics of the effects of KM processes as well
as the dynamics across various levels. This is especially true since some of the
effects included in the models may take time to occur. For example, socialization
might influence perceived organizational-level KM effectiveness over time but not
in the short run. This study could not assess the nature of such time lags, due to its
cross-sectional nature. Nevertheless, the use of cross-sectional correlational data
necessitates caution in interpreting the results and in drawing causal inferences
concerning the hypothesized relationships.
Third, like most social science models, ours excludes some potentially im-
portant factors. We only considered the KM processes as affecting perceived KM
effectiveness at various levels. To prevent the analysis from being overwhelmingly
complex, we did not include other factors that might affect perceived KM effective-
ness. Even some individual attributes and group characteristics, which were either
available or easily obtainable, were excluded to maintain focus and test a model
that, given our sample size, can be adequately tested through structural equation
modeling.
Fourth, some of the measures might benefit from further development. The
use of each KM process was measured indirectly, by assessing the use of KM
tools supporting each process. Moreover, although the measure of socialization
performed satisfactorily with respect to reliabilities as well as extracted variance,
it could be improved further. Its reliability was above 0.60 but below 0.70, and the
extracted variance for it was above the shared variance with other KM processes
but below 0.50. This highlights the inherent difficulty in measuring the use of
socialization processes through a questionnaire survey. Moreover, some of the
measures, including those of perceived KM effectiveness at the three levels, use
only three items each. While this is considered adequate for confirmatory factor
analysis using LISREL (Anderson, 1987), the use of additional items might help
capture the rich constructs to a greater extent.
Finally, the study is based on self-report data incurring the possibility of
common method variance and respondent bias (e.g., social desirability effect).
However, our tests of common method variance do not find it to be a significant
factor in this study. This, combined with the fact that the study reported good psy-
chometric properties based on multiple assessments (reliabilities and convergent
and discriminant validities) and produced results that were robust across analyses
(structural equation modeling and regressions), supports the validity of the data
and the results.
Overall, the above limitations of the study constrain its generalizability to
other organizations. However, we believe that despite these limitations, this study
makes some valuable contributions to practice and research. These contributions
are discussed next.
Implications for Practice

We developed and tested a theoretical model concerning the effect KM processes
have on perceived KM effectiveness at individual, group, and organizational levels.
The results provide some potential valuable insights for practice on KM.
First, the study provides empirical support to the argumentinherent in orga-
nization learning theory, the knowledge-based theory of the firm, and the theory of
knowledge creationthat the impacts of KM move up from individuals to groups
and then to the entire organization. Perceived individual-level KM effectiveness
impacts perceived organization-level KM effectiveness, although this effect does
not occur directly, but through its effect on perceived group-level KM effectiveness
and the effect of perceived group-level KM effectiveness on perceived organization-
level KM effectiveness. Thus, this study highlights the importance of individual-
level knowledge. We believe that this is an important finding, as it demonstrates the
importance of individual-level learning not only to the individuals and their groups,
but to their entire organization as well. Organizations that continue to invest in the
intellectual growth of their individuals will continue to reap rich returns via growth
in organizational knowledge.
Second, the emergent model provides insights into the effects of Nonakas
(1994) KM processes at each of three levelsindividual, group, and organization.
The results should be useful in identifying the KM tools that should be used under
different circumstances.
Third, the paper highlights the importance of combination. Combination pro-
cesses, which enable the integration of chunks of explicit knowledge, seem to con-
tribute most to organizational knowledge. As suggested in prior literature (e.g.,
Conner & Prahalad, 1996), the use of hierarchical influences reduces the need for
individuals to absorb knowledge, as long as they are provided the necessary explicit
knowledge, which combination process facilitate. These findings are reinforced by
the lack of evidence that socialization processes contribute at the organizational
level. Furthermore, socialization as a knowledge integration process is useful as
long as there exists common knowledge among the members. Clearly, this com-
mon knowledge is significant at the group level and decreases at the organizational
level. Clearly, further research is needed to examine whether these conclusions are
specific to KSC, generalizable to other similar organizations (i.e., those operating
in complex technical fields and having a considerable need to adhere to regula-
tions) but not to other kinds of organizations, or generalizable to a wide range of
organizations.
Fourth, the emergent model indicates that internalization and externalization
processes are intrinsic to individual learning. Even though these processes do not
directly contribute to perceived organizational-level KM effectiveness, they con-
tribute to the basic building block of organizational knowledgethe knowledge
of its individuals. In a similar vein, socialization processes contribute at the group
level, apparently by enabling the integration of the tacit knowledge of the group
members.
Another striking finding of this study is the low level of use of external-
ization processes, especially when compared to internalization. This finding may
be due to several possible reasons. First, it may have been a consequence of the
more technical nature of the items used to measure externalization. If that is the
case, it would be interesting to see whether externalization processes benefit more
from technological progress. Alternatively, the low mean of externalization might
simply reflect that organizations are only beginning to experiment with them; ex-
ternalization processes require new approaches, unlike internalization processes
that benefit from teaching and training methods. The high means of internalization
might also be because the respondents possibly feel more proud of internalization
processes due to their more personal nature, as compared to the more formal and
less personal externalization processes. Finally, high means of internalization may
also be reflective of NASA-KSCs emphasis on higher education and continuous
learning of its employees. At any rate, this study suggests that ways of improving
externalization processes might represent a potential area in which some organi-
zations might be able to outperform their competitors. New technical offerings to
support KM, such as the emerging array of KM systems, may provide the necessary
platform to adequately support externalization processes.
Directions for Future Research

