International Research Journal of Finance and Economics

ISSN 1450-2887 Issue 48 (2010)

© EuroJournals Publishing, Inc. 2010
http://www.eurojournals.com/finance.htm

Applying Knowledge Management in the Life Insurance

Industry – Evidence from Taiwan

Li-Su Huang
Department of Finance, MingDao University, Chang-Hua, Taiwan
E-mail: lisuhuang@mdu.edu.tw

Cheng-Po Lai
Department of Finance & Institute of Financial Management
Nanhua University, Chia-Yi, Taiwan
Tel: +886-5-2721001 Ext. 56228; Fax: +886-5-2427172

Abstract

In the trend of globalization and coordination of banks, insurance and security

enterprises, the life insurance industry has been facing tremendous competitive pressure.
Business in the era of knowledge economy has realized that efficiently capturing the
knowledge embedded in their organizations and deploying it into operations and services
will create an edge over their competitors. Though the issues of knowledge management
(KM) have been discussed widely, there is a genuine lack of empirical research for the life
insurance sector. This study addresses the research gap via extensive literature review and
conducting empirical surveys with an embedded qualitative field study among the life
insurance enterprises in Taiwan. The findings revealed that most of the respondents agreed
that KM would improve their job performance in enhancing service quality, saving time
and being more effective at work, and the opinions from senior management played an
important role in having KM into place. Nonetheless, there were a majority of the
respondents indicated several obstacles in adopting and implementing KM. We also found
that the main KM activities conducted among the respondents were sharing, converting and
using knowledge. Finally, managerial suggestions and further research directions are
provided.

Keywords: Knowledge Management (KM), Innovation Diffusion, Life Insurance Industry

1. Introduction
There has been a growing recognition in the business community viewing knowledge as a critical
resource and knowledge resources matter more than conventional ones, e.g., land and capital (Wu and
Wang, 2006). The knowledge-based view provides a theoretical basis on why knowledge-based
resources are crucial in creating the sustainable competitiveness of the firm (Choi and Lee, 2003;
Spender, 1996). Knowledge management (KM) practices enhance the flow of insight and advice
between employees and therefore they can benefit from other’s expertise (von Krogh et al., 2000). The
idea that enterprises can improve employees’ use of knowledge via KM has been widely accepted
among practitioners, whilst few organizations have tackled KM as successfully as they should. Parlby
(2000) reported that many organizations still faced serious problems in managing knowledge,
including lack of KM policies, difficulty of capturing tacit knowledge and knowledge overload.
International Research Journal of Finance and Economics - Issue 48 (2010) 116

In this study, knowledge is defined as the understanding, awareness, or familiarity acquired

through study, investigation, observation, or experience over the course of time (Bollinger and Smith,
2001). In the case of life insurance business, “knowledge” refers to the familiarity and professional
capability in new policy design, underwriting, claim, customer service and so on. Carlsson (2001)
suggests that KM is the process of identifying, managing and leveraging individual and collective
knowledge to support the firm become more competitive. Gupta et al. (2000) propose that KM is a
process that helps organizations find, select, systematize, disseminate and transfer important
information and expertise necessary for activities. KM is also referred to manage the corporation’s
knowledge through a specified process for acquiring, organizing, sustaining, applying, sharing and
renewing the knowledge of employees to enhance organizational performance and create value
(Davenport and Prusak, 1998; Alavi and Leidner, 2001). According to Horwitch and Armacost (2002),
we define KM as the creation, extraction, transformation and storage of the correct knowledge and
information in order to design better policy, modify action and deliver results for both the employees
and organizations in the life insurance industry.
Life insurance can be seen as an arrangement through which the risk of specific individuals can
be share by the general majority of people (Hsiao, 2003). Different from other industries, the products
sold by the life insurance business are comparatively “invisible” and “untouchable” (Hsiao, 2003).
“People” play an important role in conveying the knowledge and services to the customers in the life
insurance industry. The life insurance industry sells insurance policies which are composed of the
obligation, image, service and knowledge of the companies. KM would be imperative for life insurance
companies to enhance performance and gain a competitive edge (Wang, 2005). Although KM has
employed in the business world for decades, its adoption and applications have been just launched in
Taiwan’s life insurance business recently. Innovation Diffusion (ID) has drawn much attention of
researchers in several areas (Baptista, 1999; Carter et al., 2001; Wolcott et al., 2001). However, there is
little literature found on the adoption and diffusion of KM, particularly in the life insurance domain.
Thus, this study lays emphasis on the adoption and diffusion of innovation to identify motivations and
barriers among the employees who are important in undertaking KM activities in life insurance
enterprises. Our main concerns are as follows: (i) what are the employees’ perceptions regarding KM?
(ii) what are the employees’ attitudes toward KM adoption? and (iii) what are the KM activities
conducted among them in this context?

