Knowledge Management and Sustainable Firms Growth: An Evidence from SMEs Sector of Pakistan

  • Iftikhar Hussain Associate Professor and Dean Faculty of Computing & Engineering, University of Kotli Azad Jammu and Kashmir.
  • Ghulam Mujtaba Chaudhary Assistant Professor, Department of Business Administration, University of Kotli Azad Jammu and Kashmir.
  • Adeel Arshad Lecturer, Department of Business Administration, University of Kotli Azad Jammu and Kashmir.
  • Sabahat Akram Associate Professor and Treasurer, University of Kotli Azad Jammu and Kashmir.
Keywords: Sustainable firms’ growth, Innovation, Knowledge management, Product, Process, SMEs.

Abstract

The main drive for this research was to investigate the relationship between knowledge management (KM) and sustainable firms’ growth in SMEs sector of Pakistan. Moreover, the research examined the mediating role of product and process innovations on the association of knowledge management and sustainable firms’ growth. A self-administered survey was structured and employed to gather the data from 218 garments related SMEs. The study employed SEM to measure direct and indirect effects. Findings of the study indicates that knowledge management has a positive and significant influence over sustainable firms’ growth while both product and process innovations significantly mediated the knowledge management and sustainable firms growth relationship. Current research findings offer valuable implications concerning the importance of KM in enhancing and facilitating process and product innovations for sustainable firms’ growth. This is a pioneer study for employing a unified model that illustrates the relationships among multiple variables pertaining to KM.

Downloads

Download data is not yet available.

Article Analytics Summary

References

Abbas, J., Zhang, Q., Hussain, I., Akram, S., Afaq, A., & Shad, M. A. (2020). Sustainable innovation in small medium enterprises: The impact of knowledge management on organizational innovation through a mediation analysis by using SEM approach. Sustainability, 12(6), 2407. DOI: https://doi.org/10.3390/su12062407

Abdallah, A. B., Phan, A. C., & Matsui, Y. (2016). Investigating the effects of managerial and technological innovations on operational performance and customer satisfaction of manufacturing companies. International Journal of Business Innovation Research, 10(2-3), 153-183. DOI: https://doi.org/10.1504/IJBIR.2016.074824

Al-Sa’di, A. F., Abdallah, A. B., & Dahiyat, S. E. (2017). The mediating role of product and process innovations on the relationship between knowledge management and operational performance in manufacturing companies in Jordan. Business Process Management Journal, 23 (2), 349-376. DOI: https://doi.org/10.1108/BPMJ-03-2016-0047

Al‐Hakim, L. A. Y., & Hassan, S. (2013). Knowledge management strategies, innovation, and organisational performance. Journal of Advances in Management Research, 1 (10), 58-71. DOI: https://doi.org/10.1108/09727981311327767

Atalay, M., Anafarta, N., & Sarvan, F. (2013). The relationship between innovation and firm performance: An empirical evidence from Turkish automotive supplier industry. Procedia-Social Behavioral Sciences, 75(3), 226-235. DOI: https://doi.org/10.1016/j.sbspro.2013.04.026

Atuahene-Gima, K. (2005). Resolving the capability: Rigidity paradox in new product innovation. Journal of Marketing, 69 (4), 61-83. DOI: https://doi.org/10.1509/jmkg.2005.69.4.61

Bartezzaghi, E., Corso, M., & Verganti, R. (1997). Continuous improvement and inter-project learning in new product development. International Journal of Technology Management, 14(1), 116-138. DOI: https://doi.org/10.1504/IJTM.1997.001704

Bellucci, M., Bini, L., & Giunta, F. (2020). Implementing environmental sustainability engagement into business: sustainability management, innovation, and sustainable business models. In Innovation Strategies in Environmental Science (pp. 107-143): Elsevier. DOI: https://doi.org/10.1016/B978-0-12-817382-4.00004-6

Bianchi, C. (2012). Enhancing performance management and sustainable organizational growth through system-dynamics modelling. In Systemic Management for Intelligent Organizations (pp. 143-161): Springer. DOI: https://doi.org/10.1007/978-3-642-29244-6_8

Bogner, W. C., & Bansal, P. (2007). Knowledge management as the basis of sustained high performance. Journal of Management studies, 44(1), 165-188. DOI: https://doi.org/10.1111/j.1467-6486.2007.00667.x

