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THE INTER-RELATIONSHIPS BETWEEN ENTREPRENEURIAL CULTURE,
KNOWLEDGE MANAGEMENT AND COMPETITIVE ADVANTAGE
IN A TRANSITIONAL ECONOMY1
Que Thi Nguyet Nguyen
Graduate College of Management
Southern Cross University, Australia
Email: [email protected]
Dr. Philip A. Neck
Graduate College of Management
Southern Cross University, Australia
Email: [email protected]
Thanh Hai Nguyen
Department of Management
Monash University, Australia
Email: [email protected]
1. Background to the Research
The critical role of entrepreneurial culture in providing firms with a competitive advantage (CA)
has been broadly discussed in the literature. This factor has also been identified as the key
enabler in successfully managing firm-specific knowledge-based resources (Barney 1986;
Davenport, DeLong & Beers 1998; Gold, Malhotra & Segars 2001). In today’s dynamic business
environment with rapid and unpredictable changes, these knowledge management (KM)
activities have, in turn, emerged as dynamic capabilities contributing to organisational CA
(Nielsen 2006).
Given the growing interest in these issues, a review of the literature shows that there is a lack of
research in simultaneously investigating the inter-relationships between entrepreneurial culture,
KM processes, and firm competitiveness. In addition, work to date has mainly explored these
1 This paper was presented to the 17th Biennial Conference of the Asian Studies Association of Australia in Melbourne 1-3 July 2008. It has been peer reviewed via a double blind referee process and appears on the Conference Proceedings Website by the permission of the author who retains copyright. This paper may be downloaded for fair use under the Copyright Act (1954), its later amendments and other relevant legislation.
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factors in the context of Western advanced, developed or Asian newly industrialised countries.
The question is that in the context of Vietnam, an emerging Asian less developed country,
dominated by a Confucian - Socialist market economy with a long exposure to Western values,
where or not these complex attributes of culture contribute to the success of KM efforts and firm
competitiveness. The study aims to answer this main research question.
The paper commences with a review of the literature leading to a set of research hypotheses for
empirical testing. This is followed by a discussion of methodological issues, including
measurement of variables, data collection procedure, and data analysis techniques. The paper
then continues to present the results of data collected from 362 Vietnamese managers using
structural equation modeling (SEM) analyses. Finally, the paper concludes by a further
discussion on the complexity of Vietnamese culture and research implications, followed by
stating the limitations of this study and suggesting future research.
2. Literature Review
This section briefly reviews the relevant literature to develop a set of research hypotheses that
explain the inter-relationships between entrepreneurial culture, KM process capabilities, and
organisational CA.
2.1 Organisational Culture and Competitive Advantage
The role of organisational culture as a source of sustained CA has been strongly stated in the
literature. Barney (1986, p.646) concludes that ‘firms that do not have the required cultures
cannot engage in activities that will modify their culture and generate sustained superior
performance because their modified culture typically will be neither rare nor imperfectly
imitable’. Moreover, he adds that organisations which have a culture that supports and
encourages cooperative innovation should try to understand what it is about their culture that
gives them a CA and develop and nurture those cultural attributes (Barney 1986).
Similarly, Hibbard (1998) argues that strong culture is a determinant of organisational
performance. In fact, most of the successful companies (those with sustained profitability and the
above-normal financial returns) such as Coca-Cola, Disney, General Electric, Microsoft, and
Toyota, have a major distinguishing nature, their organisational culture, that is their most
important CA (Cameron & Quinn 1999).
According to Gold, Malhotra and Segars (2001), organisational culture typically evolves over
long period of time through the accumulation of organisational operations. Therefore, this
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valuable resource becomes hard to acquire and complex to imitate. In accordance with the
resource-based view (RBV) of the firm, organisational culture should provide a sustained CA
(Chuang 2004). An empirical evidence in the context of Vietnamese construction industry also
shows that entrepreneurial culture has the unique significant contribution to a firm’s CA
(Nguyen et al., 2008). This relationship is, therefore, illustrated by:
Hypothesis 1: Organisational culture has a positive impact on a firm’s CA.
