Knowledge Management Capability, Top Management Team Demographics and Market Capitalizing Agility in the Banking Sector of the Kingdom of Saudi Arabia

Abstract

In this study, we examine the relationship between knowledge management capability and market capitalizing agility which is an important antecedent of competitive advantage in organizations. We first set out to determine the Knowledge Management and organisational agility dispositions and then tested the relationship between the two in the Kingdom of Saudi Arabian banking sector using data from 285 respondents from the commercial banks. Data was collected using structured questionnaires that were derived from literature and tested for validity and reliability prior to their use. We found that the relationship between knowledge management capability and market capitalizing agility was weak, negative and not significant at p < 0.05 but at p < 0.1 (r = - 0.142, p < 0.063). We also compared the mean scores of the two strategic capabilities across a set of demographic variables and found significant (p < 0.01) variation in the two strategic capabilities across age, level education, and working experience. Further using Chi Square analysis, we established that both market capitalizing agility and knowledge management capability had a significant relationship with TMTs work experience (?2 = 89.705 & 97.69; P < 0.01), level of education (?2 = 7.78 & 4.4976; P < 0.01) and TMTs age (?2 = 21.213 & 57.836; P < 0.01). This is one of first attempt to examine the relationship between Knowledge Management Capability (lower order capability) and Market Capitalizing Agility (higher order capability) in an emerging economy context. The findings imply that Knowledge Management Capability has not reached the threshold to positively influence the Market Capitalizing Agility which is necessary for superior performance. Furthermore, there are TMTs demographic characteristics (Age, level of education and tenure / work experience) that impact both Knowledge Management Capability and Market Capitalizing Agility.

Key words: Knowledge Management, Market Sensing Agility, Demographics