2. The Role of KM for the Life Insurance Business

The swift expansion of product varieties in the past few years has a great impact on the life insurance
enterprises in several aspects, such as the increase of paper usage, involving more complicated
administration work and growing demands from the customers (Wang, 2005). Wang (2005) advocated
that managing knowledge to enhance service quality and performance would be indispensable for the
life insurance industry to gain sustainable competitive advantages. Alavi and Leidner (2001) suggest
that knowledge can be the essential resources to create sustained competitive advantages since it is
closely related to specific organizational structure and culture, and intrinsically difficult to imitate. The
individual employees in an organization contribute their knowledge based on personal interpretations
of information. Group interpretations of knowledge rely on the total members of the group. Moreover,
organizational knowledge and its approaches to manage the knowledge are built on the unique history
of the organizational own experiences and accumulated expertise (Bollinger and Smith, 2001).
Even with the competitive necessity of becoming a knowledge-based organization, some
managers have found it difficult to “transform” their firms via KM initiatives, especially when their
organizations have long histories of development (Gold et al., 2001). Gold et al. (2001) indicated that
while a number of companies have commenced extensive KM efforts, many of their projects are
simply information projects in reality. Yang (2004) reported that the life insurance enterprises in
Taiwan put most of their emphases on information system development. The mission of the life
117 International Research Journal of Finance and Economics - Issue 48 (2010)

insurance industry to move beyond information management and into KM is a multifaceted

undertaking (Gold et al., 2001) that involves the development of structure and environment in which
knowledge can be recognized, created, distributed and used efficiently.
Compared with other industries, the life insurance business in Taiwan can be seen as in the
infant stage of KM applications. Therefore, learning from others’ experiences and realizing the
potential obstacles would be valuable for the life insurance enterprises which attempt to commence
KM in their organizations. Davenport (1996) indicated that firms wishing to effectively manage
knowledge needed a heavy does of human labor. While computers and new technologies are good at
capturing, transforming and distributing highly structured knowledge that changes rapidly, human
beings are relatively proficient at certain knowledge skills, e.g., interpreting knowledge within a
broader context, combining knowledge with other types of information and synthesizing various
unstructured forms of knowledge (Davenport, 1996). Consequently, the employees play important
roles in the life insurance business and their cooperation and attitude would be crucial in determining
whether their companies could successfully proceed KM projects or not.

