Impact of knowledge management on organizational performance. An application of structural equation modeling
| Pages | 510-530 |
| Published date | 11 November 2019 |
| DOI | https://doi.org/10.1108/VJIKMS-07-2018-0063 |
| Date | 11 November 2019 |
| Author | Ruchi Payal,Salma Ahmed,Roma Mitra Debnath |
| Subject Matter | Information & knowledge management,Knowledge management,Knowledge management systems |
Impact of knowledge management
on organizational performance
An application of structural equation modeling
Ruchi Payal
Christ University, Delhi NCR Campus, Ghaziabad, India
Salma Ahmed
Aligarh Muslim University Faculty of Management Studies and Research,
Aligarh, India, and
Roma Mitra Debnath
Department of Applied Statistics, Indian Institute of Public Administration,
New Delhi, India
Abstract
Purpose –The purposeof this paper is to explore the dynamic relationshipsamong the essential knowledge
management (KM) constructs, i.e. strategy, enablers and processes, and to establish their links to
organizationalperformance using a holistic integratedmodel.
Design/methodology/approach –The structuralequation modeling approach was used in the research
study. Theprimary data were collected from IT managers inIndian software firms.
Findings –The study successfully tested an integratedKM model in an Indian scenario. The study found
that the KM strategy, enablers and processes had a significant positiverelationship with the organizational
performance. An appropriately designed KM strategy significantly influenced the KM enablers and KM
process. KM enablers nurtured in an organization positively impacted the KM process. Furthermore, the
KM process partially mediated the relationship between the KM strategy and organizational performance,
and partiallymediated the relationship between KM enablers and organizationalperformance.
Originality/value –This study is one of the few to empiricallyestablish how the essential KM constructs
of strategy,enablers and processes together impact organizationalperformance.
Keywords Knowledge, Knowledge management, Organizational performance, Knowledge manage-
ment strategy, Knowledge management enablers, Knowledge management process
Paper type Research paper
1. Introduction
Knowledge is the most valuablestrategic asset for survival in today’s business environment
(Barao et al.,2017). In the modern environment, rapid changes are happening in global
marketplaces, customers’needs and technology. It is difficult for organizations to
comprehend and predict these frequent and complex changes. Due to increased employee
turnover, there is frequent knowledge loss. A faster pace of innovation and the need for
lifelong learning for employees have become competing requirements for organizations
(Venkitachalam and Willmott, 2015;Gamble and Blackwell, 2001). These changes are
challenging managers to predict potential outcomes and prescribe actions in this volatile,
uncertain, complex and ambiguous atmosphere. Such an environment requires
uninterrupted adaptation and transformation of organizations. Furthermore, management
of knowledge becomes critical to surviving in such environments (Venkitachalam and
VJIKMS
49,4
510
Received26 July 2018
Revised7 January 2019
23April 2019
Accepted26 June 2019
VINEJournal of Information and
KnowledgeManagement Systems
Vol.49 No. 4, 2019
pp. 510-530
© Emerald Publishing Limited
2059-5891
DOI 10.1108/VJIKMS-07-2018-0063
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2059-5891.htm
Willmott, 2017). The competence to acquire, create, share and apply knowledge enables
organizations to reinvent/innovate, and hence, is a vital skill for contemporary firms.
Knowledge is a vital asset that can offer competitive advantage to organizations (Barley
et al.,2018;Cerchione et al.,2016;Ferreira et al., 2015;Alavi and Leidner, 2001;Lee and Choi,
2003). It has become a requisite for managers to understand the role of KM and use it to
improve organizational performance (Bolisani and Handzic, 2015; Hsieh, 2007). Recently,
International Organization for Standard (ISO) recognized the importance of knowledge in
organizations and included it in ISO 9001:2015, where it places a responsibility on firms to
consider knowledgeas a critical resource (Jarvis and MacNee, 2011).
Recognizing the importance of knowledge as an essential factor for performance,
many organizations have allocated a budget for knowledge management (KM)
programs (Lee and Choi, 2003). Researchers have conducted research to support KM
initiatives. Previous research studies have investigated the links among the KM
strategy, KM enablers and KM processes with firm performance (Lee et al., 2012). For
example, Kim et al. (2014) studied the relationship between the KM strategy and
organizational performance and Martinez-Conesa et al. (2017) investigated the
influence of KM enablers on performance. Meanwhile, Manfredi Latilla et al. (2018)
explored the link between KM processes and organizational performance. However,
there is a lack of a comprehensive integrated KM model in the literature. It is not
precisely clear how different KM constructs, i.e. strategy, enablers and processes,
together influence firm performance. This indicates that more comprehensive
research on an integrated KM model encompassing these constructs is required.
During the literature review, we found a critical research gap in the KM literature in the
Indian context. The studies related to KM constructsare not sufficient in the Indian context.
A recent study by Gupta and Chopra (2018)also pointed to the dearth of KM literature in the
Indian sub-continent.A review of the literature indicatesthat empirical studies conducted in
India are mostly surveys of the level of KM implementation in Indian business
environments. For example, Kammani et al. (2013) found that KM facilitated software
development organizations to capture experiential learning of their employees, so that
knowledge lost due to employee turnover could be minimized. Singh and Soltani (2010)
explored the role of organizationalfactors and KM processes in the implementation of KM in
IT companies based in North India.However, there are very few studies that have explored
the KM strategy, enablers and processesand their links to organizational performance in the
Indian context.
This study responds to the present research needs by empirically testing a holistic,
integrated model depicting relationships among the KM strategy, KM enablers and KM
processes and organizational performance in Indian software companies. The specific
questions to be answeredthrough this research are given below:
RQ1. What are the critical KM constructsinfluencing organizational performance?
RQ2. What is the impact of KM constructs, i.e. the KM strategy, KM enablers and KM
processes, on organizationalperformance?
RQ3. What is the interrelationship among the KM strategy, KM enablers and KM
processes?
RQ4. Does the KM process play a mediating role between the KM strategy and
organizational performance, and between KM enablers and organizational
performance?
Impact of
knowledge
management
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