2.2 KM Process Capabilities and Competitive Advantage
The contribution of KM processes in gaining and sustaining CA has been broadly discussed in
the literature of KM and CA. Chakravarty et al. (2005, p. 305) posit that while ‘the
characteristics of knowledge are primarily valuable defending existing advantages, the processes
it uses to accumulate and leverage knowledge have greater implications for creating new sources
of advantage’. Each of the three KM activities plays a distinctive role in providing a firm its CA:
knowledge leverage is necessary for growth; knowledge accumulation to ensure that this growth
is profitable; and knowledge protection to sustain this profitable growth (Chakravarthy et al.
2005).
From the dynamic capability based approach, Nielsen (2006) also illustrates a link between
dynamic capabilities and KM stating that dynamic capabilities are seen as integrated sets of KM
activities including the creation, acquisition, capture, assembly, sharing, integration, leverage,
and exploitation of knowledge. A combination of these well-known processes into three
important types of dynamic capabilities relates to the development, (re)combination, and use of
the firm’s stock of knowledge-based resources. Therefore, KM processes as dynamic capabilities
allow firms to create new products, adapt to rapidly changing external conditions and remain
competitive in the current dynamic market place (Eisenhardt & Martin 2000; Hamel & Prahalad
1996; Lopez 2005; Nielsen 2006; Powell, W. W. & Snellman 2004; Verona & Ravasi 2003;
Winter 2003). As such, we hypothesise that:
Hypothesis 2: KM process capabilities have a positive impact on a firm’s CA.
2.3 Organisational Culture and KM Process Capabilities
In relations with the concept of KM, DeLong and Fahey (2000) identify four comprehensive
ways in which culture influences the behaviours central to knowledge creation, sharing, and use.
First, culture shapes assumptions about what knowledge is and which knowledge is worth
managing. Second, culture defines relationships between individual and organisational
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knowledge, determining who is expected to control specific knowledge, as well as who must
share it and who can board it. Third, culture creates the context for social interaction that
determines how knowledge will be used in particular situations. Finally, culture shapes the
processes by which new knowledge with its accompanying uncertainties is created, legitimated,
and distributed in organisations.
Turban and Aronson (2001, p.355) also conclude that ‘the ability of an organisation to learn,
develop memory, and share knowledge is dependent on culture’. Organisations should establish
an appropriate culture that encourages people to create and share knowledge within an
organisation (Holsapple & Joshi 2001; Leonard-Barton 1995). To stimulate the development and
application of knowledge, the key elements of a knowledge culture are required, that is a climate
of trust, confidence, and openness in an environment where constant learning and
experimentation are highly valued, appreciated and supported (Martin 2000; Moffett, McAdam
& Parkinson 2003). Cultures that explicitly favour knowledge sharing and knowledge integrating
into the organisation encourage debate and dialogue in facilitating contributions from individuals
at multiple levels of the organisation (Davenport & Prusak 1998).
Obviously, organisational culture becomes one of the most important factors for the successful
implementation of KM efforts (Davenport & Prusak 1998; Gold, Malhotra & Segars 2001; Lee
& Choi 2003; Martin 2000; Roman-Velazquez 2004). Given the critical role of cultural factor in
supporting KM processes, the study hypothesises that:
Hypothesis 3: Organisational culture has a positive impact on KM process capabilities.
3. Research Methodology
This section deals respectively with developing measures of theoretical constructs and outlining
techniques applied for data collection and data analysis in the study.
3.1 Measurement of Variables
All measurement items of variables are based on existing instrument derived from the relevant
literature using a seven point Likert scale ranging from (1) ‘strongly disagree’ to (7) ‘strongly
agree’. The variable of organisational culture is adapted from Smith’s (2006) study while the
measure of CA is based on the work of Chuang (2004). KM process capabilities, a second-order
latent construct, are adapted from Smith (2006) study, composed of four dimensions, namely
knowledge acquisition, conversion, application, and protection processes. The operational
definitions of these six first-order latent variables are provided in Table 1.