3. Literature Review
An innovation is described by Rogers (1995) as “an idea, practice, or object that is perceived as new by
an individual or another unit of adoption”. As stated earlier, adopting and applying KM is a relatively
new phenomenon in Taiwan’s life insurance industry. The suggestions of Innovation Diffusion (ID)
(Rogers, 1995) provide the foundation of the processes of KM adoption and diffusion involved at both
individual and organizational levels. Hence, KM adoption and practice in the life insurance business
includes the innovation processes in organizations and the innovation-decision process of individuals.
Innovation-development process consists of all the decisions and activities, and their impact, that occur
from recognition of a need or a problem, through research, development, and commercialization of an
innovation, through diffusion and adoption by users, referring to the employees in this research, to its
consequences (Rogers, 1995). Therefore, in having KM utilized in the life insurance industry, it is
generally initiated by the organizations by recognizing the needs or problems, having done some
research, developing KM plans or projects, and transmitting the concept and value of KM. However, in
adopting and diffusing KM, the organizations would need the employees to implement the activities
and processes associated with KM. In this study, KM is viewed as an innovation for the life insurance
enterprises and their employees. Therefore, we examine the role of KM for the life insurance industry
according to the characteristics of innovations: (i) relative advantage; (ii) compatibility; (iii)
complexity (iv) trialability; and (v) observability. Rogers (1995) also proposes that ID is “the process
by which an innovation is communicated through certain channels over time among the members of a
social system”. In this research, KM adoption and practice refers to the process by which KM is
communicated via certain channels over time among the employees of the life insurance enterprises.
Ajzen and Fishbein (1980)’s Theory of Reasoned Action (TRA) posits that a person’s behavior
is a function of the person’s intention determined by the attitude toward the act and the beliefs about
the expectations of others, namely social normative beliefs. The person’s attitude toward the behavior
is affected by the beliefs that the behavior will lead to certain outcomes and by his or her evaluation of
the outcomes. The subjective norms are influenced by the beliefs that specific referents that the person
should or should not perform the behavior and by the motivations to comply with the specific referents
(Ajzen and Fishbein, 1980). Technology Acceptance Model (TAM) (Davis, 1986; Davis, 1989)
suggests that a person’s intention to use technology is determined by perceived usefulness and
perceived ease of use. Perceived usefulness refers to the degree to which a person believes that using a
particular system would enhance his or her job performance, while perceived ease of use refers to the
degree to which a person believes that using a particular system would be free of effort. The
propositions of TAM can be applied in examining what benefits KM would bring to the employees in
increasing their job performance and whether KM projects with relevant information technology (IT)
International Research Journal of Finance and Economics - Issue 48 (2010) 118

usage are easy or complicated for the employees. As IT utilization plays an important role in
implementing KM, we consider that the TRA and TAM are helpful in understanding the adoption and
diffusion of KM among Taiwan’s life insurance enterprises.
Based on the theories of ID, TRA and TAM as described above, we attempt to explore the
adoption and applications of KM via investigating the following dimensions: (i) perceived usefulness;
(ii) complexity; (iii) subjective norm; (iv) attitude toward KM adoption; and (v) KM activities.

3.1. Perceived Usefulness

Ajzen and Fishbein (1980) in the TRA propose that a person’s beliefs that the behavior leads to certain
outcome and his or her evaluation of the outcome would influence his or her attitude toward the
behavior. Extended from TRA, Davis et al. (1989) in TAM define perceived usefulness as “the degree
to which a person believes that using a particular system would enhance his or her job performance”.
Applying motivation theories into TAM and viewing perceive usefulness as an example of extrinsic
motivation, Davis et al. (1992) refer extrinsic motivation to the performance of an activity because it is
perceived to be instrumental in achieving valued outcomes that are distinct from the activity itself, such
as improved job performance, pay, or promotions. Davis et al. (1989) indicated that perceived
usefulness was a major determinant of people’s intention to use computer. Gefen et al. (2000) reported
that perceived usefulness played an essential role in the intended use and self-reported usage by stating
that people’s intentions to use computers in an organization were based mainly on a cognitive appraisal
of how the systems will help them achieve enhanced performance.
Moore and Benbasat (1991) identify relative advantage as “the degree to which using an
innovation is perceived as being better than using its precursor”. Moreover, Rogers (1995) suggests
that the characteristics of innovations, namely relative advantages, compatibility, complexity,
trialability and observability, as perceived by individuals, help to explain their different rate of
adoption. According to Rogers (1995), people would tend to adopt KM when they perceive that KM is
better than it supersedes.
Based on Davis (1989) and Davis et al. (1989), the features of perceived usefulness can be
described as follows: using a system would (i) enable an individual to accomplish tasks more quickly;
(ii) improve his or her job performance; (iii) increase his or her productivity; (iv) enhance his or her
effectiveness on the job; (v) make it easier to do his or her job; and (vi) let the individual find the
system useful in his or her job. Davis (1993) measured perceived usefulness by asking the following
ten questions: “(i) using X (electronic mail) improves the quality of the work I do; (2) using X gives
me greater control over my work; (iii) X enables me to accomplish; (iv) X supports critical aspects of
my job; (v) using X increases my productivity; (vi) using X improves my job performance; (vii) using
X allows me to accomplish more work than would otherwise be possible; (viii) using X enhances my
effectiveness on the job; (ix) using electronic mail makes it easier to do my job; and (x) overall, I find
the X system useful in my job.”
Venkatesh et al. (2003) reported that outcome expectations, consisting of performance
expectations (job-related) and personal expectations (individual goals), were related to the
consequences of the behavior. The items measuring the outcome expectations were: “If I use the
system…(i) I will increase my effectiveness of the job; (ii) I will spend less time on routine job tasks;
(iii) I will increase the quality of output of my job; (iv) I will increase the quantity of output for the
same amount of effort; (v) My coworkers will perceive me as competent; (vi) I will increase my
chances of obtaining a promotion; and (vii) I will increase my chances of getting a raise (Venkatesh et
al., 2003).

