By J.K. Bagorogoza, A.A. de Waal, H.J. van den Herik and B.A. van de Walle

Purpose: The purpose of the study is to examine the knowledge management practices of financial institutions in Uganda, in order to understand how these practices influence the high performance organisation factors and thereby the performance of the financial institutions.

Design/methodology/approach: The study includes a review of the literature concerning dominant views on knowledge management and high performance organisations. Moreover, the characteristics of the financial industry are discussed. Then, twenty-three firms from the financial services industry in Uganda have been selected as the sample-base for an empirical test.

Findings: Obviously, knowledge management is highly inter-connected to the high performance framework. In this paper, we investigate (1) three processes of Knowledge Management (knowledge acquisition, knowledge dissemination, responsiveness to knowledge) and (2) how they relate to the high performance organisation framework. The three Knowledge Management processes, when executed well, result in a higher organisational performance.

Research limitations: The existing theories and our research on knowledge management are in some sense limited in explaining the extent to which knowledge management is related to high performance organisations. The reasons are: infrastructure, research time, and willingness to cooperate.

Practical implications: The paper may serve as a basis for financial institutions in Uganda (1) to adopt the high performance organisation framework and (2) to establish insights into how to improve the knowledge management practices. As such, the HPO framework might be the organisational model that managers are looking for to achieve economic, environmental, and social sustainability.

Originality/value: Past research into HPOs in developed countries may not be applicable to the unique nature and environment of organisations in a developing country. The paper tries to bring forward concern in the area of knowledge management practices and high performance organisation in the Ugandan finance sector.

Keywords: Knowledge Management, high performance organisation framework, financial institutions, Uganda.

1. INTRODUCTION: Improving organisational performance through knowledge management

The service sector in developing countries is facing tough competition in the era of privatisation, liberalisation, and globalisation. Financial organisations are trying to find ways to survive and compete their peers as best as possible (World Bank, 2009; Pillania, 2008). Uganda’s financial institutions have not been an exception. Many of them have gone through considerable changes such as privatisation, mergers, acquisitions, and closures (Mugume, 2008; Beck and Hesse, 2007; Ntayi, 2005). Techniques which have been suggested as a means for improvement to organisations are Knowledge Management (KM) and the high performance organisations (HPOs) framework (Pillania, 2008; Waal, 2007a). However, in spite of the wide research on Knowledge Management, only a few studies have attempted to investigate and explain how Knowledge Management processes and practices actually enhance business performance (Darroch, 2005; Kalling, 2003; Kridan, and Goulding, 2006; Marques and Simon, 2006; Sigala, and Chalkiti, 2007; Vorakulpipat and Rezgui, 2008). Most prior studies have investigated Knowledge Management as a one-dimensional construct. A common approach is to investigate the effect of Knowledge Management at an organisational level. In addition, there is scarcity of scientific discussion on the adoption of the HPO framework in developing countries, because most of the HPO studies conducted are focussing on the USA and Europe, where the context and the business environment is different from that in Africa (Stadler, 2007). Also, most of the studies on HPO are by consultancy firms (Newbold-Coco, 2006; Allen, 2009; Accenture; 2009; Danenberg, 2010). Thus, their data may not have been collected in a systematic way, making it difficult to generalise the findings. So, as a consequence, the research results may be less relevant to management practice in developing countries (Srnka and Koeszegi, 2007; Webber, 2006; Palrecha, 2009).` Moreover, there is a lack of literature which address Knowledge Management in addition to the HPO Framework. In this paper we investigate and explain the role that Knowledge Management has or can have in HPO.

We consider the multiple dimensions of Knowledge Management in order to obtain a more comprehensive understanding of its antecedents and consequences in relation to the HPO Framework. The study proposes KM as the independent variable with processes that involve human affairs as the major factors of Knowledge Management practices. In this respect, human affairs consist of knowledge creation, acquisition, interpretation, storage, and dissemination.

Improving organisational performance through knowledge management – The case of financial institutions in Uganda