This paper also has several implications for future research on KM. First, it con-
tributes to the literature in this area by developing and empirically testing a research
model that relates KM processes to their perceived effectiveness at various levels.
Our tests of this model did not support the relationships between socialization and
perceived organizational-level effectiveness of KM, and between externalization
and perceived group-level effectiveness of KM. Further investigation of these non-
findings, as well as the significant findings captured in the emergent model, is
needed to assess whether they can be generalized to other organizations.
Second, this paper develops several measures that should be useful for future
research on KM. These include measures of Nonakas (1994) four KM processes,
and the perceived effectiveness of KM at all levels. We thoroughly tested the scales
using structural equation modeling and other techniques.
Third, future research may benefit from the rigorous methodology this pa-
per uses to investigate KM. Based on the view that KM would appear different
to various individuals in an organization, we collected questionnaire data where
the individuals were respondents about their perceptions, rather than informants
about organizational attributes, and then used the data to test structural models that
enabled simultaneous investigation of various relationships.
Fourth, similar studies could be conducted at other knowledge intensive,
albeit nongovernmental, organizations, such as consultancies, and the results com-
pared to our results. Conducting the study across additional organizations may
further serve to validate our results.
Finally, this paper suggests that longitudinal research may be needed to ex-
amine the KM processes, their relationships with each other (e.g., Nonaka, 1994,
proposes a spiral model through which the processes build on each other), and
the ways in which they affect perceived effectiveness of KM. Examination of se-
quences of events in the KM process (e.g., Sabherwal & Robey, 1993), as well
as explicit consideration of the motivations and choices of individuals (Zander
& Kogut, 1995), may help in pursuing this goal. [Received: February 28, 2002.
Accepted: March 26, 2003.]
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APPENDIX A: Background Information on the KSC Groups

Total No. of No. of Surveys No. of
Groupa Description Employees Distributed Respondents
1. Administration This office is responsible for 32 15 12
Office contractor industrial relations,
the civil service workforce and
position management program,
the civil service personnel
program, internal control
activities, continual
improvement activities, and
management overview and
coordination of information
services.
2. Space Station This office is responsible for the 66 25 22
Hardware management and integration of
Integration the overall ground process for
Office all U.S. launched elements,
from assembly and checkout
through verification and
launch.
3. Biomedical This office plays a key role in 46 20 15
Office ensuring KSC meets its
mission by providing medical,
environmental, science and
continued on next page
APPENDIX A: (continued) Background Information on the KSC Groups

