Knowledge Management for Service Innovation: A Study of Sri Lankan Business Service Organizations

Abstract

The world is moving fast from a production-based economy towards a knowledge-based one. As a result, organizations are becoming more knowledge-intensive and are increasingly dependent on innovative knowledge to create value. Therefore, the question of how activities should be organized in order to generate and exploit new forms of knowledge is very important. The main objective of this research is to explore practice-based innovation (or how this is done) in service sector organizations. Building on qualitative data from five business service sectors, the analysis identified three work activities through which knowledge for innovation is generated, showed how they constitute a common ground for knowledge creation and redefined practice as a coherent frame for these activities. The three work activities are routine designing activities, participating in the whole flow of designing, using and reflecting in action. Further, the study explains how conventional organizing destroys this knowledge. In addition to the main findings, this research identified the key factors that influence knowledge management and innovation in Sri Lankan service sector organizations. Of clear importance are strong internal linkages, open and less hierarchical structural elements, an open and positive organizational culture, strong knowledge dissemination, the availability of an expert and skilled work force, carrying out internal R&D, technological exploration, internal systems and processes. The study makes both an empirical contribution to the emerging work on service innovation on the basis of knowledge intensiveness, and by extending a theory grounded in the existence and role of practice-based knowledge.