Knowledge Management Process, Firm’s Culture and Organisational Effectiveness of Financial Institutions in Somalia

Abstract

In a rapidly changing technological environment across the globe, remaining competitive within the global marketplace is a recurring theme. As a consequence, organisations are continuously purposing to maintain competitive advantage with recent research suggesting knowledge as a key determinant of this advantage alongside other factors. Financial institutions have been found to constitute knowledge-intensive organizations where performance is driven and sustained by information. This study therefore investigated the moderating effect of firm culture on the relationship between knowledge management process and firm the performance of financial institutions in Somalia. We found that knowledge management process (conversion, transfer and application) significantly influenced organisational effectiveness at 5% level of significance. The greatest effect was by knowledge transfer (t=5.665, p<.001), followed by knowledge application (t=3.672, p<.001), and lastly knowledge conversion (t=2.010, p<.046). Further, though organisational culture had a positive significant influence on organisational effectiveness (t=6.109, p<.001), it did not significantly moderate the relationship between knowledge management processes and organisational effectiveness at p <.05. The effect was only significant at 10% level of significance (t=1.813, p<.071 <.1). Based on these findings, it was concluded that knowledge management process, significantly influence organisational effectiveness. It was recommended that the management of financial institutions in Somalia should improve the knowledge management process while the policy makers should strengthen the policy and regulatory environment for the financial sector.