Knowledge management practices and innovation in commercial banks in Kenya

Christine K. Ondieki; Henry K. Kombo

doi:10.51867/ajernet.6.4.54

Authors

Christine K. Ondieki Egerton University, Kenya https://orcid.org/0009-0001-1532-2745
Henry K. Kombo
hkkombo@egerton.ac.ke
Egerton University, Kenya https://orcid.org/0009-0000-3481-6962

Keywords:

Commercial Banks, Innovation, Kenya, Knowledge Management Practices

Abstract

The increasingly competitive environment has made organizations realize that knowledge is a key asset in enhancing innovation that is critical in achieving customer satisfaction and competitive advantage. This study sought to examine the effect of knowledge management practices on innovation in commercial banks in Kenya. Knowledge-based view theory guided the study. Explanatory research design and cross-sectional survey research design were adopted. The study employed a census survey of all 38 commercial banks in Kenya. Data was collected using a structured questionnaire. Descriptive statistics such as means and standard deviations were used to summarize the data. Pearson’s correlation was used to examine the relationship between knowledge management practices and innovation. To test the research hypothesis, multiple regression analysis was used. The results revealed that commercial banks in Kenya practice knowledge management, as indicated by high mean scores for knowledge generation (mean = 4.28), knowledge sharing (mean = 4.34), knowledge storage (mean = 4.41), and knowledge application (mean = 4.49). The banks also practice innovation (mean = 4.31). Correlation analysis revealed positive and significant relationships between all aspects of knowledge management and innovation, with the strongest correlations observed for knowledge generation (r = 0.616, p < 0.05) and knowledge application (r = 0.602, p < 0.05). These results suggest that effective knowledge management is closely linked to innovation in Kenyan commercial banks. Regression analysis showed that all the knowledge management practices, namely knowledge generation (β = 0.353, p < 0.05), knowledge sharing (β = 0.112, p < 0.05), knowledge storage (β = 0.095, p < 0.05), and knowledge application (β = 0.300, p < 0.05), have a positive effect on innovation. Further, the ANOVA indicated that the effect of knowledge management practices on innovation is significant (F = 4.953, p < 0.05). This suggests that effective management of knowledge enhances the ability of banks to innovate. The study recommends that organizations ought to embrace effective knowledge management practices to enhance innovation and competitive advantage.

Dimensions

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