engineering expertise and
analytical laboratory support
to KSC activities and to the
conduct of life sciences
operations in ecological
monitoring and life sciences
life experiment programs.
4. Shuttle This directorate provides 248 20 14
Processing preflight, launch, landing, and
Directorate recovery services for KSC. It
includes Shuttle Vehicle
Engineering, which is
responsible for the engineering
management and technical
direction of preflight, launch,
landing, and recovery activities
for all space shuttle vehicles
and integration of payloads;
and Ground Systems, which is
responsible for the engineering
management and technical
direction of the ground
facilities and equipment used
in shuttle processing.
5. Payload This directorate is responsible for 211 40 38
Processing the control and development of
Directorate new projects, overall payload
project integration,
configuration control, contract
and budget management, and
coordination of technology
development, transfer, and
outreach. It also provides
support for special projects.
6. Engineering This directorate has over 30 years 193 35 28
Development of experience in advanced
Directorate engineering and applied
research and development with
ground and flight systems. It
focuses on planning,
development, and application
of advanced technologies at
KSC, producing a knowledge
base and design expertise that
is critical to maintaining the
efficiency, effectiveness, and
safety for the KSC launch and
landing mission.
7. Safety and This directorate specializes in 38 30 24
Mission assessing space shuttle issues
Assurance and real-time problems from
Directorate the safety point of view.
continued on next page
APPENDIX A: (continued) Background Information on the KSC Groups

It maintains a team of
engineers organized by vehicle
systems to identify potential
safety concerns associated with
daily shuttle processing and
hardware problems. It is also
responsible for assuring the
safety of the employees
working in flight hardware and
the facilities. It also deals with
special hazardous materials
involved in processing the
flight hardware, particularly
hazardous commodities such as
toxic, hyperbolic, and
cryogenic materials.
8. Public Affairs This office is responsible for 31 15 6
Office public information, media
relations, aerospace education
for grades K12, university
affairs, manned flight
awareness, community
relations, tours and briefings of
distinguished visitors, guest
activities, and the KSC visitor
complex.
a
These groups existed at the time of the survey (1999). They were later affected by KSCs
reorganization in 2000.
APPENDIX B: MEASURES OF KM PROCESSES

The table below indicates some of the theoretical justification for the KM tools
used to measure the four KM processes. Two specific points deserve further atten-
tion. First is the difference between problem-solving systems (based on technology
like case-based reasoning) and databases. The development of problem-solving
systems typically requires the development of a database of sorts. Yet, the database
is a representation of an experts cognitive model, which can only be created
through externalization of the experts knowledge, typically in collaboration with
a knowledge engineer. Databases, on the other hand, serve to combine knowledge,
information, and data that has already been articulated and made explicit; therefore
we consider them to support combination processes. Similarly, on-the-job training
(OJT) is differentiated from the use of apprentices and mentors to transfer knowl-
edge, because OJT may not include certain aspects of mentorship. For example,
prospective taxi drivers in London are required to ride with an experienced taxi
driver prior to applying for their drivers license. This mentorship is clearly a social-
ization process, and new prospective drivers acquire their knowledge about getting
around in London tacitly, rather than trying to memorize or deduce directions from
maps. This is clearly not the case in the United States, where taxi drivers get their
training on the job, without the opportunity to be mentored.
Quotes Illustrating Basis for Items Measuring KM Processes

