Communities of practice, knowledge creation, and corporate sustainability : a study of Bahrain service industry

Abstract

The Kingdom of Bahrain is a service-based economy in which the service industry is a highly competitive market environment. Therefore, organisations require employing strategies to compete and sustain their competitive advantage in order to survive. The knowledge-based view of the firm argues that knowledge is a critical source for sustainable competitive advantage. Communities of Practice (CoPs) provide a suitable environment for knowledge exchange and creation. This study defined CoPs as emergent informal networks of people who are located inside and outside the organisation, through which members of these communities share or are interested in the same practice and knowledge. It is noticed from the literature that there is no empirical study investigating the impact of knowledge created in CoPs on corporate sustainability. Moreover, the influence of social capital on quantity and type of knowledge received from different CoPs members is scarce. This research attempts to address this research gap.The study combined qualitative and quantitative approaches. The information obtained from the literature was used to develop the initial research model. In the first phase, a qualitative field study is carried out to develop a comprehensive research model. A number of hypotheses were then developed. The second phase of the study pilot tested the developed questionnaire. Minor changes were made based on the pilot study participants’ comments and feedback.The third phase of the study is the main quantitative survey. The questionnaire for survey was distributed among senior managers in Bahrain top 100 service organisations both in the public and private sectors. 333 completed questionnaires were returned to the researcher with the response rate of 54%. Partial Least Squares (PLS) was employed to analyse the data collected in the main survey.The findings of the study did not support all the hypotheses developed in this study. It was found that communities of practise exist in Bahrain service industry, where two types of CoPs are noticed: intra (co-located employees and non co-located employees) and inter CoPs (customers, suppliers, and business partners). It was also found that co-located employees’ and customers’ CoPs have the major effect on organisation performance as the knowledge received from them is employed in the knowledge creation process to generate new knowledge in order to improve organisation performance.An interesting finding is the positive effect of CoP characteristics on the knowledge received. Therefore, CoP characteristics do not only identify this type of network but also influence the amount of knowledge received from community members. On the other hand, the knowledge received from CoPs affect the knowledge creation process in its four steps (interaction and communication, develop pool of knowledge, alternative experimentations, and solution to problem). Furthermore, the study empirically tested that knowledge creation process is carried out in four sequential steps. It was also found that the last step of the knowledge creation process "find solution to problem" has the greatest influence on the generation of new knowledge. It was also found that new knowledge positively affects organisational social, environmental, economic, and non economic performances (i.e. corporate sustainability). The study results did not support the hypothesis that social capital aspects (trust, norms, and identification) moderate the amount of knowledge received from CoPs.From the literature review and the study findings, it is recommended that organisations within Bahrain service industry should develop a knowledge management strategy and implement CoPs to sustain their position in the market. Moreover, the strategy should contain appropriate measures of sustainability objectives.Despite the fact that the study was conducted in Bahrain service organisations, it is suggested that it can be applied to different organisations in various countries across the globe because of its generic approach. However, it needs to be customised for local application.