3.2. Complexity
Complexity is defined in this study as “the degree to which KM is perceived as difficult to understand
and use” (Rogers, 1995). Complexity is one of innovation characteristics that play significant roles in
119 International Research Journal of Finance and Economics - Issue 48 (2010)

the adoption and diffusion of innovations (Rogers, 1995). Some innovations are readily understood by
most members of a social system, while others are more complicated and will be adopted more slowly.
According to Rogers (Rogers, 1995), new ideas that are simpler to understand are adopted more
rapidly than innovations that require the adopter to develop new skills and understandings.
Consequently, whether KM is simply to realize and employed decides the degree of employees’
acceptance of KM.
Complexity is also used by Thompson et al. (1991) to identify the degree to which a system is
perceived as relatively difficult to understand and use. The opposite of the concept of complexity can
be referred to the perceived ease of use widely used in TAM studies. Perceived ease of use is defined
as “the degree to which a person believes that using a particular system will be free of effort” (Davis,
1989; Davis et al., 1992; Davis, 1993). Moore and Benbasat (1991) address that the concept of
complexity in the theory of ID and perceived ease of use in TAM resemble each other in referring to
the perceptions regarding how difficult or easy an innovation was to understand, learn and use.
Complexity in the theory of ID is adopted in this study. The main rationale is that complexity is
an essential determinant in innovation adoption and diffusion, whilst perceived ease of use is more
related to use of information system. KM comprises not only using information system, but also
employing new ideas and practices. Complexity is thus considered more appropriate for explaining the
complicatedness involved in KM.
To observe the construct of complexity, Thompson et al. (1991) used the following items: (i)
using the system takes too much time from my normal duties; (ii) working with the system is so
complicated; it is difficult to understand what is going on; (iii) using the system involves too much
time doing mechanical operations (e.g., data input); and (4) it takes too long to learn how to use the
system to make it worth the effort. On the other hand, Davis (1993) measured perceived ease of use by
asking several adverse questions, including that: “(i) I find X system cumbersome to use; (ii)
interacting with X system is often frustrating; (iii) the X system is rigid and inflexible to interact with;
(iv) interacting with the X system requires a lot of mental effort; and (v) I find it takes a lot of effort to
become skilful at using X, comply with the concept of complexity.”

