Knowledge Sharing and its Importance in Banking Industry

Knowledge Sharing and its Importance in Banking Industry

Knowledge is the ultimate source to drive any nation on a path of glorious success, similarly organizations adopt strict education plans to boost their sales and services so it gains too much importance now. Different training programs not only increase the confidence level of employees but also cause immediate impact on annual growth of that company too. Since knowledge sharing is purely internal decision making process among employees so willingness of individuals play a key role here to enhance personal and organizational grooming. Term “Knowledge management” has been defined for this purpose which means “any process that includes knowledge sharing to create, use and share knowledge in effective and fascinating way that may help to achieve organizational short and long term goals. A deep analysis of this intangible asset will help you to understand why it is so important to nurture your staff? Otherwise it is also a term if not efficiently used with in organization and would not turn to move your frozen goals into a refined form.

Knowledge Sharing and its Importance in Banking Industry
Knowledge Sharing and its Importance in Banking Industry

For last couple of decays it has gained so much importance that now “knowledge management” is called a competitive advantage for any organization if compared to it’s rivalry company.Cabrera & Cabrera (2002) defined it more precisely that when knowledge is shared, its value can be auxiliary. Knowledge sharing improves personal confidence and also creates lot of new ways to get feedback from direct customers. We have seen number of cases where companies adopted the same and now they are known as market leaders.

As per market analysis, experts believe that this intangible asset holds much more importance than what it delivers today? Impact of this assets is slow but everlasting and results are simply mind blowing when time pass you by. Knowledge sharing within organizations is often limited explained by organizational learning and psychology research (Szulanski 2000, 1994; Nonaka and Takeuchi 1995; von Hippel 1994).

Most of the service related organizations have planted variable training halls to polish their employees by providing attitude training, knowledge enhancement and customer dealing. These topics are mostly taught by top level managers who also share their real-time life experiences.It empowers banks to apply the same terminology by motivating their employees as banks are directly connected with customer dealings so importance level for knowledge sharing much higher than any other service related organization. With a wide range of extensive services banks need lot of motivational programs, quality knowledge sharing, audit issues and tact to improve organizational behavior other wise their services would be compromised and other bank will take a high lead.

To justify the same, we examined HBL, UBL, MCB, Bank Alfalah, Meezan and ABL. One decay ago, MCB and HBL were the top leaders in Banking Industry of Pakistan. As a market leader their potential and high class knowledge sharing ability also dominated them to remain at top. Slowly UBL captured the most of customers by allowing free services, impressive organizational environment, eye catching building and well trained staff which  also helped them to snatch first position thus they did it and UBL was on first position last year 2016 (profit wise). Main difference was knowledge sharing and paperless banking where others remained stiff to stick with paper banking. We all know that in large organizations organizational effectiveness can be gained among employees by the use of knowledge sharing; it can also enhance the effectiveness, efficiency, and integrity among employees of the Bank. With a wide range of business activities and customer banking is a complex business (Al-Ain and Al-Ain, 2009). To satisfy its customers’ needs it requires rigorous use of knowledge resources to competitively operate in the market. Furthermore, in Banking organizational setting, benefits can occur at two levels; individual and organizational (Cong & Pandya, 2003). In Banks knowledge management give opportunities to employees to enhance skills and experience by working together with their colleagues and sharing other people’s knowledge and learn from one another, in that way improving personal performance, which facilitate employees in learning the work in which they facing ambiguity and also support for better career advancement at the individual level. Newly hired fresh employees and experienced employees are the assets for the organization. In banking organization employees learn the work when their co-worker shares their work experience and knowledge with them. Banking sector organizations mostly provide two days on the job training which is insufficient for employees to perform their job according to their job description. Bank is a financial institution in which trial biases work is not allowed otherwise organization and employee suffer from financial loss, Knowledge sharing boost the skills of fresh employees by share the knowledge of experienced employees that is the reason knowledge sharing is important in banks. At the organizational level knowledge sharing provides two major benefits for an organization, first improving the organization’s performance through increased efficiency, productivity, quality and innovation. By treating people’s knowledge as an asset Increase the financial value of the organization. Product innovation and revenue boost can be alone accelerated with knowledge sharing. Knowledge sharing provides effective decision support. The bankers need to share their knowledge and expertise about organization specific trends as well as software, and regulatory issues that may impact the conduct and outcome of the bank. The banking organization enhances the skills, knowledge, and best practices of their professional staff, to capture knowledge for reuse, and increase effectiveness, and efficiency in their services.

It has been said by Nonaka and Takeuchi (1995) that knowledge sharing is extremely important for any organization or firm to improve it’s performance. So it is important for a firm to fully develop such environement to carry on such system which may enhance employee’s confidence and knowledge power.Knowledge management helps organizations to create, use, and share knowledge in an effective and efficient manner within an organization (Roth, 2016) Nonaka and Konno (1998) first emphasize the use of knowledge management as a tool for improving and simplifying knowledge sharing process (Bari, Fanchen, & Baloch, 2016). There is a reason to stick with this kind of strategy especially in Pakistan because most of the industries are directly related to service industry capturing almost 54 percent of total GDP.