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Table 1: Operational Definitions of Variables
Variables Operational Definitions Cultural Infrastructure (CI)
The shared values, beliefs, and practices of the people in the organisation (McDermott & O'Dell 2001).
Acquisition Process (ACP)
The ability to seek and obtain entirely new knowledge or create new knowledge out of existing knowledge through collaboration (Inkpen 1996)
Conversion Process (CP)
The ability to make existing knowledge useful (Gold, Malhotra & Segars 2001).
Application Process (APP)
The ability to apply, exploit and use knowledge (Gold, Malhotra & Segars 2001).
Protection Process (PP)
The ability to secure knowledge from inappropriate or illegal use or theft (Gold, Malhotra & Segars 2001).
Competitive Advantage (CA)
The objective of organisational strategies (Porter 1985) which is measured in many dimensions such as innovativeness, market position, mass customisation, and difficulty in duplication (Byrd & Turner 2001).
Source: Developed by this study
3.2 Data Collection Procedure
A pilot survey was conducted at a national exhibition of construction firms in Vietnam to
preliminarily evaluate the existing scale and modify it to the new context. Questionnaires were
directly distributed to 600 senior managers on site and 148 responses were returned with
complete data. Reliability analysis using Cronbach’s alpha and exploratory factor analysis were
employed to refine the draft questionnaire (Hair et al. 2006). The final instrument (as presented
in Table 2) was distributed by mail to 1000 senior managers randomly selected from the 2000
Business Directory issued by the Vietnamese Chamber of Commerce and Industry, followed up
by phone and two reminders by mail to increase the response rate.
3.3 Data Analysis Techniques
The data collected from the main survey was first assessed for missing values, sample
characteristics and normality identification. A two-step approach to structural equation modeling
(SEM) using AMOS version 6.0 was then applied. Step one was to conduct a confirmatory factor
analysis (CFA) to assess the proposed measurement model fit and construct validity while step
two aimed to develop and estimate the structural model for testing the significance of theoretical
relationships (Hair et al. 2006).
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4. Data Analysis Results
This section covers the descriptive statistical analyses of the sample followed by an assessment
of the overall measurement model and structural model to test the identified research hypotheses.
4.1 Sample Characteristics
After applying pairwise deletion method of missing cases, the final sample included 362 usable
responses, producing an acceptable response rate of 36.2% and satisfying the minimum ratio of
5:1 between the number of cases and parameters in the study (Hair et al. 2006; Kline 1998).
The respondents’ company profile was analysed on their size, type of business, and basic
categories of industry. Most surveyed organisations were SMEs employing less than 300
employees (above 80%) and operated in the service industry (nearly 70%). While the majority of
the state-owned enterprises were of larger size and operated in manufacturing sector, the service
industry employed more smaller-sized private limited and joint-stock companies.
