Efficiency and quality of services have been the urgent requirements for the public organization. They have stimulated the practitioners and researchers of the public organization to study the improvement of internal resources so that public organization can improve performance (Moynihan, 2006). However, the public organization’s expected performance has yet still to come (Barzelay, 2001). One of the internal capability improvement of the public organization is the application of Knowledge Management (KM) (Sabherwal & Sabherwat, 2005) to build knowledge and superior skills on the value chain in creating valuable service (Smith and McKeen, 2005).

 The one of the core elements of KM is best practices which should be developed by public organization (Szulanski, 2003; Probst and Romhardt, 1999). KM programs provide the way for transfer or dissemination of best practices among units of a company. The approach of KM has been researched and proven to be effective to enhance the quality of public service (Newell, Edelman, Scarbrough, Swan, & Bresnen (2003). Best Practices embrace “doing things superiorly” (de Vries, 2006). This study attempts to identify the antecedents (influencing sources) which improve the effectiveness of best practices sharing in the context of KM implementation in PT. PLN (Persero) in Indonesia.

  In the private sector, the rapid business growth through fast market expansion, mainly relies on transfer, replication, re-use, and innovation of best practices such as in McDonald’s and Starbucks (Winter and Szulanski, 2001a). This best practices approach for company performance is in line with the Resource-Based View, in that internal capability like best practices are critical for performance improvement and source of competitive advantage (Barney, 1991).

  This research has focused on the dissemination, replication, and re-use of best practices in the units of PT. PLN (Persero) which is expected to increase performance of its electricity distribution service to the public. One of the main characteristics of KM is every employee is considered belonging to“community of practices” (Kogut and Zanders, 1993), to create “collective learning”, forming as the base of company’s best practices sharing (Barakonyi, 2000). The application of KM in organization contains paradox (Benscik and Bognair, 2007). On the one hand, KM is a specialized or functional activity; on the other hand, it is “companywide” for best practices sharing (Benscik and Bognair, 2007). Such paradox has implication in organizing KM programs in a company.

  This study addresses hypotheses as follows : (1) Influence of knowledge characteristics (tacit knowledge and explicit knowledge) on the best practices sharing; (2) Influence of collaboration (trust and cooperation) on the best practices sharing; (3) Influence of adaptation (replication and routine) on the best practices sharing; (4) Support of KM leadership improves the influence of best practices sharing on the company’s performance, (5). Transfer implementation (process and control) continually improves the influence of best practices sharing on the company’s performance, in terms of added value to direct stakeholders (customers, employees, and company), of the re-use of knowledge repeatedly in the workplace, as well as avoiding knowledge drain.

 Survey has been done within PT. PLN (Persero) with sampling of 190 Manager Units of PLN, consisting Sector Branches, Service Areas and Networks, Distribution Management Areas, others on the same level. The respondents are mostly the unit managers who are in charge of branches, sectors, and others on the same level. Data collected are 144 questionnaires with the response rate of 78.42%. The statistic method or analysis uses Confirmating Factor Analysis (CFA) on the measurement model. The hypothesis examination uses SEM, while data are processed by lisrel software 8.80 for CFA and SEM as well as SPSS 16.0 for descriptive statistics.

 The results are that (1) Explicit Knowledge in the company improves the effectiveness of best practices sharing; (2) Cooperation in the company environment improves the effectiveness of best practices sharing; (3) The ability to replicate the best practices in the company environment improves the effectiveness of best practices sharing; and (4) the best practices sharing significantly improves the company’s performance. The weakness of this research is that it does not include incentive influence of effectiveness of the KM implementation, the influence of IT infrastructure on the implementation of best practices sharing, the influence of top management leadership on knowledge accumulation. Besides, this research does not contain knowledge transfer practices on other state-owned-companies.

 The theoretical contribution of this research clarifies the integration of KM study with strategic management, especially in creating unique internal capabilities (Barney, 1991; Teece, Pisano, & Shuen, 1997). For managerial contribution, this research clarifies the antecedent condition which should be prepared to build KM –based organization (Kogut and Zanders, 1993), so that sharing of best practices can run well. By having high capability of replication and supported by internal cooperation, a company can form Communities of Practices, to ultimately optimize the best practices sharing through out the company. Suggestion for future research is to have a comparative study among the State Owned Companies (BUMN) in Indonesia to generalize theory development and practice of best practices accumulation, to enhance the performance of public company.
Download

Keywords:
Knowledge Management, Best Practices, Strategic Management, Public Organization, Company’s Performance, Replication, Explicit knowledge and Communities of Practices.