The effects of knowledge management processes on service sector performance: evidence from Saudi Arabia

Abstract

This study examines the effect of Knowledge Management (KM) processes on organizational performance in Saudi Arabian service organizations. It focuses on knowledge creation, capture, sharing, and application, and examines their effects on quality, operational, and innovation performance. While the service sector can enhance operational efficiencies through effective KM implementation, the extent of this impact, particularly in terms of quality and operational performance in developing countries like Saudi Arabia, remains underexplored. The study uses a quantitative methodology, obtaining 605 valid responses from Saudi service sector managers through an online self-reported questionnaire. Structural equation modeling validates the research model and tests the hypotheses. Results indicate that knowledge sharing has a nonsignificant effect, while knowledge creation, capture, and application have substantial impacts. Specifically, knowledge application significantly improves operational performance, while knowledge creation influences quality and innovation performance. Organizations are advised to understand their KM processes’ structure to effectively implement and leverage their impact on performance. Emphasizing knowledge sharing through personalized communication channels, employee development opportunities, and effective incentive systems is recommended to sustain engagement and motivation. Furthermore, prioritizing KM tools and technology for seamless knowledge flow across organizational levels and implementing collaborative tools can enhance innovative capabilities, adaptability, and competitive advantages.