Linking Knowledge Creating Capabilities, IT Business Value and Digital Business Value: An Exploratory Study in Japanese SMEs

Abstract

Aiming to address the increasing focus on digital technologies and the continuous concern of Knowledge Management (KM) performance, this study explores the relationship between 'Knowledge Creating Capabilities', 'IT business value' and 'Digital business value'. The latter two concepts are re-defined as the achievement of business objectives by the use of IT or digital technologies in a balanced scorecard approach. The concepts of 'Knowledge Creating Capabilities' and 'Balanced SECI' are leveraged. Balanced SECI (Riera, Senoo and Iijima, 2009) refers to the balance of the four knowledge creation processes from Nonaka and Takeuchi’s SECI model (1995). This framework is applied to Japanese small and medium enterprises. A positive relationship between the achievement of business objectives by IT and the achievement using digital technologies was verified. On the other hand, although a relationship of 'Balanced SECI' with 'IT Business Value' or 'Digital Business Value' was not statistically significant; the observations showed that higher levels of 'Balanced SECI' were negatively related to the achievement of Financial, Customer and Business Processes types of business objectives and; positively related to Learning & Growth. Analysis from each SECI process confirmed such behaviour.