Factors affecting the adoption and practice of knowledge management in the life insurance industry in Taiwan

Abstract

In the trend of globalization and coordination of banks, insurance and security companies, Taiwan life insurance industry has been facing tremendous competitive pressure. As a result of the shift from focusing on tangible resources to intangible resources, enterprises are seeking for gaining more and more competitive advantages through managing and maximizing their most valuable asset, i.e., knowledge. While knowledge management (KM) has been used and operated in the business world for decades, its applications, which involve recognition of knowledge, development of information system and support of organization, have just been initiated in Taiwan life insurance industry recently. The issues of knowledge management have been discussed widely by a number of researchers. However, there is a genuine lack of knowledge management adoption and practice model for the life insurance industry. This study addresses this research gap via conducting empirical surveys with an embedded qualitative field study among the life insurance enterprises in Taiwan. The research aims to examine the value of knowledge, perception of knowledge management and the factors of knowledge management adoption and practice in the context of Taiwan life insurance industry.The research was carried out in three main phases. In the first phase, a tentative research model was developed through a comprehensive literature review. A qualitative field study was then undertaken to fine-tune the research model. Six life insurance companies participated in the field study, resulting in ten interviews with key persons in the companies. A semi-structured interview protocol was used to collect the data. Via the procedures of content analysis, twelve factors and ninety-three variables were identified from the field study. The combined research model was thus developed by incorporating the results from the field study and the tentative research model which was proposed based on the extensive literature review.In the second phase, a questionnaire was developed, according to the combined research model. The research instrument was pilot tested by surveying several managers and staff in a life insurance company in Taiwan. The findings from the empirical pilot survey indicated that the research instrument was relatively reliable. However, some minor amendments were made based on the feedback from pilot test.In the third phase, a nation-wide main survey was administered among 605 managers and staff within different departments and sections in the life insurance companies in Taiwan. 362 valid responses were collected in this phase which yielded a 59.8% effective response rate. The national survey data were analyzed using Partial Least Squares (PLS) based Structural Equation Modeling technique.The findings revealed that “environments and industrial factors”, “knowledge management promotion” as well as “cultural factors” significantly influenced the “perceived usefulness” of knowledge management. However, the effect of the “complexity” concerning knowledge management on employees’ attitudes toward its adoption was found to be insignificant in this study. It was “individual characteristics”, “perceived usefulness” and “subjective norm” that significantly influenced the employees’ attitudes toward knowledge management adoption. It thus implied that the employees would attempt to overcome the difficulties involved in knowledge management as it was perceived useful for them and there was an environment in which knowledge management activities were valued and encouraged. Moreover, the results indicated that “attitude toward KM adoption” significantly influenced knowledge management practice, which in turn affected the perceived performance of the organization.The research model well explained how knowledge management was adopted and applied in Taiwan life insurance enterprises. This study thus contributes significantly to the existing literature since there was little research available in investigating life insurance enterprises’ adopting and applying knowledge management. In the meantime, the findings of this study also provide managerial implications to the life insurance business, particularly that embarking on knowledge management in Taiwan. Finally, the applications of this study can be extended through further adaptation in other financial industries and various geographic contexts.