How Knowledge Management Influences Performance?: Evidences from Indian Manufacturing and Services Firms

How Knowledge Management Influences Performance?: Evidences from Indian Manufacturing and Services Firms

Himanshu Joshi (International Management Institute New Delhi, New Delhi, India) and Deepak Chawla (International Management Institute New Delhi, New Delhi, India)
Copyright: © 2019 |Pages: 22
DOI: 10.4018/IJKM.2019100104

Abstract

Prior research studies on knowledge management (KM) offer inconsistent support that it enhances firm performance. A majority of them discuss KM without incorporating the valuation of KM efforts. This article proposes a conceptual model comprised of six KM and two performance constructs. Performance is classified as financial and non-financial. Survey data from 313 Indian respondents is used to examine the influence of KM on firm performance. The results show that there is a strong, positive and significant link between the six KM constructs and organizational performance. Further, it is found that the influence of KM constructs on financial performance is indirect, that is, their influence is accomplished through the mediating variable organizational performance. The study provides evidence, firstly, through identifying important KM constructs and secondly by examining its influence on performance. It contributes to managerial practice by proposing an empirically validated KM model, which can guide KM practitioners in developing capabilities for enhancing organizational performance.
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2. Overview Of Literature Reviewed

2.1. Theoretical Background

There are various perspectives on how KM should be defined and measured. According to Jennex (2005), KM is an action discipline and knowledge application is essential in order to have an impact. The discipline of KM focuses on using knowledge derived from past experiences and applying it to improve the effectiveness of current and future decision-making.

Although KM impacts business outcomes, it is difficult to measure. Thus, appropriate proxies can be used to measure how well the management is managing its firm’s knowledge base (Soo et al., 2002). Three critical factors for KM emphasized by prior researchers are process, enablers and performance (Lee and Choi, 2003, Chang and Chuang, 2011).

The main focus of this research is to examine the relationship between KM process, enablers and firm performance. Previous research studies have researched the influence of KM factors on performance and suggested a number of tools and metrics.

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