We all know that culture is all about values, actions of people and beliefs so it also impact a lot when it comes to any organization which is known as Organizational Culture where collective behavior of humans play a vital role for the betterment of organization. Organization values, visions, norms, working language, systems, and symbols; including beliefs and habits makes the organization values. New members learn typical ways of behavior not only with employees but also with clients and stakeholders as this type of methodology may bring a vital change with in organization. When organizations easily welcome knowledge sharing, it brings change, expansion and application of ideas, approaches and communication that may later become distinctive edge of that particular organization.  We all know that Hofstede in 2005, reviewed the culture as the software of mind. Managers thus holds a primary responsibility to apply such parameters to overcome unwilling situations and unusual financial turmoils. If organization believes in strong culture, which actually delivers a high performance, she can multiply it’s sales volume and profit. Adaptation of such rules may bring lot of new changes, may create new dimensions and bring back organization’s consistency on track. It is the reason why banks follow this kind of strategy to get maximum output from same staff. Numerous cases have been shattering the market through their dynamic changes in vision which of course, was a new step to move forward.

Organization culture is the key one to promote knowledge sharing among staff of the banks as banking industry is the leading service industry so it impacts a lot when it comes to check services for same product but with different magnitude. It directly imitates company’s vision and also enhance the performance which ultimately leads such organizations towards path of glorious success. Banks are performing on same ground among with some common economical trends but their contribution towards economy and society play more important role to make a progressive economy.

As per Lee (2009), experience and knowledge of bank staff  are counted as bank’s asset. Now it’s the utmost competitive advantage for any Bank to rule in same industry thus banks with effective marketing strategy, nourished plans and proper knowledge leads in market, they possess highest market share in terms of assets, they holds more customers and also build a new world of unmatchable growth. A continuous training programs may leads such organization to get positive results of all times with consistent performance. It is also the integral part of the banks mission and objective today. Culture importance and well recognized in knowledge management (e.g. 1977: De Long, Gold, 2001; Malhotra, & Segars, 2003: Kayworth & Leidner,). In other way culture is the main obstacle in knowledge sharing and development process (e.g. See De Long, Fahey, 2000; McDermott & O’Dell, 2001). Culture of the organizations categorized by definite substances, basis on molds, standards and ethics, rules, etc. (e.g. 1982; Deal & Kennedy, Hofstede, 1991 (2000;Govindarajan & Gupta,Gummer, 1998) the kinds of people well-defined who will drag company’s vision and move forward the organizational goals. Impact of knowledge sharing so viral that managers discuss their daily plans with higher level management where high level managers tack down the daily change in progress, environmental obstacles and causes of fluctuations (in rare cases), which ultimately put a forward image to think tank about upcoming changes. Organization culture has solid influence on many functions, it is the driving force to implant progress, enhance safety and also provides uniqueness to it’s vision. It also provides parameters to neutralize ambiguity and distress while absorbing external adaptation and internal integration to secure vision, mission and primary goals of the organization. Business entrancement holds more importance in critical culture especially in Pakistan. There is a cluster of unforeseen obstacles regardless of company’s own factors which influence a lot. In such situations, developing knowledge sharing programs may be handy to reduce the repulsion of after effects of primary constraints. Such programs concludes the awareness about high performing organizations and their strategies to tackle this issues, local environment, behavioral delegation and existing business environment. Stakeholders play a tricky role here to establish a new world for such organizations they fully pay attention to such organization which are directly associated with knowledge sharing and all other related associations.Stakeholders need to ensure that the culture of the organization is well understood, particularly in every organization, which is often problematic (Adlan and Have 2012; Al-Adaileh and Al-Atawi 2011; Eid and Nuhu 2011).

So it is important to understand about the basics and investigation adds to spread knowledge management.  We all know that its antecedent mediate the relationship between knowledge sharing and culture is directly linked with each other. Prior studies on knowledge sharing have tended to look at predictors such as leadership (Yang, 2007), culture (Yang, 2007), interaction (Connelly and Kelloway, 2003), and trust (Renzl, 2008), mediates the relationship between culture and knowledge sharing. So it creates a hypothetical era to propose these social capital role as medication that is also explained in cognative, structural and relational in the relationship between culture and knowledge sharing. As per Govindarajan and Gupta 2000, even expressed by Gumer 1998, that culture is key one in banks to achieve effective knowledge sharing process.

Today organizations are paying more attention towards knowledge sharing but behavioral attitude of staff getting much attraction besides knowledge sharing. Staff of different banks are typically checked through anonymous members which conclude the monthly Quality Indicators and service management. Quality control is the different segment in each bank today, they provide statistics to higher management on which bases banks are ranked. It also check number of cases enrolled by customers which is also checked by State Bank of Pakistan, thus all these parameters conclude one thing whether organization is controlling behavioral restraints or not. Training of all staffs is necessary to check this kind of services, now time management is another issue where single bank check the whole process of single transaction randomly per day. Lulu in 2014 defined organization psychological contracts that these are the beliefs of individuals exploit on the knowledge resources of their employees. There unfulfilled promise from employees show the violation of such psychological contract which ultimately effect on organizational aim and knowledge sharing. Such things happen because timing of banks is hectic where knowledge sharing becomes too difficult that employees are unable to share their knowledge due to stressed environment and work load. So psychological contact play a handy role here to over come the unfulfilled promise of knowledge sharing therefore value of psychological contract becomes higher as it extends the relationship between employers and employees.

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