Items Illustrative Quotes
Items Measuring Externalization
A problem-solving In practice, externalization is supported by two factors . . . the
system based on a second involves translating the tacit knowledge
technology like of . . . experts . . . may require deductive/inductive
case-based reasoning reasoning. (Nonaka and Konno, 1998, p. 44)
Groupware and other In practice, externalization is supported by two
team collaboration factors . . . one is the articulation of tacit
tools knowledge . . . dialogue, listening and contributing to the
benefit of all participants strongly supports
externalization. (Nonaka, and Konno, 1998, p. 44).
Pointers to expertise In practice, externalization is supported by two
(skills yellow pages) factors . . . the second factor involves translating the tacit
knowledge of customers or experts into readily
understandable forms. (Nonaka, and Konno, 1998, p. 44)
Modeling based on The externalization mode is triggered by successive rounds
analogies and of meaningful dialogue. In this dialogue, the sophisticated
metaphors use of metaphors can be used to enable team members to
articulate their own perspectives . . . It follows from the
preceding discussion that tacit knowledge may be
transformed into explicit knowledge by (1) recognizing
contradiction through metaphor, and (2) resolving them
through analogy. (Nonaka, 1994, pp. 2021)
Capture and transfer of In practice, externalization is supported by two
experts knowledge factors . . . the second factor involves translating the tacit
knowledge of customers or experts into readily
understandable forms. (Nonaka, and Konno, 1998, p. 44)
Items Measuring Combination
Web-based access to data Combination is a process of systemizing concepts into a
knowledge system. . . . Individuals exchange and combine
knowledge through such media as . . . computerized
communication networks. (Nonaka and Takeuchi, 1995,
p. 67).
Web pages (intranet and Combination is a process of systemizing concepts into a
Internet) knowledge system. . . . Individuals exchange and combine
knowledge through such media as . . . computerized
communication networks. (Nonaka and Takeuchi, 1995,
p. 67).
Databases Combination is a process of systemizing concepts into a
knowledge system. . . . Reconfiguration of existing
information through sorting, adding, combining, and
categorizing of explicit knowledge (as conducted in
computer databases) can lead to new knowledge. (Nonaka
and Takeuchi, 1995, p. 67).
Repositories of The combination of explicit knowledge is most efficiently
information, best supported in collaborative environments utilizing
practices, and lessons information technology. The use of on-line
learned networks . . . documentation, and database . . . has been
growing rapidly over the last decade, enhancing this
conversion process. (Nonaka and Konno, 1998, p. 46).
continued
(continued) Quotes Illustrating Basis for Items Measuring KM Processes

Items Illustrative Quotes
Items Measuring Socialization
Cooperative projects The sharing of tacit knowledge among multiple individuals
across directorates with different backgrounds, perspectives, and motivations
becomes the critical step for organizational knowledge
creation to take place. . . . The typical field of interaction is
a self-organizing team, in which members from various
functional departments work together to achieve a common
goal. These examples show that the first phase of the
organizational knowledge creation process corresponds to
socialization. (Nonaka and Takeuchi, 1995, p. 85)
The use of apprentices First, there is a mode of knowledge conversion that enables
and mentors to transfer us to convert tacit knowledge through interaction between
knowledge individuals. One important point to note here is that an
individual can acquire tacit knowledge without language.
Apprentices work with their mentors and learn
craftsmanship not through language but by observation,
imitation, and practice. (Nonaka, 1994, p. 19)
Brainstorming retreats or The first example of socialization comes from Honda, which
camps set up brainstorming camps (tama dashi kai)informal
meetings for detailed discussions to solve difficult
problems in development projects. (Nonaka and Takeuchi,
1995, p. 63)
Employee rotation In practice, socialization involves capturing knowledge
across areas through physical proximity. Capturing tacit knowledge by
walking around inside the company is another process of
acquiring knowledge. (Nonaka and Konno, 1998,
p. 43)
Items Measuring Internalization
On-the-job training The internalization of newly created knowledge is the
conversion of explicit knowledge into the organizations
tacit knowledge. . . . Rather than teaching based on
analysis, learning by continuous self-refinement through
OJT [on-the-job training] or peripheral and active
participations is stressed. (Nonaka and Konno, 1998,
p. 47)
Learning by doing The internalization of newly created knowledge is the
conversion of explicit knowledge into the organizations
tacit knowledge. . . . Learning-by-doing, training, and
exercises allow the individual to access the knowledge
realm of the group and the entire organization. (Nonaka
and Konno, 1998, p. 45)
Learning by observation Exercising ba supports the internalization phase. Exercising
ba facilitates the conversion of explicit knowledge to tacit
knowledge. . . . consists primarily of continued exercises
that stress certain patterns and working out of such
patterns. (Nonaka and Konno, 1998, p. 47)
Rajiv Sabherwal is the Emery C. Turner Professor of Information Systems at the