3.3. Subjective Norm

Subjective norm is defined as “the person’s beliefs that specific individuals or groups think he should
or should not perform the behavior” (Ajzen and Fishbein, 1980). Subjective norm refers to the person’s
perception of the social pressures put on him or her to perform or not perform the behavior. It is argued
by Ajzen and Fishbein (1980) that a person who believes that most referents with whom the person is
motivated to comply think he or she should perform the behavior would perceive social pressure to do
so. According to Ajzen and Fishbein (1980), subjective norm and a person’s attitude toward the
behavior, i.e., the person’s judgment that performing the behavior is good or bad, determine his or her
behavior intention. In this study, subjective norm helps describe the social influence that may affect a
person’s attitude toward KM adoption and thus on their behavior in conducting KM activities.
In the theory of ID, Rogers (1995) also identifies that social system is a major element in the
diffusion of innovations. A social system is a set of interrelated units that are engaged in joint problem
solving to accomplish a common goal. The social system constitutes a boundary within which an
innovation diffuses. The system norms, “the established behavior patterns for the members of a social
system” (Rogers, 1995), tells individuals what behavior they are expected to perform. In this research,
the system is referred to an organization, i.e., life insurance enterprise, in which the concept and
applications of KM is adopted and diffused.
Regarding who or what establishes the subjective norm for the members of a social system,
Ajzen and Fishbein (1980) developed a standard question that, “most people who are important to me
think I should…” Based on the standard question above, the ensuing studies (Davis et al., 1992;
Venkatesh et al., 2003) used the question that, “people who influence my behavior think that I should
…”, to observe subjective norm. Examining the construct of subjective norm in an organizational
International Research Journal of Finance and Economics - Issue 48 (2010) 120

scenario, Thompson et al. (1991) adopted the following items: “(i) I use the system because of the
proportion of co-workers who use the system; (ii) the senior management of this business has been
helpful in the use of the system; (iii) my supervisor is very supportive of the use of the system for my
job; and (iv) in general, the organization has supported the use of the system.”

3.4. Attitude toward KM Adoption

“Attitude toward the behavior” is suggested by Ajzen and Fishbein (1980) to be the personal factor that
is critical in influencing a person’s intention which is viewed to be good predictors of behavior. The
personal factor is the individual’s positive or negative evaluation of performing the behavior. A
person’s attitude refers to his or her judgment that performing the behavior is good or bad and that he
or she is in favor of or against performing the behavior (Ajzen and Fishbein, 1980)
The TAM framework of Davis et al. (1992) posits that a potential user’s attitude toward using
an information system determines the system’s actual usage. “Affect toward use”, adopted by
Thompson et al. (1991) in examining personal computing utilization, means the feelings of joy, elation,
or pleasure associate by an individual with a particular act.
According to the innovation-development process (Rogers, 1995), after organizational
recognition, research and development of KM, the innovation, i.e., KM in this context, would need the
employees to adopt the concept and methods of KM and then implement the related activities.
Therefore, the “behavior” in this stage is “KM adoption” and the “attitude toward the behavior” refers
to the “attitude toward KM adoption” in this research.
Ajzen and Fishbein (1980) propose the measurement format for attitude as follows: “my voting
in the next presidential is: (i) harmful/beneficial; (ii) good/bad; (iii) rewarding/punishing; and (4)
unpleasant/pleasant.” Thompson et al. (1991) asked about “affect toward use” by using the flowing
items: (i) the system makes work more interesting; (ii) working with the system is fun; and (iii) the
system is okay for some jobs, but not the kind of job I want. The “attitude toward technology usage”
was examined by asking: “(i) using the system is a bad/good idea; (ii) the system makes work more
interesting; (iii) working with the system is fun; and (iv) I like working with the system (Venkatesh et
al., 2003).

3.5. KM Activities
Gold et al. (2001) suggest that KM processes, knowledge infrastructure of technology, as well as
structure and culture, are the primary organizational capabilities that would positively and significantly
influence the organizational effectiveness. The processes of KM can be categorized into four main
phases: knowledge acquisition, knowledge conversion, knowledge application and knowledge
protection. Acquisition–oriented processes refer to those oriented toward obtaining knowledge, e.g., to
acquire, seek, generate, created, capture, and collaborate knowledge (Dyer, 1997; Inkpen and Dikur,
1998; Nonaka and Takeuchi, 1995). Conversion-based processes are those oriented toward making
existing knowledge into useful form, such as the activities to organize, integrate, combine, structure,
coordinate, or distribute knowledge (Davenport et al., 1998; O’Dell and Grayson, 1998). Application-
oriented processes are those oriented toward the actual us of knowledge, including storage, retrieval,
application and contribution of knowledge (Skyrme and Amidon, 1997; Spender, 1996). Security-
based processes are those designed to protect the knowledge from illegal use or theft, such as
protecting knowledge via patents, trademarks and copyrights (Porter-Liebskind, 1996).
Shin et al. (2001) propose a KM value chain, which consists of four major activities, including
knowledge creation, knowledge storage, knowledge distribution and knowledge application. Holsapple
and Singh (2001) suggest a knowledge chain model which is composed of the primary activities, e.g.,
acquisition, selection, generation, internalization and externalization, as well as the secondary
activities, e.g., leadership, coordination, control and measurement. It is advocated that organizations
121 International Research Journal of Finance and Economics - Issue 48 (2010)