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Table 2: Final Instrument of Construct Measurement Scales
Construct Measurement Scale In my organisation, …
Organisational Culture (OC)
OC1: Employees understand the importance of knowledge to corporate success OC2: High levels of participation are expected in capturing and transferring knowledge OC3: On-the-job training and learning are valued OC4: Senior management clearly supports the role of knowledge in our firm’s success My organisation …
Acquisition Process (ACP)
ACP1: Has processes for acquiring knowledge about our customers ACP2: Has processes for generating new knowledge from existing knowledge ACP3: Has processes for acquiring knowledge about our suppliers ACP4: Has processes for distributing knowledge throughout the organisation ACP5: Has processes for acquiring knowledge about new products/services within our industry ACP6: Has processes for exchanging knowledge between individuals My organisation …
Conversion Process (CP)
CP1: Has processes for filtering knowledge CP2: Has processes for transferring organisational knowledge to individuals CP3: Has processes for absorbing knowledge from individuals into the organisation CP4: Has processes for integrating different sources and types of knowledge CP5: Has processes for organising (store/file) knowledge CP6: Has processes for replacing outdated knowledge My organisation …
Application Process (APP)
APP1: Has processes for using knowledge in development of new products/services APP2: Has processes for using knowledge to solve new problems APP3: Matches sources of knowledge to problems and challenges APP4: Uses knowledge to improve efficiency APP5: Uses knowledge to adjust strategic direction APP6: Is able to locate and apply knowledge to changing competitive conditions APP7: Takes advantage of new knowledge My organisation …
Protection Process (PP)
PP1: Has processes to protect knowledge from inappropriate use inside the organisation PP2: Has processes to protect knowledge from inappropriate use outside the organisation PP3: Has processes to protect knowledge from theft from within the organisation PP4: Has processes to protect knowledge from theft from outside the organisation PP5: Has extensive polices and procedures for protecting trade secrets PP6: Values and protects knowledge embedded in individuals PP7: Clearly communicates (create awareness of) the importance of protecting knowledge
Competitive Advantage (CA)
CA1: My organisation often uses knowledge-based innovation CA2: My organisation’s market position can strong barriers to entry for other firms CA3: My organisation uses knowledge management to widen the array (line/range) of products without increasing costs CA4: The knowledge management capability in my organisation would be difficult and expensive for rivals to duplicate
Source: Developed by this study
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4.2 Measurement Model Development
All values of skew and kurtosis of six interval variables in the study were found not to exceed
the absolute values of 2 for skewness and 7 for kurtosis indices and, therefore, the data set was
considered to have moderately normal distribution and the maximum likelihood estimation was
used (Hair et al., 2006; Kline, 1998).
The initial fit of the overall measurement model was not particularly good (χ2/df=3.16; p=0.001;
CFI=0.83; GFI=0.78; RMSEA=0.077). Standardised loading estimates (below |0.5|),
standardised residuals (above |4.0|), and modification indices (greater than 4) were employed to
suggest item deletion while content validity of constructs were still satisfied (Anderson and
Gerbing 1988; Hair et al. 2006). The fit of the re-specified measurement model improved
considerably to χ2/df=2.14, p=0.001 (a significant p-value can be expected with large sample
size), CFI=0.94; GFI=0.90; and RMSEA=0.056.
Table 3 shows that all standardised regression weights were substantial and significant (λ>0.50
at p=0.001) and the composite reliability for all individual constructs was acceptable (Pc>0.70).
In addition, the inter-construct correlation coefficients were found to be significantly different
from unity at the 0.001 level. The measurement model did not contain any cross-loadings either
among the measured variables or among the error terms. These results supported the
unidimensionality, convergent and discriminant validity of all constructs in the final
measurement model (Hair et al. 2006).
4.3 Structural Equation Modeling (SEM)
The results of SEM analyses are displayed in Figure 1 proving that the model satisfied an
acceptable level of model fit and, thus, was used to test the related hypotheses through the
standardised regression weights, t-values, and squared multiple correlations.
The standardised regression weights and t-values for the paths of KM process capabilities
(KMPC) -> CA and organisational culture (OC) -> KMPC indicate the significance of these
relationships, supporting hypotheses 2 and 3. Organisational culture is found to considerably
improve KM process capabilities and explain 60% of the variance of this construct (R2=0.60).
The dynamic capability view of KM is confirmed, stating that KM process capabilities,
measured by knowledge acquisition, conversion, application, and protection processes, strongly
contribute to organisational CA, among which application processes are the most important
dimension. This result also supports the knowledge-based theory of the firm, positing that the
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major source of competitiveness rests in the ability to exploit a firm’s integrated knowledge and
not in its ability to create new knowledge per se (Grant 1996).
The parameter estimate of OC -> CA path demonstrates this structural link insignificant
(p>0.05). As such, hypothesis 1 is rejected by the data, showing that culture alone does not
generate CA directly and significantly. However, this factor is found to indirectly contribute to
organisational CA with the standardised mediated effect of 0.61.
