Research Background and Motivation

Within the knowledge age, knowledge management, knowledge creation in particular, is one of the most important strategies that organizations have been trying to adopt to gain competitive capability. Therefore, labor, land, and capital are no longer the only factors that significantly affect performance. Knowledge creation is one the key elements that help differentiate from competitors. For the past decades, researchers and business management have contributed much effort on the exploration of KMS related solutions, such as what creation mode can lead to better performance? What characteristic of organization culture is best to help deliver KM programs? What is the causal relationship between knowledge creation modes and creation performance?

How can information technology (IT) be used in helping knowledge creation, acquisition, and sharing? Findings depicted in literature help us better go into the KMS development looking at and searching for better solutions (Hellström and Jacob, 2003; Nonaka, 2004). However, from the stand viewpoint of KMS life cycle, it is found that there are six major stages that steering the knowledge management development (Yeh, 2004). They are 1) knowledge creation, 2) knowledge acquisition,

3) knowledge standardization, 4) knowledge storage/sharing, 5) knowledge adoption, and 6) knowledge evaluation. Generally, the life cycle helps direct an organization to better develop and implement a KMS, and accordingly makes an organization a knowledgeable body to better adjust itself with swift changes. Furthermore, it is well believed that the knowledge is the source of knowledge management program.

Evidences depicted in literatures have also shown that knowledge creation is one of the keys to business competition (Drucker, 1986; Angle et al., 1989; Hill and Jones, 1998; Hage, 1999; Lin, 2001; Hellström and Jacob, 2003; Martins and Terblanche, 2003; Amabile, 2004; Zairi and Al-Mashari, 2005).

In general, there are four key elements for knowledge creation (4P): (1) product, (2) person, (3) process, and (4) press (Rhodes, 1961; Fellers and Bostrom, 1993;

Nagasundaram and Bostrom, 1995; Satzinger et al., 1999). The product concerns mainly with the creative ideas, new design, new product, new strategy, or new plan.

The person is viewed as the subject who participates directly or indirectly in the creative process and may be a person, group or organization (Raudsepp, 1983;

Torrance, 1990). The process is a procedural or method which individuals and groups use to generate creative activities. In general, it is so-called “creative thinking” and main concerns are to explore the effective procedure in human generating creative activities (e.g. Gorden, 1961; Bono, 1992), to design the procedure and method of creative activities (e.g. Gorden, 1961; Isaksen and Treffinger, 1985; Bono, 1992), and to explore the effect of method on creative training (Necka, 1984; Gendrop, 1996;

Titus, 2000). The press is the environmental factors in creativity activities, such as performance evaluation, competition, organizational culture, group norms, organizational vision and goals, even space (e.g. Cumming and Oldham, 1997;

Leonard and Swap, 1999). However, in order to clarify the difference between

creativity and innovation, Leonard and Swap (1999) suggested that creativity is a process which generate, develop and express possible, useful, novel idea, while innovation is the final outcome of creative process and is also a representation, expression, and interpretation of knowledge in the novel, related, valuable new product, process or service. In other words, creativity is idea generation and innovation has practical purpose or business value. Therefore, innovation is regarded as idea adoption or implementation. This is also supported by Sternberg and Lubart (1999) that creativity as the ability to generate work that is both novel (i.e. original, unexpected) and appropriate (i.e. useful, adaptive concerning task constraints).

Innovation is about a process of developing and implementing a new idea. It is the generation, acceptance, and implementation of new ideas, processes, products, or services.

Knowledge creation is a concept with various meanings. Following the emphasis on knowledge management field, the term knowledge creation is usually found in recent literature. Basically, knowledge is an abstract concept. Organizational knowledge is diversities, and may exist in organizational management function and activities (Spender, 1996; Matusik and Hill, 1998). Therefore, this thesis regards that the final outcome of creativity or innovation is generally represented by the physical “product”

or “service”; the final outcome of knowledge creation can be showed on not only the creative ideas or innovation performance, but also on the other 3P activities. For example, individuals and groups can improve their creativity to enhance the ability of innovation by learning the procedures or methods in a specific environment or culture.

Consequently, this thesis regards knowledge creation as including creativity and innovation and the performance of knowledge creation also contain the outcomes of

innovation performance. In this thesis, therefore, we regard knowledge creation as the inclusion of creativity and innovation.

There are many factors that may influence the performance of knowledge creation, such as environment, incentives, information available. Consequently, many researchers have been devoting much effort onto the knowledge creation related issues to find more relevant solutions helping better creation performance. These can be on the facet of culture, facet of management, facet of creation mode, and facet of education and cognition. Among these factors, it is realized that the goal is one of the key elements while performing knowledge creation. In other words, whether or not a goal is defined may have potential impact on the final achievements. Eventually, the objective is to improve organizational performance by the enhancement of creation performance. Accordingly, this research project focuses on the study of causal relationship examination between knowledge creation modes and creation performance. This study considers two creation modes by Scriven (1977) and Patton (1987) goal-free and goal-driven. The goal-free mode asserts that creation should be carried out in a thinking space with full freedom while the goal-driven argues that the creation should be conducted under a predefined goal. However, since there is no evidence that can be relied on to appropriately category the knowledge creation modes. This study performed the factor analysis and obtained one more mode, goal-depended creation mode, which basically is to pursue that creation activities ban be performed according to the goal that is defined by a specific level of creation implementation.

In addition, literature has shown that organizational culture could have relationship to the performance of knowledge creation (Damanpour, 1991; Deshpandé et al., 1993;

Syrett and Lammiman, 1997; Tushman and O’Reilly, 1997; Chandler et al., 2000;

Martins and Terblanche, 2003). In general, the nature of organizational culture tends to make regulative behaviors that individuals or groups should obey. In other words, it could form regulations and behaviors organization likes and accepts, such as organizational structure formulation, policy establishment, procedural control, and management practice. However, with respect to the impact of organizational culture on creation mode, there is no evidence so far indicating that who is the independent variable and who is the dependent. On the one hand, a specific characteristic of organizational culture could be formulating a creation method, and thereafter influence the creation performance. On the other hand, different creation modes could be supportive to form an innovative environment and consequently shape a distinctive organizational creative culture. Although many research have addressed theoretically the relationship between organizational culture and creation performance, and how organizational culture increases creation performance, it is less to use empirical research to examine their causal relationships. Therefore, this study also attempts to reveal the impact of organization culture on creation modes (goal-free, goal-driven and goal-depended). Styles of organizational culture are based on four characteristics by Quinn (1988), market, adhocracy, hierarchy, and clan. For the dependent variable (creation performance), this study considers creation for product, creation for manufacturing processes, and creation for management. The population is based on the industry with a characteristic of patents at least 20 in the previous 10 years (1997-2006).