could focus on the KM activities in the knowledge chain model to achieve their competitiveness
(Holsapple and Singh, 2001).
According to Gold et al. (2001), the main activities in proceeding KM includes: generating new
knowledge from existing knowledge, filtering knowledge, organizing knowledge, integrating different
sources and types of knowledge, distributing knowledge thorough the organization, using knowledge to
develop new products and services, as well as solve new problems and improve efficiency. Hung
(2004) explored the implementation of KM among the small and medium-sized enterprises in Taiwan
by using the following measures: (i) the process of knowledge creation; (ii) the process of knowledge
storage; (iii) the process of knowledge distribution; and (iv) the process of knowledge application.

4. Research Method
A tentative research questionnaire was developed based on the literature review and then fine-tuned via
a qualitative field study, in which ten interviewees were invited to participate. In the field study, the
transcripts were transcribed rigorously by the researchers and the data were analyzed using content
analyses (Berg, 2004). Stage one dealt with single interview transcripts, and stage two dealt with cross
interview transcripts to integrate all the individual factors, variables and their relationships, referring to
the literature (Huang et al., 2006).
The questionnaire was reviewed by three knowledge workers who had years of experience in
the sector of life insurance and management in Taiwan. In addition, the processes of back translation
were conducted by a reliable translator. The feedbacks from the reviews and back translation were
collected to revise the questionnaire. The revised questionnaire was pilot tested with 40 managers and
staffs in different departments and sections of a life insurance company in Taiwan. 26 valid responses
were collected and thus yielded a 65% response rate. Reliability tests were used to analyze the data and
the values representing the internal consistency of the constructs were considered to be satisfactory.
Finally, we conducted a questionnaire survey among 605 employees of the life insurance
enterprises in Taiwan, using the approach of cross-sectional studies (Zikmund, 2000). Various
segments of Taiwan life insurance industry were sampled at a single point in time and the selected
enterprises varied in terms of history, size and location (Zikmund, 2000). The questionnaires were
distributed to the target respondents, i.e., office managers and staffs who worked full time and were
involved in knowledge work to some extent in their organizations. A total of 362 valid responses were
collected, resulting in a 59.8% effective response rate.

5. Results and Discussions

5.1. Demographics
The responses comprised of 36.2% male and 63.6% female. There were 0.6% of the respondents in the
age group of 20 or below, 29.8% in 21 to 30, 53.0% in 31 to 40, 16.0% in 41 to 50 and 0.3% in 51 or
above. 5.5% of the respondent’s educational background was high school or equivalent, 23.5% was
technical school, 57.7 % was college or university, and 13.0% was master degree or above. There were
23.5% respondents holding management positions and 76.5% were office staff. 21.3% of the
respondents had worked in the current companies for less than 2 years, 18.8% for 2 more to 5 years,
31.5% for 5 more to 10 years, 21.5% for 10 more to 15 years and 6.9% for more than 15 years. The
main jobs of the respondents included various areas as follows: 13.3% in underwriting, 23.5% in claim,
3.3% in marketing, 16.9% in customer service, 6.4% in policy service, 4.4% in premium collecting and
bookkeeping, 3.9% in training, 7.2% in IT, 4.4% in accounting, 0.8 in actuarial and product
development, 3.6% in human resource, 5.8% in legal affairs, 10.8% in registrar and 13.3% in others.
The demographic information of the respondents in the main survey is presented in Table 1.
International Research Journal of Finance and Economics - Issue 48 (2010) 122
Table 1: Demographic Information of Main Survey

