The relationship between knowledge management innovation and firm performance

the relationship between knowledge management innovation and firm performance

Marqués and Simon () examine the relationship between knowledge The positive link between knowledge management and firm performance is also. Keywords: Knowledge management, Innovation, Firm performance, Iranian industries . The Relationship Between KM Strategies And Firm Performance. in the relationship between knowledge management and business .. and process innovations on firms' performance in manufacturing sector.

The concepts of KM are relatively new to the Iranian Industries.

the relationship between knowledge management innovation and firm performance

Akhavan et al, 2. Previous Research Supporting Knowledge Management Smith pointed out that KM creates a new working environment where knowledge and experience can easily be shared as well as enables information and knowledge to reveal and flow to the right people at the right time so they can act more efficiently and effectively. For a deeper understanding of the knowledge management processes, a try to express the hidden meaning of data, information and knowledge is necessary.

Data means a set of discrete and objective facts concerning events. Therefore, they can be construed as a structured record of transactions within an organization. Information is data with attributes of relevance and purpose, usually having the format of a document or visual or audible message. Knowledge is linked to the capacity for action.

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At the same time, by the comparison of different definitions of knowledge management the following aspects of high relevance are resulted during KM adoption. Exploitation of existing knowledge is creation of new knowledge, process orientation, goal orientation, value orientation, improvement orientation, and innovation orientation.

This paper focused on different knowledge management strategies and their impact on innovation through case analysis Akhavan et al, Penrose mentioned that in general equilibrium theory resources were considered to be homogeneous, information perfectly available and evenly distributed, profit maximization central and equilibrium level of output guided production decisions.

There are two resources: Either people dependent human capital or people independent or include organizational capital culture, norms, routines and databasestechnical capital patents and relational capital.

Penrose viewing knowledge management is to consider it as a coordinating mechanism that enables resources to be converted into capabilities Darroch, Chong et al, pointed out that the globalization of business, shift from production-based to knowledge-based economy growth of ICT, the strive to become learning organizations and the emergence of knowledge workers have made KM practice a must to they across all types of levels of firms.

They claimed that the analysis of critical success factors provide an important meaning to KM through the identification of core processes that are critical to successful KM implementation.

the relationship between knowledge management innovation and firm performance

Salleh et al, suggested that a KM programmed needs to identify critical performance indicators of success factors to gauge its performance. The knowledge-based view of the firm: Implications for management practice. Long Range Planning, 30 3— A knowledge management model for SMEs in the knowledge-based economy. A strategy—based process for implementing knowledge management: Entrepreneurial orientation and innovation performance: The mediating role of knowledge management. Asian Journal of Business Management, 3 4— Journal of Contemporary Research in Business, 3 2— A dynamic theory of organizational knowledge creation.

Organization Science, 5 114— Critical entrepreneur knowledge dimensions for the SME performance. Industrial Management and Data Systems, 9— Entrepreneurship, knowledge and innovation: Shaping the new organization. Few types of research have adopted organizational innovation to identify the effect on firm performance among them Damanpour and Evan explored that adoption of administrative and technological innovations are more important for the organization to improve their performance level.

Johne and Davies suggested that marketing innovation is given a decisive importance for the firms to increase their sales and enhance the profitability.

Innovation activities benefited for firms to augmented firm performance in different aspect. Hence we hypothesized that,H2 Innovation has positive impact on innovation performance.

Knowledge management, innovation and firm performance - Semantic Scholar

H2b Process innovation has positive impact on innovation performance. H2c Organizational innovation has positive impact on innovation performance. H2d Marketing innovation has positive impact on innovation performance. Innovation performance and market performance Market performance can be derived as the extent to which firms gain market-related outcomes than their rivals with respect to customer satisfaction, new customer acquisition, loyalty etc.

Marketing concepts basically suggested that superior Judgmental performance Quality, customer satisfaction, employee satisfaction is the perquisite for superior performance of the market and financial Subjective performance of the company. Innovation performance can facilitate firms to generate market performance in numerous ways through helping to identify technological possibilities with improving product and service quality and superior value product to the customer can help to gain new customers.

Innovation performance is firstly affiliated with the non-financial aspects of corporate performance, for instance, customer facets, satisfaction and afterward it accelerated the higher financial performance Gunday et al.

Wei and Morgan were identified that innovation performance can lead sustainable competitive advantage through creating superior value to customer immensely which can turn greater market performance and profitability.

Following prior findings and rationale, we hypothesized thatH3 Innovation performance has positive impact on the market performance. On the other hand, Karabulut explained greater the market share, return on investment which resulted in greater the profit margin.

Knowledge management, innovation and firm performance

Reichheld and Markey stressed that customer satisfaction and loyalty drive firms for the higher profitability and revenue growth.

Therefore we hypothesized that,H4 Market performance has positive impact on the financial performance. Methodology This research was conducted in the insurance industry because of the insurance industry is mature and knowledge base industry. Innovative solutions are absolutely essential for insurance players to remain in the competitive business environment Deloitte, Insurance business can be categorized as life and non-life business and insurance products highly involve with intangible risk in long term and short term.

Journal of Knowledge Management Practice,

Many insurance companies facing challenges due to highly increasing customer expectation toward personalized product and services, advanced technological improvement and macro shift of the economy Deloitte, and industry facing disruption productive and innovative competitors from both inside and outside of the industry. Therefore given to the importance of innovation in insurance industry, research was conducted in insurance industry in Sri Lanka.

Therefore measurement of innovation activities should focus on the technological dimensions well as organizational dimensions.

the relationship between knowledge management innovation and firm performance

But among other things we are trying to change the stigma. As we mentioned above conceptual framework of the study was used four dimensions for measure the innovation activities in the insurance companies. These four dimensions are insurance product innovation, process innovation, marketing innovation and organizational innovation.

In the end, four indicators were generated to measure the innovation activities in insurance companies.

the relationship between knowledge management innovation and firm performance

In this research, a similar approach of Akman and Yilmaz, is followed in order to evaluate the innovation capability, adopt three questions contain main characters including organizational culture, characteristics of internal process. Respondents were answered by using each scale 5 point scale, 1 — strongly disagree, 2 — disagree, 3 — neither agree nor disagree, 4 — agree, 5 — strongly agree.

Particularly three different type of performance measures were employed to measure the organizational performance. Innovation performances measurements consist with four criteria have been adopted from Cronin and Taylor and Rothkopf and Wald In the end, six indicators were generated to measure financial and market performance including return on sales, overall profitability, and return on investment, market share, total sales, and customer satisfaction.

The six indicators have been adopted based on the existing literature mainly by research of Narver and Slater and Matear et al.

the relationship between knowledge management innovation and firm performance