Abstract:
Knowledge is a complex asset that must be managed in a totally different way unlike
other resources. Most organizations in the developed and the developing world, are
opting for change in the management, through improving creation of new ideas and
developing a best environment for the creation of envisioned ideas. Hence the need
for the recognition of knowledge management practices in organizations. The purpose
of the study was to examine factors affecting knowledge management practices in
selected banks in the banking sector in Kenya. The study was conducted in four
commercial banks (Kenya Commercial Bank, Standard Chartered Bank, Cooperative
Bank and Equity Bank) located within Nairobi County. The study employed
descriptive survey research design to determine the extent to which knowledge
management practices have been adopted. One hundred and six (106) employees and
management of selected banks formed the target population of the study. Stratified
random sampling was used to make inferences of the intended population from the
targeted population. Data was obtained through administering questionnaires to
employees in the four commercial banks. Descriptive statistics and inferential
statistics were used to analyze the data. The research established that knowledge
management practices have a crucial influence on commercial banks. The results of
correlation analysis of (r= 0.91), which showed a strong positive relationship between
organization culture and knowledge management. Also the research findings also
showed that organizational culture affects individuals' response to different situations
and their interpretation of the organization surrounding environment. For example, the
result outcome showed that participants strongly agreed that team collaboration,
experimentation and autonomy affect knowledge management with means of 4.3143,
4.2860, and 4.5740 respectively. The study further suggests that flexible
organizational structures assist to achieve decentralization of decision-making process
by facilitating the communication process at all organization levels. This is supported
by the effect in which organizational culture has on individuals’ response to different
situations. The study also established that the internal structure and relationships
prevailing in the organization have a significant effect on knowledge and that,
effective ICT infrastructure is crucial in facilitating knowledge management within an
organization. This is supported by the results obtained of multiple linear regression
model output, which showed a linear relationship between Knowledge management
practices and Information Technology. A unit increase in Information Technology led
to an increase of 0.140 in Knowledge Management practices. Consequently, it is
recommended that banking institutions need to include Knowledge Management
practices as part of their long term corporate strategy. They also need to employ
organizational cultures that enhance autonomy, trust and values which have a strong
impact on the communication.