Seniority Demographic Characteristics Frequency Percentage (%)

(1) Less than 2 years 77 21.3
(2) 2+ to 5 years 68 18.8
(3) 5+ to 10 years 114 31.5
(4) 10+ to 15 years 78 21.5
(5) More than 15 years 25 6.9
2. Gender:
(1) Male 131 36.2
(2) Female 229 63.6
Age
(1) 20 or below 2 0.6
(2) 21-30 108 29.8
(3) 31-40 192 53.0
(4) 41-50 58 16.0
(5) 51 or above 1 0.3
Position:
(1) Vice President or above 1 0.3
(2) Assistant Vice President 3 0.8
(3) Office Director 3 0.8
(4) Department Manager 8 2.2
(5) Associate Manager 31 8.6
(6) Assistant Manager 18 5.0
(7) Division Chief 4 1.1
(8) Supervisor 17 4.7
(9) Staff 277 76.5
Job Classification
(1) Underwriting 48 13.3
(2) Claim 85 23.5
(3) Marketing 12 3.3
(4) Customer Service 61 16.9
(5) Policy Service (Policy Alteration, Loan, Surrender, etc.) 23 6.4
(6) Premium (Premium Collecting and Bookkeeping) 16 4.4
(7) Training 14 3.9
(8) Information Technology 26 7.2
(9) Accounting, Financial and Investment 16 4.4
(10) Actuarial and Product Development 3 0.8
(11) Human Resource 13 3.6
(12) Legal Affairs 21 5.8
(13) Registrar 39 10.8
(14) Others 48 13.3
Education
(1) High School or equivalent 20 5.5
(2) Technical School 85 23.5
(3) College or University 209 57.7
(4) Master Degree or above 47 13.0

5.2. The Results Regarding Perceived Usefulness

Our empirical study identified the importance of theses variables as percentage of respondents agreeing
with the respective variables being important. Table 2 presents the respondents’ opinions regarding
how they think KM will increase their job performance. The column of Table 2 is interpreted as
follows. For example, under Perceived Usefulness, 93% of the respondents agreed that KM would
enhance their “work and service quality” (labeled as PU1). The findings revealed that more than 90 %
of the respondents agreed that KM would help them in improving work/service quality, saving time,
being more efficient and effective, increasing convenience and flexibility, as well as decreasing the
duplicate work. However, it was interesting to see that fewer respondents believed that adopting and
123 International Research Journal of Finance and Economics - Issue 48 (2010)

applying KM would let them have promotion or raise. It implied that the responding employees were
not well motivated to give efforts on KM and there were in lack of encouragement, e.g., promoting the
employees who were willing to share experiences with others, and giving financial support for those
people who contributed in implementing KM in the company.

Table 2: Results Summary of Perceived Usefulness on KM

Variables Measurement items Percentage of respondents

PU1 Work and service quality 93
PU2 Work quantity 87
PU3 Time saving 90
PU4 Efficiency 92
PU5 Making it easier to work 85
PU6 Convenience and flexibility 93
PU7 Meeting the needs at work 87
PU8 Effectiveness 92
PU9 Professional competency 88
PU10 Reducing the mistakes 85
PU11 Reducing the duplicate work 91
PU12 Making it easier to learn 88
PU13 Promotion/ Raise 63

5.3. The Results Regarding Complexity

The results regarding the complexity involved in KM is shown in Table 3. From this empirical study, it
was found that more than 80 % of the responding employees perceived that the information systems for
KM were not friendly to use, it took too much time to find the information need, the message was not
clear, there was not instant assistance available when they had problems in applying KM, and KM was
not easy to operate in practice. Theses findings indicated that there still remained several impediments
in adopting and applying KM in the life insurance companies. To successfully implementing KM, the
life insurance enterprises should recognize these obstacles and solve the associated problems.

