The Relationship between Knowledge Management and Production Quality in Manufacturing Companies in Malaysia: The Mediating Effect of Innovation

Introduction

The relationship between knowledge management and quality management in manufacturing firms has long been a debatable issue with no consensus to conceptualise this relation. Hung et al. (2010) for instance, showed that quality management mediates the relationship between knowledge management and innovation. On the contrary, Molina et al. (2007) considered knowledge transfer as mediator between quality management and performance. However, according to Honarpour (2012), the methodological aspect of the mediator concept would lead us to assume that not only does quality management generate knowledge management but knowledge management generates quality management as well. While some researchers consider knowledge management a facilitator of quality management (Barber et al., 2006; Hung, et al., 2010; Stewart and Waddell, 2008) others consider quality management as an antecedent for knowledge management (Choo et al., 2007; Colurcio, 2009; Jayawarna and Holt, 2009; Lin and Wu, 2005; Molina et al., 2007). These diverse interrelations highlight the importance of looking at this relation more closely. In practice however, a study by Morris and Haigh (1996) indicate that only 20 percent of firms have achieved success in their quality management programmes without finding any difficulty, while the majority (the remaining 80 percent) found barriers and difficulties in the process. These barriers that organizations face dealing with quality management are mainly because of knowledge management practices. The objective of this paper therefore is to investigate this relationship in the Malaysia’s manufacturing firms. The paper further investigates what mediating effect could innovation impose on this relationship. While many previous studies have already investigated this relation from various perspectives and contexts, there still exists little evidence on how this relationship operates in the Malaysian context.

To begin with, the relationship between quality management and knowledge management in the literature is conceptualized in various ways. From one perspective for instance, knowledge management is determined as an enabler for quality management. Stewart and Waddell (2008) argued that widening the concept of quality, from product specification to rapid response to customer needs, would clear the relationship between knowledge management and quality management. Molina et al. (2007) introduced a conceptual framework based on quality programs and knowledge management. Based on their study, quality programs are effective enablers of knowledge management. Jayawarna and Holt (2009) analysed the relationship between knowledge creation and transformation in the R&D context. Based on their research, quality management practices improve knowledge creation and transformation. In another empirical study conducted by Molina et al. (2007), the relationship between quality management practices and knowledge transfer is examined and they indicated that there is a significant and positive association between quality management and knowledge transfer.