The structural model demonstrates good explanatory power for CA, the outcome variable, with
84% of its variance (R2=0.84) explained by two predictors, among which culture displays
insignificant effect, and hence, mainly accounted for by KM process capabilities. These findings
imply that organisational culture though has no direct impact on CA, its critical role is fully
mediated through KM process capabilities.
Figure 1: Parameter Estimates for Structural Model
CMIN=432.78; df=202; CFI=0.93; GFI=0.90; RMSEA=0.056
R2 = Squared Multiple Correlation H (λ=Standardised Regression Weights; t-value)
All p-values = 0.001 except * with p > 0.05 ------- Indirect effect, standardised mediated effect = 0.61
Measurement errors, residual terms, and item loadings are omitted for clarity
Source: Developed by this study
H1 (0.78; 9.05)
R2=0.84
H3 (0.79; 5.00)
0.80
0.90 0.82 0.73
R2=0.60
Acquisition Conversion Application Protection
KM Process Capabilities
Organisational Culture
Competitive Advantage
H2 (0.15; 1.62)*
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Tabl
e 3:
Sta
ndar
dise
d R
egre
ssio
n W
eigh
ts, t
-Val
ues,
Com
posi
te R
elia
bilit
y of
Con
stru
cts
Item
s A
cqui
sitio
n Pr
oces
s (P
c=0.
80)
Con
vers
ion
Proc
ess
(Pc=
0.80
) A
pplic
atio
n Pr
oces
s (P
c=0.
74)
Prot
ectio
n Pr
oces
s (P
c=0.
83)
Org
anis
atio
nal C
ultu
re
(Pc=
0.81
) C
ompe
titiv
e A
dvan
tage
(P
c=0.
78)
t-va
lue
(p=0
.001
) A
CP1
0.
76
13
.06
AC
P2
0.80
13.5
4 A
CP3
0.
67
11
.66
AC
P4
0.58
10.0
9 C
P1
0.
76
11.1
0 C
P2
0.
76
11.1
1 C
P3
0.
71
10.7
1 C
P4
0.
60
9.52
A
PP1
0.62
6.57
A
PP2
0.74
6.33
A
PP3
0.74
6.57
PP
1
0.88
13
.60
PP2
0.
71
12.0
6 PP
3
0.75
12
.60
OC
1
0.
77
16
.44
OC
2
07
6
15.8
9 O
C3
0.66
13.2
3 O
C4
0.66
13.1
6
CA
1
0.73
6.
84
CA
2
0.64
6.
61
CA
3
0.74
6.
86
CA
4
0.63
6.
59
Seco
nd-o
rder
Fac
tor
Loa
ding
s (K
M P
roce
ss C
apab
ilitie
s – K
MPC
)
Stan
dard
ised
Reg
ress
ion
Wei
ghts
(λ)
t-V
alue
s A
CP
Acq
uisi
tion
Proc
ess
0.73
8.
43
CP
Con
vers
ion
Proc
ess
0.82
8.
03
APP
A
pplic
atio
n Pr
oces
s 0.
90
5.58
PP
Pr
otec
tion
Proc
ess
0.80
8.
45
Com
posi
te R
elia
bilit
y is
def
ined
by
Forn
ell a
nd L
arck
er (1
981)
as:
Pc
= (Σλ i)
2 /((Σλ
i)2 + Σ
(1-λ
i2 )) wh
ere λ i
is fa
ctor
load
ing
of in
dica
tor n
umbe
r i.
Sou
rce:
Dev
elop
ed b
y th
is st
udy
11
The rejected result of hypotheses 1, on the one hand, suggests that when culture is investigated
in isolation (as in previous research), this factor may significantly contribute to a firm’s CA.
Such effect, however, becomes negligible once KM process capabilities are included in the
model and all theoretical hypotheses are examined simultaneously, therefore, changing the role
of culture to the key enabler of KM processes.
The unsupported result, on the other hand, can be justified based on the current dynamic and
turbulent landscape with constant and unpredictable changes, where the possibility of cultural
attributes being imitated by competitors and/or modified by engaging in global business
activities is increased (Porter 1985; Powell & Dent-Micallef 1997). This factor, once a source of
CA, has become competitive necessity due to its being no longer rare and imperfectly imitable
(Barney 1986).
