Management innovation and firm performance: the mediating effects of tacit and explicit knowledge

Abstract

This paper examines the role of tacit and explicit knowledge in translating management innovation into firm performance in Japanese companies. While past research has been inconsistent on the role of management innovation on firm performance, this research considers how management innovation in organizations can promote tacit and/or explicit knowledge creation, and whether this leads to higher firm performance.This research uses a questionnaire survey of employees of Japanese firms, and applies conditional process analysis. There was no direct effect of management innovation onto firm performance, and that instead, both tacit and explicit knowledge fully mediated the relationship between management innovation and firm performance.While management innovation programs by themselves did not directly increase firm performance, the alignment of these programs with knowledge management initiatives enhanced performance. This highlights the need for management innovation that first considers the type of knowledge needed for enhanced performance. Previous research did not consider the role of knowledge as a means to translate management innovation into firm performance. This paper uncovers the mediating role of knowledge, potentially elucidating past inconclusive results.

Social capital, knowledge quality, knowledge sharing, and innovation capability: An empirical study of the Indian pharmaceutical sector

“…In the context of pharmaceutical industries, explicit knowledge, which can be codified and easily articulated through a knowledge repository (Currie & Kerrin, 2003), can aid an organization to develop innovation capability. Although explicit knowledge also improves innovation capability due to the structured and codified nature, it can be easily imitated and is, therefore, a less sustainable source of innovation and competitive advantage (Hau & Evangelista, 2007;Magnier-Watanabe & Benton, 2017). We propose this to be the reason for its significant but a weaker association with the innovation capability of an organization.…”

“…It is easy to identify, store, and retrieve (Wellman, 2009) and can be converted in value through efficient implementation, which can, in turn, improve the efficiency of the organization (Smedlund, 2008). Hau & Evangelista, 2007;Magnier-Watanabe & Benton, 2017. Although prior researches in innovation management have indicated that explicit knowledge plays a lesser important role in innovation as compared with their tacit counterpart, due to the fact that it can be imitated with relative ease, it still forms an important component of innovation (du Plessis, 2007;Hau & Evangelista, 2007;Magnier-Watanabe & Benton, 2017).…”

“…Hau & Evangelista, 2007;Magnier-Watanabe & Benton, 2017. Although prior researches in innovation management have indicated that explicit knowledge plays a lesser important role in innovation as compared with their tacit counterpart, due to the fact that it can be imitated with relative ease, it still forms an important component of innovation (du Plessis, 2007;Hau & Evangelista, 2007;Magnier-Watanabe & Benton, 2017). du Plessis (2007), in her research on the role of knowledge management in innovation, has argued that there are certain projects where explicit knowledge holds a position of equal importance in innovationfor example, projects concerning developed science.…”

Impact of Open Innovation Communities on Enterprise Innovation Performance: A System Dynamics Perspective

“…As a dynamic capability, knowledge management ability helps enterprises to continuously update specific resources and enhance certain capabilities, indirectly affecting their innovation performance by influencing their strategic configuration [67]. The companies' knowledge management capabilities affect their problem-solving mechanism and speed of resolution [68]. Therefore, knowledge management capabilities help companies perceive market changes, collect user and industry information, improve the efficiency of the knowledge value realization process, and achieve technological and product innovation, all of which positively impacts innovation performance [34].…”

Determining performance criteria of railway market: a case study

“…The geographic proximity and the relationships between competing and cooperating peers provide firms with cost advantages, access to less available resources, technological externalities, as well as more intense knowledge transfer (Popper 2008). While cluster companies' management innovation programs have been found that they did not directly increase companies' competitiveness performance, the alignment of these programs with knowledge management initiatives enhance performance (Magnier et al, 2017). In another words, networking and location effects in clusters have been found to develop the innovativeness of firms in these clusters (Tseng and Cheng, 2009).…”