Effects of Organizational Agility and Knowledge Sharing on Competitive Advantage: An Empirical Study in Jordan

Abstract

This paper investigate the role of agile capabilities and knowledge sharing practices in gaining competitive advantage in manufacturing companies in Jordan. Data was collected from a convenience sample of 112 senior managers each from a different listed manufacturing company in Jordan. The respondents were asked to complete a specially-developed mailed questionnaire designed to assess each of the research variables. Multiple regression was used to analyse the data in which the independent variables were regressed on to competitive advantage, as measured by the manager's perceptions of this in their own companies. The main findings of this paper are that: agile capabilities have a significant effect on organisational competitive advantage; knowledge sharing practices have a significant positive effect on organisational competitive advantage; there is a need to establish agile capabilities and knowledge sharing practices to gain a competitive advantage in the manufacturing context. Managerial implications include the need to provide guidance for linking agile capabilities and knowledge sharing practices for competitive advantage, and the development of measures and a checklist that evaluate to what extent manufacturing companies possess agile capabilities and utilise knowledge sharing to gain competitive advantage. Introduction Today's business environment is characterised by global competition that is highly uncertain, unpredictable, hostile, and dynamic. As a condition for long-term sustainability and competitiveness, firms are finding it increasingly important to develop their employees' skills, competencies, capabilities, and knowledge to respond to changes in business environment. Creating these skills, competencies, capabilities, and knowledge practices should be faster than direct competitors to gain and maintain competitive advantage (Porter, 1990). Several agile methodologies, frameworks, and techniques are suggested to cope with uncertainty to gain competitive advantage (Sharifi and Zhang, 1999; Sherehiy et al. 2007; Jain et al. 2007). Agile capabilities and knowledge sharing practices seems to be among others that contribute to a firm's competitive advantage. For agility (agile capabilities), different concepts and terms were used in the literature interchangeably referring to organization agility, for example, flexibility, responsiveness, adaptability, etc. However, some scholars clearly distinguish between these terms and concepts (Conboy and Fitzgerald, 2004), while others use them synonymously (Sharifi and Zhang, 1999; Yusuf et al. 1999, 2004). The fact is that all related concepts and terms to organizations agility concentrate on an organization's abilities to adapt its processes, strategies, production lines, resources, and so onto respond to the new circumstances created by change. This conveyed the clear notion that there is no widely accepted definition for organization agility. The reason for a lack of an accepted definition might be attributed to irrelevant, imprecise, vague, surrogate, fuzzy logic, linguistic expression, and operational measures(Giachetti et al., 2003; Arteta and Giachetti, 2004; Lin et al., 2006a; Jain et al, 2007). Knowledge sharing practices within organizational units are expected to enhance a firm's ability to respond proactively and innovatively to a changing business environment. Knowledge sharing practices contribute to cost reduction, responsiveness to customer needs, product and service offerings, business process improvements, and growth of market share (Law and Ngai, 2008). In a highly competitive business environment, a firms' ability to develop new products, services, and processes better than its competitors depends on how effective knowledge sharing practices are established and spread among employees. Thus, knowledge sharing might lead to a quick response to customer needs at a reasonable cost. In spite of the importance of knowledge sharing and agile capabilities to cope with uncertainty in business environment for gaining competitive advantage, there is still a dearth of empirical research that address agile capabilities, knowledge sharing, and competitive advantage. …

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