Walters, Halliday, and Glaser (2002) further emphasise that in the new economy, the generation
of competitive positioning is a dynamic process and, thus, other organisational resources such as
culture should be utilised and leveraged to harness this dynamism. For example, organisations,
to remain competitive, must be able to utilise their knowledge of customers, products, services,
and resources, and be able to overcome cultural barriers to sharing knowledge (McDermott &
O'Dell 2001; Soley & Pandya 2003).
5. Further Discussion and Conclusions
This section provides further discussion on the specific characteristics of Vietnamese culture and
research implications, followed by stating the study’s limitations and suggesting future research.
5.1 Vietnamese Culture Characteristics
Gibb (1996) argues that most people who run SMEs do so as a ‘way of life’ which as a particular
culture. According to the author, organisational culture (values, attitudes and beliefs) is shaped
by a particular set of characteristics and firms need to recognise the nature of the environment in
which the entrepreneur seeks to cope on a day-to-day basis. Furthermore, as argued by Gibb,
entrepreneurial culture should be nurtured and developed. In transitional economies, there is
growing awareness of the scope for influencing societal culture, attitude to work, to business and
to entrepreneurship. The culture which supports small enterprise development has broadly been
described as sets of values, beliefs, attitudes and norms of behaviors which underpin a role
model of success in society via individual or collective entrepreneurial endeavor.
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Despite the fact that globalisation is important, there are different culture and customs (Dana
2007). With the same point of view, Gibb (1996) concludes that culture shapes managerial
assumptions. In addition, businesses have increasingly engaged in interaction with foreign
suppliers, employees, distributors, clients and government officials. Each operates in a particular
environment, where interactions involve implicit and explicit assumptions. According to this
view, it is a function of the complex belief systems, cultural values and attitudes that dictate
accepted norms of conduct (Dana 2007).
Dana (2007, p. 286) further emphasises that in Vietnam ‘the people of the North are of Sino-
Tibetan race that has strong Han influences from many years of Chinese domination; the people
of the South tend to have been exposed to slightly more Dionysian and fewer Promethean
values. While the people of the North adopt a northern sect of Buddhism, those of Cochin-China
include followers of a southern sect, with some Hindu influence’.
The invasion conducted by France in 1859 created a strong impact on Vietnamese culture.
Catholicism was heavily introduced to Vietnam during that period and became the second largest
religion in this country. Western values and Catholicism have somewhat influenced the lifestyle
of some groups of people, especially strongly affected the lifestyle and values of rich people. In
1954, French military force was defeated by Vietnamese in Dien Bien Phu and Vietnam was
then divided into two parts: North Vietnam became a socialist country which was strongly
influenced by China and Russia while South Vietnam became closer to America.
The war between Vietnam and America last until 1973 and the country was reunited in 1975
after the collapse of the Saigon puppet government. After the war, Vietnam experienced a hard
long period until 1986 when the country formally converted its centrally planned economy to the
socialist market economy with the ‘Doi Moi’ policy. The method employed by the Vietnamese
government at that time was ‘gradualism’ with step by step moving from a socialist economy to
a socialist market oriented economy. Surprisingly, like China, Vietnam has become one of the
two typical transitional economies with an impressive economic growth rate without significant
reduction in public sector’s role and noticeable shift in the political system. Private sector has
also become vital to the economy and has been encouraged to flourish by the government with
remarkable reduction in government’s intervention and control.
It should be noted that Vietnamese culture has been strongly influenced by Buddhist,
Confucians, and Taoists for thousand years (Le et al. 2007; Mcleod & Dieu 2001; Nguyen, Alam
& Prajogo 2008). These values and religions are the key referencing system in this country. As
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discussed above, Catholicism and Western values have also strongly affected Vietnamese values
and culture. As a result, the two largest religions currently exist in Vietnam include Buddhism
and Catholicism. There are also small Muslim community and other religions such as Cao Dai
and Hoa Hao. Apparently, Vietnamese culture is quite dynamic with key distinctive
characteristics. To many Vietnamese, Confucian culture is values and beliefs while Western
lifestyles and management approach are ideal. This is the most distinct feature of Vietnamese
business environment.