University of Missouri, St. Louis. He earlier taught at Florida International Uni-
versity (19881999) and Florida State University (19992000). He earned his PhD
from the University of Pittsburgh, a postgraduate diploma in management from
the Indian Institute of Management, Calcutta, and a BS in engineering (electron-
ics) from Regional Engineering College, Bhopal. Prior to his PhD, he worked as
a systems analyst at a large multinational company. Dr. Sabherwals research fo-
cuses on knowledge management, strategic management of information systems,
and social aspects of systems development. He is the departmental editor for in-
formation systems for IEEE Transactions on Engineering Management, associate
editor for Information Systems Research, and a member of the editorial board
for Journal of AIS. He recently completed his term as an associate editor at MIS
Quarterly. He is a frequent speaker at academic institutions and conferences, and
has a number of publications in leading journals, including Decision Sciences,
Information Systems Research, MIS Quarterly, Organization Science, Commu-
nications of the ACM, European Journal of Information Systems, and Journal
of MIS.
Irma Becerra-Fernandez teaches in the College of Business Administration at

Florida International University. Her research focuses on knowledge management,
knowledge management systems, artificial intelligence, and enterprise applica-
tion integration. She has studied and advised organizations, in particular NASA,
about knowledge management practices. She founded the KM Lab in 1997, and
has obtained over $2 million in funding from Kennedy Space Center, Ames Re-
search Center, Goddard Space Flight Center, and the Air Force Research Lab to
develop innovative expertise locator systems, collaborative computing environ-
ments, knowledge capture systems, and web-based expert systems. She frequently
delivers presentations with academic and practitioner focus at NASA centers, the
NAVY Research Lab, and international conferences. She has published exten-
sively in leading journals, including Journal of MIS, Communications of the ACM,
Knowledge Based Systems, Journal of Technology Transfer, and Knowledge Man-
agement Review. She earned her PhD, Masters, and Bachelors degrees in electrical
engineering.

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Sab Her Wal 2003

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Decision Sciences

An Empirical Study of the Effect of

Subject Areas: Knowledge Acquisition, Knowledge Management, Manage-

Organizational learning is not simply the cumulative result of each members

organizational knowledge creation. Nonaka and Takeuchi (1995) examine knowl-

Levels of Knowledge Management

The impact of KM at the organizational level has been clearly highlighted in

H1: Perceived individual-level KM effectiveness facilitates perceived

Knowledge Management Processes and Tools

H7: Socialization facilitates perceived group-level KM effectiveness.

Combination processes involve the conversion of explicit knowledge into

H8: Combination facilitates perceived group-level KM effectiveness.

Summary of the Research Model

Figure 1: The theoretical model.

ANALYSIS AND RESULTS

Table 1: Measurement of perceived knowledge management effectiveness.

Table 2: Measurement of knowledge management processes.

Cronbach Alpha 0.80 0.79 0.77 0.66 0.81 0.83 0.85

Intercorrelations and Descriptive Statistics

variables. For internalization, 2 of the 28 comparisons were significant. Thus, for

Figure 2: The structural model.a,b

Combination 0.19* Organization-Level

Although the control variables had above-significant effects, the regression

KM Effectiveness Externalization 0.26 (0.133) group 3c (0.18 );

concerned the relationship between externalization and perceived group-level KM

Socialization plays an important role in KM at the group level, but as expected,

However, the interviewees also suggested that socialization should be sup-

Implications for Practice

Directions for Future Research

Argyris, C., & Schon, D. (1978). Organizational learning: A theory of action

Conner, K. R., & Prahalad, C. K. (1996). A resource-based theory of the firm:

Hult, G. T. M. (1998). Managing the international strategic sourcing process as

APPENDIX A: Background Information on the KSC Groups

APPENDIX A: (continued) Background Information on the KSC Groups

APPENDIX A: (continued) Background Information on the KSC Groups

APPENDIX B: MEASURES OF KM PROCESSES

Quotes Illustrating Basis for Items Measuring KM Processes

(continued) Quotes Illustrating Basis for Items Measuring KM Processes

Rajiv Sabherwal is the Emery C. Turner Professor of Information Systems at the

Irma Becerra-Fernandez teaches in the College of Business Administration at

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