Management of Knowledge, Innovation and Performance in SMEs
07 Jun 2016-Interdisciplinary Journal of Information, Knowledge, and Management (Informing Science Institute)-Vol. 11, pp 141-176
TL;DR: In this article, the authors analyze the relationship between knowledge management and innovation in SMEs in the region of Murcia, Spain and find that knowledge management can help SMEs to professionally develop employees, improve innovation processes, grow sales, satisfy customers and thus achieve organizational success.
Abstract: Introduction The era of knowledge plays an essential role in the economic growth and development of all enterprises (Foray, 2004; Mosconi & Roy, 2013). With the arrival of globalization, knowledge has become an intangible resource generator of permanent competitive advantage (Ikujiro & Hiroshi, 2013; Tunc Bozbura, 2007) and contributes to the generation of intellectual capital and to the economic activities of organizations (Kristandl & Bontis, 2007). In these times of constant motion, small and medium-sized enterprises (SMEs) require the extraction of knowledge from both domestic sources and foreign sources to achieve greater participation in the markets, foster innovation, and improve performance (Gold, Malhotra, & Segars, 2001; Morgan & Berthon, 2008). Knowledge management (KM) is a comprehensive approach that includes capture, receipt, and transfer of information in a company that considers the policies, procedures, knowledge, and experience of employees (Duhon, 1998). In addition, technology systems influence the behavior of employees and strengthen a culture based on the use and transfer of information (Davenport, 1994). KM is a business practice that integrates essential strategies, policies, techniques, and procedures (Davenport, 2013; Lavergne & Earl, 2006). The alignment of corporate strategy with KM is vital for adding value and achieving results (Chuang, 2004; M. H. Zack & Singh, 2010). KM influences business systems by increasing profitability, creating a harmonious atmosphere among employees, and ensuring businesses' sustainability and competitiveness (Darvish, Mohammadi, & Afsharpour, 2012; Darvish & Nazari, 2013). However, KM is not sufficiently widespread in SMEs, mainly due to the lack of strategic planning, lack of financial resources, distaste to change cultural, uncertainty regarding benefits, and technological immaturity, which are typical in these organizations (Edvardsson & Durst, 2013; Yew Wong, 2005). A reasonable number of empirical studies have analyzed the impact of KM and innovation in SMEs (Constantinescu, 2009; C. Yu, Yu-Fang, & Yu-Cheh, 2013). However, the relationship between innovation and performance is still a wide field for exploration (Price, Stoica, & Boncella, 2013; Vaccaro, Parente, & Veloso, 2010). Works on KM have placed minimal emphasis on the benefits generated in SMEs; the majority of research focuses on large organizations (Darroch, 2005; Roxas, Battisti, & Deakins, 2014). In addition, minimal understanding of how companies create, transfer, and use knowledge has led to difficulty in transforming knowledge into a competitive advantage (C. Lin, Wu, & Yen, 2012; Perrin, Vidal, & McGill, 2006). The difficulty of measuring KM in SMEs provides a reasonable explanation for the scarcity of empirical studies in this developing discipline (Becerra-Fernandez & Sabherwal, 2014; Choi, Poon, & Davis, 2008). By the great influence of the KM in the progress and development of SMEs, it is important to develop this type of study more regularly (Imran, 2014; Vaccaro et al., 2010). The objective of this work is to empirically analyze the relationships between KM, innovation, and performance in SMEs in the region of Murcia, Spain. In the current competitive global environment, it is important to analyze the key factors that affect the development and growth of these companies. The research questions that we attempt to answer are as follows: 1. Does knowledge management influence innovation activities in SMEs? 2. Does business innovation exert any influence on SME performance? Literature reveals that KM can help SMEs to professionally develop employees, improve innovation processes, grow sales, satisfy customers and thus achieve organizational success (Edvardsson & Durst, 2013; Lopez-Nicolas & Merono-Cerdan, 2011; Madrid-Guijarro, Garcia, & Van Auken, 2009). …
Citations
More filters
Book•
01 Jan 1995
TL;DR: In this article, Nonaka and Takeuchi argue that Japanese firms are successful precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies, and they reveal how Japanese companies translate tacit to explicit knowledge.
Abstract: How has Japan become a major economic power, a world leader in the automotive and electronics industries? What is the secret of their success? The consensus has been that, though the Japanese are not particularly innovative, they are exceptionally skilful at imitation, at improving products that already exist. But now two leading Japanese business experts, Ikujiro Nonaka and Hiro Takeuchi, turn this conventional wisdom on its head: Japanese firms are successful, they contend, precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies. Examining case studies drawn from such firms as Honda, Canon, Matsushita, NEC, 3M, GE, and the U.S. Marines, this book reveals how Japanese companies translate tacit to explicit knowledge and use it to produce new processes, products, and services.
7,448 citations
01 Jan 2014
TL;DR: In this paper, a revision of the previous edition article by Robert Visser, volume 4, pp 551-560, is presented. But this article is based on the previous version of the article.
Abstract: This article is a revision of the previous edition article by Robert Visser, volume 4, pp 551–560, © 2005, Elsevier Inc.
766 citations
01 Jan 2012
TL;DR: The results show that HRM and ICT practices for managing knowledge are quite strongly correlated and have a statistically significant influence on both financial performance and competitiveness of the firm.
