The impact of knowledge management practices on organizational performance

Abstract

Purpose – The purpose of this paper is to present a holistic approach regarding evaluation of knowledge management (KM) practices on organizational performance. The effects of seven critical success factors (CSFs), namely leadership role, organizational culture, KM strategy, processes and activities, training and education, information technology, and motivation and rewarding system, on organizational performance in the framework of four perspectives of balance scored card (BSC) approach were surveyed. Design/methodology/approach – The research hypotheses were raised based on the four perspectives of this approach, namely, growth and learning, internal processes, customer and financial. By literature review, CSFs of KM and organizational performance along with their items were identified in the framework of BSC’s perspectives. Based on these constructs and their items an instrument was designed and distributed among managers and employees of the subsidiary firms of Iran National Petrochemical Company (INPC). Reliability of the instrument was calculated by Chronbach’s α for the two sections of the instrument i.e. KM practices and organizational performance. Also, using factor analysis the construct validity of the questionnaire was approved. Finally, based on the hypotheses of the study and using structural equation modeling the impacts of KM practices on organizational performance were investigated. Findings – The results revealed that KM practices positively and meaningfully (though weak) impact overall organizational performance. This impact is significant only regarding growth and learning dimension and on the other dimensions is insignificant. Also, as customer and financial constructs were loaded on one factor based on the entity of their indicators we considered these two constructs as stakeholders construct. In addition, among the above mentioned seven CSFs, motivation and rewarding system obtained the lowest rank among the survey organizations. Research limitations/implications – The sample is restricted to only three companies, so gathering data from various parts of Iran including both manufacturing and service industries could increase the generalizability of the results obtained. Also, as in this study the data gathered were cross-sectional, a longitudinal study could help gain deeper understanding of the cause-and-effect relationship among the variables. Originality/value – The most significant gap in the literature is the lack of enough application of statistical and comprehensive methods like BSC that KM makes a difference to organizational performance. This study contributes to the field of KM by empirically investigating the impact of KM practices on various measures of organizational performance in order to prove the suitability of a comprehensive approach like BSC.

The Impact of Knowledge Management on Organizational Performance: An Empirical Study of Kuwait University

“…The mean score for knowledge acquisition, as shown in Table 3, was (3.74) which reflect a strong positive correlation at a (.000) statistically significant level, as Table 4 indicates which supports the hypothesis. This results are similar to similar research results which revealed that KM practices positively and meaningfully impact overall organizational performance (Valmohammadi and Ahmadi, 2015;Akpotu and Lebari, 2014;Alnaweigah, 2013;Ababneh, 2008).…”

Measuring Knowledge Management Performance in Organizations: An Integrative Framework of Balanced Scorecard and Fuzzy Evaluation

“…on the four outcomes of BSC and finds that knowledge sharing can be used to predict the performance of internal processes and knowledge absorption can indicate and improve customer satisfaction levels. Valmohammadi and Ahmadi [30] study the impact of KM practices on organizational performances through a BSC approach and demonstrate that the impact is significant only on the dimension of growth and learning and insignificant on the other three dimensions of BSC outcomes. Combining the analytic network process (ANP) with a BSC, Hu et al [31] propose a framework to evaluate the performance of knowledge assets via the value of three indicators: labor, technology, and utilization.…”

Determinants of Tax Haven: Overview of Past Studies

“…Also, the researcher focused more on selecting articles that are very recent, thereby ignoring earlier studies which may carry information that is very vital for the study. Therefore, the researcher acknowledges these limitations by cautiously forming interpretations and conclusions that will not suggest a strong claim (Valmohammadi, & Ahmadi, 2015).…”