In face with the intensive competition from globalisation, Vietnamese entrepreneurs began to
recognise the critical role of marketing, sustainability and the need for improving knowledge and
competitiveness. Such complex attributes of culture and developmental history in Vietnam
should provide strong influences on the way organisations manage, capture, share and transfer
their knowlede. To take advantage of the hybrid features of culture, Vietnamese entrepreneurs
should incorporate Confucian philosophy, socialist market philosophy and carefully adapt new
managerial approaches and innovative ideas plus ‘belief reference system’.
In fact, Vietnamese entrepreneurs tend to pay more attention on traditional values, more static
and tradition focused mentality, personal steadiness and stability, protecting face, tradition
respect, and reciprocation of greetings, favors, and gifts (McDermott & O'Dell 2001). The
friendliness, openness and willingness to help each other would encourage the creation, sharing,
transfer, and use of knowledge within organistions.
In conclusion, there is a strong evidence that the cultural, economic, and political context in
Vietnam shapes entrepreneurial business activities and, therefore, should strongly influence an
organisation’s ability to be successful in managing knowledge and, thereby, achieving a CA.
Future research can look at specifc aspects of this culture to further investigate their impacts on
KM processes in Vietnam.
5.2 Research Findings and Implications
This study is based on a RBV of KM with an extension of the dynamic capability approach to
develop and empirically examine a theoretical model that explains the impact of organisational
culture as the key enabler on KM process capabilities and their contribution to a firm’s CA in
today’s dynamic market places. A survey of 362 senior executives in Vietnam randomly selected
from the 2000 Vietnamese Business Directory provides strong support for the theoretical model
14
within the specificities of an emerging Asian socialist market economy where a Confucian
culture and a majority of SMEs currently exist.
The results of SEM analyses confirm the strong support of organisational culture on KM process
capabilities. This construct, composed of four dimensions, namely knowledge acquisition,
conversion, application, and protection processes, significantly contributes to a firm’s CA,
among which application processes are the most important dimension. The findings also imply
that once KM process capabilities are added into the model as the key contributor to
organisational CA, entrepreneurial culture becomes the critical enabler of KM process
capabilities and indirectly contributes to firm competitiveness through these processes.
In terms of practical implications, this paper attempts to provide Vietnamese business executives
with a better understanding of the inter-relationships between organisational culture, KM process
capabilities and their relative importance to leverage, exploit and sustain a CA. In particular,
practising managers should utilise, develop, and nurture the specific attributes of culture to
strongly support KM processes, especially the storage, retrieval, application, and sharing of
knowledge, thereby, achieving firm competitiveness.
The study also provides a discussion on the complexity of Vietnamese culture as being affected
by both Chinese Confucian philosophy and Western values which should strongly influence on
the development of KM and CA. In the current business environment of Vietnam, particular
aspects of culture need to be emphasised, that is, a supportive culture should value the role of
knowledge in corporate success, appreciate on-the-job training and learning, and encourage
people to create and share knowledge within the organisation.
5.3 Limitations and Future Research
The study’s limitations suggest that fit statistics under re-specification of the CFA model on
shortened scale require cross-validation studies to retest the model and examine its
generalisability, in both similar and other settings of culture. Future studies from both
quantitative and qualitative approaches are also needed to answer more questions in detail such
as what specific aspects of culture currently exist in Vietnamese SMEs and how they relate to
KM practices? And how might these issues differ for different firms in different industries?
In a broader view, other KM enablers such as information technology, organisational structure,
leadership, strategy, and human skills could be taken into consideration to provide a more
15
comprehensive picture of the inter-relationships among these factors, their relative importance
on KM process capabilities and contribution to organisational CA.
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