Table 3: Results Summary of Complexity Involved in KM

Variables Measurement items Percentage of respondents

CM1 Not friendly to use 82
CM2 Taking too much time 84
CM3 Not simple, clear and short enough 81
CM4 No assistance in time 83
CM5 Lack of accessibility 83
CM6 Not easy in the practical operation 82

5.4. The Results Regarding Subjective Norm of KM

Table 4 presents the results on the respondents’ thoughts concerning the subjective norm of adopting
and applying KM in their organizations. It was interesting to know that the employees cared more
about the supervisors’ and senior management’s ideas and recognitions about KM, rather than peer
pressure or whether other colleagues had adopted KM. It implied that in having KM into place in
theses life insurance companies, support and requirement from the management still played an
important role.
International Research Journal of Finance and Economics - Issue 48 (2010) 124
Table 4: Results Summary of Subjective Norm of KM

Variables Measurement items Percentage of respondents

SN1 Peer pressure 64
SN2 Co-workers’ adoption and comments 66
SN3 Supervisor 78
SN4 Senior management 82
SN5 Opinion leader 75
SN6 Requirement of company 77
SN7 Prestige/profile/status 70

5.5. The Results Regarding Attitude toward KM Adoption

Table 5 shows the respondents’ attitudes toward adopting KM. The results indicated that, although a
high percentage (92%) of respondents agreed that KM was a good idea, they put less conformity on the
statement that KM made work more interesting and that they liked KM. Only 70 % of them agreed that
KM was fun.

Table 5: Results Summary of Attitude toward KM Adoption

Variables Measurement items Percentage of respondents

AT1 Knowledge management is a good idea. 92
AT2 Knowledge management makes work more interesting. 79
AT3 Knowledge management is fun. 70
AT4 I like knowledge management. 80

5.6. The Results Regarding KM Activities

Table 6: Results Summary of KM Activities

Variables Measurement items Percentage of respondents

KP1 Gathering knowledge 78
KP2 Identifying Knowledge 78
KP3 Organizing knowledge 76
KP4 Sharing knowledge 80
KP5 Converting knowledge 81
KP6 Using knowledge 84
KP7 Having KM a part of ordinary jobs 77

Table 6 reflects that the extent of employees’ conducting KM activities in their companies. It
was observed that the respondents were involved more in sharing knowledge, converting knowledge
and using knowledge, but slightly less in gathering, identifying, organizing knowledge, and having KM
become a part of their ordinary jobs. It showed the real situations in Taiwan’s life insurance companies
that employees were willing to share their ideas and experiences within and across departments and
then more colleagues could benefit from using the knowledge. However, the task of gathering
knowledge from individuals, identifying what kind of knowledge was useful or redundant, and
organizing the collected knowledge seemed a little more bothersome and thus not so popular among
the employees.

6. Concluding Remarks and Future Research Directions

To investigate the adoption and applications of KM in the life insurance industry, we extensively
reviewed the relevant theories along with previous studies and conducted empirical studies among
Taiwan’ life insurance enterprises. This study enlightens our understating of the employees’
perceptions on KM, their attitudes toward KM adoption and their KM activities in practice. The
125 International Research Journal of Finance and Economics - Issue 48 (2010)

findings also help life insurance enterprises, particularly those embarking on KM in Taiwan, realize
that they should well promote KM projects, solve the possible problems involved in employing KM,
and generate the subjective norm in which employees are encouraged and motivated to adopt and apply
KM.
This study can be extended through further examination of the casual relationships among the
perceptive factors, employees’ attitudes and their KM activities which are important in implementing
KM in these organizations. The researchers attempt to further probe into the phenomenon of KM
adoption and diffusion in the future by utilizing structural equation modeling techniques. Besides, the
external factors which would influence the employees’ perceptions on KM and the effects of KM
activities on the organizational performance are also worthwhile more investigation. Lastly, the
conclusions reached in the current study were not of universal applications as the research was
conducted in the context of Taiwan’ life insurance business. The results of this research might be
generalized through adjustment and testing in other countries or different financial industries.

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