Abstract: Purpose – While nowadays an extensive literature promoting knowledge management (KM) exists,
there is a worrying shortage of empirical studies demonstrating an actual connection between KM
activities and organizational outcomes. To bridge this gap, this paper aims to examine the link between
KM practices, firm competitiveness and economic performance.
Design/methodology/approach – This paper proposes a framework of KM practices consisting of
human resource management (HRM) and information communication technology (ICT). These both are
hypothesized to impact competitiveness and economic performance of the firm. Hypotheses are then
tested with structural equation modeling by using a survey dataset of 234 companies.
Findings – The results show that HRM and ICT practices for managing knowledge are quite strongly
correlated and have a statistically significant influence on both financial performance and
competitiveness of the firm. The findings also indicate that ICT practices improve financial
performance only when they are coupled with HRM practices.
Research limitations/implications – The data are limited to companies from Finland, Russia and
China.
Practical implications – The paper contributes to managerial practice by pointing out the importance
of utilizing a combination of both social and technical means for KM and illustrating that they do matter
for the company bottom line.
Originality/value – This paper contributes to the literature on knowledge-based organizing by
empirically analyzing the performance impact of various areas of KM. It thereby tests the proposition put
forth in many previous theoretical and case-based studies that KM promotes high organizational
performance. It also addresses the interaction of social and technical KM practices in producing
organizational outcomes.
372 citations
80 citations
30 Dec 2020
TL;DR: In this paper, the authors analyzed the relationship between technological capability, open innovation, and eco-innovation in corporate performance, testing a structural equation model using SmartPLS in a sample of 684 small and medium-sized companies in Mexico.
Abstract: Currently, small and medium enterprises (SMEs) play a leading role in most of the world’s economies. For this reason, they seek technological competitiveness and improvement of their innovation activities. In this context, open innovation and eco-innovation are important elements to achieve these goals. With this background, the purpose of this paper is to analyze the relationship between technological capability, open innovation, and eco-innovation in corporate performance, testing a structural equation model using SmartPLS in a sample of 684 small and medium-sized companies in Mexico. The main results show that technological capability significantly influences open innovation and eco-innovation practices, not directly in corporate performance, but through open innovation or eco-innovation. Our results also confirm the positive effects that eco-innovation and open innovation have on SMEs’ corporate performance. These results have important implications in the literature on dynamic capabilities that have not been previously tested. For companies and decision-makers, it shows why these practices in small and medium-sized companies should be encouraged.
64 citations
References
More filters
TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.
46,648 citations
"Management of Knowledge, Innovation..." refers background in this paper
...In previous studies that analyzed performance linked to knowledge management, variables such as economic performance (J. Barney, 1991; J. B. Barney, 2001; Tanriverdi, 2006), market share (Chen & Huang, 2012; Ebrahimi & Sadeghi, 2013), and productivity (Hislop, 2013; Van Hemert, Nijkamp, & Masurel,…...
[...]
TL;DR: In this paper, the authors argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **
31,623 citations
"Management of Knowledge, Innovation..." refers background in this paper
...Schools of theories, such as that of W. M. Cohen and Levinthal (1990), have contributed to the study of the management of knowledge and the manner in which it is acquired to generate ideas and new products and to improve productivity in an organization (Robertson & Jacobson, 2011; Zahra & George,…...
[...]
...The literature indicates that the acquisition of external knowledge is one of the most basic corporate practices in the management of innovation (Arora et al., 2014; W. M. Cohen, 2010; W. M. Cohen & Levinthal, 1990)....
[...]
...From a strategic perspective, the internal resources of a company play a double role in innovation because they determine the possibility of use and external knowledge (W. M. Cohen, 2010; W. M. Cohen & Levinthal, 1990)....
[...]
...Literature and Hypothesis Development KM has its origins in a conceptual perspective based on theories developed by W. M. Cohen and Levinthal (1990) that involve the absorptive capacity of employees to be more innovative....
[...]
TL;DR: The dynamic capabilities framework as mentioned in this paper analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change, and suggests that private wealth creation in regimes of rapid technology change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm.
Abstract: The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
27,902 citations
Book•
01 Jan 2008
TL;DR: The Japanese companies, masters of manufacturing, have also been leaders in the creation, management, and use of knowledge-especially the tacit and often subjective insights, intuitions, and ideas of employees as discussed by the authors.
Abstract: Japanese companies, masters of manufacturing, have also been leaders in the creation, management, and use of knowledge-especially the tacit and often subjective insights, intuitions, and ideas of employees.
16,886 citations
"Management of Knowledge, Innovation..." refers background in this paper
...Theory and empirical studies suggest that companies should offer training to their employees to improve their skills to increase creativity and innovation (De Saá-Pérez et al., 2012; Nonaka, 2008; Schmitt, 2015)....
[...]
...Knowledge “based on the experience learned implicitly and internalized by individuals is known as tacit knowledge, and that which you learn in a rational manner and exteriorized form is known as explicit knowledge” (Nonaka, 2008)....
[...]
TL;DR: In this paper, the authors identify six categories of self-reports and discuss such problems as common method variance, the consistency motif, and social desirability, as well as statistical and post hoc remedies and some procedural methods for dealing with artifactual bias.
14,482 citations
"Management of Knowledge, Innovation..." refers methods in this paper
...To identify the existence of such bias, we used Harman’s single-factor test, as suggested by Podsakoff and Organ (1986) and Reio (2010)....
[...]