Byukusenge, E., Munene, J., & Orobia, L. (2016). Knowledge management and business performance: Mediating effect of innovation. Journal of Business Management Sciences, 4(4), 82-92. DOI: https://doi.org/10.1080/23311975.2017.1368434

Cardoni, A., Zanin, F., Corazza, G., & Paradisi, A. (2020). Knowledge management and performance measurement systems for SMEs’ economic sustainability. Sustainability, 12(7), 2594. DOI: https://doi.org/10.3390/su12072594

Chang, S. G., & Ahn, J. H. (2005). Product and process knowledge in the performance‐oriented knowledge management approach. Journal of Knowledge Management, 9(4), 114-132. DOI: https://doi.org/10.1108/13673270510610378

Chang, Y.-C., Linton, J. D., & Chen, M.-N. (2012). Service regime: An empirical analysis of innovation patterns in service firms. Technological Forecasting Social Change, 79(9), 1569-1582. DOI: https://doi.org/10.1016/j.techfore.2012.05.017

Cho, Y. S., & Linderman, K. (2020). Resource-based product and process innovation model: Theory development and empirical validation. Sustainability, 12(3), 913. DOI: https://doi.org/10.3390/su12030913

Chuang, S.-H. (2004). A resource-based perspective on knowledge management capability and competitive advantage: An empirical investigation. Expert Systems with Applications, 27(3), 459-465. DOI: https://doi.org/10.1016/j.eswa.2004.05.008

Dahiyat, S. E. (2015). An integrated model of knowledge acquisition and innovation: Examining the mediation effects of knowledge integration and knowledge application. International Journal of Learning change, 8(2), 101-135. DOI: https://doi.org/10.1504/IJLC.2015.074064

Damanpour, F., & Aravind, D. (2012). Managerial innovation: Conceptions, processes, and antecedents. Management Organization Review, 8(2), 423-454. DOI: https://doi.org/10.1111/j.1740-8784.2011.00233.x

Damanpour, F., & Gopalakrishnan, S. (2001). The dynamics of the adoption of product and process innovations in organizations. Journal of Management studies, 38(1), 45-65. DOI: https://doi.org/10.1111/1467-6486.00227

Darroch, J. (2005). Knowledge management, innovation and firm performance. Journal of Knowledge Management, 9 (3), 101-115. DOI: https://doi.org/10.1108/13673270510602809

Du Plessis, M. (2007). The role of knowledge management in innovation. Journal of Knowledge Management, 11(4), 20-29. DOI: https://doi.org/10.1108/13673270710762684

Fuller, T., Warren, L., & Argyle, P. (2008). Sustaining entrepreneurial business: A complexity perspective on processes that produce emergent practice. International Entrepreneurship and Management Journal, 4, 1-17. DOI: https://doi.org/10.1007/s11365-007-0047-y

Gopalakrishnan, S., & Damanpour, F. (1994). Patterns of generation and adoption of innovation in organizations: Contingency models of innovation attributes. Journal of Engineering Technology Management, 11(2), 95-116. DOI: https://doi.org/10.1016/0923-4748(94)90001-9

Guan, J., & Ma, N. (2003). Innovative capability and export performance of Chinese firms. Technovation, 23(9), 737-747. DOI: https://doi.org/10.1016/S0166-4972(02)00013-5

Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of Production Economics, 133(2), 662-676. DOI: https://doi.org/10.1016/j.ijpe.2011.05.014

Hansen, M. T., & Birkinshaw, J. (2007). The innovation value chain. Harvard Business Review, 85(6), 121.

Hussain, I., Khan, A., Qurashi, A., Qurat-ul-Ain, & Shabbir, A. (2015). The impact of knowledge sharing enablers on employees' performance: An empirical study on read foundation in Azad Jammu & Kashmir. Journal of Information & Knowledge Management, 14(03), 1550020. DOI: https://doi.org/10.1142/S0219649215500203

Hussain, I., Qurashi, A., Mujtaba, G., Waseem, M. A., & Iqbal, Z. (2019). Knowledge management: A roadmap for innovation in SMEs’ sector of Azad Jammu & Kashmir. Journal of Global Entrepreneurship Research, 9(1), 9. DOI: https://doi.org/10.1186/s40497-018-0120-8

Jiménez-Jiménez, D., & Sanz-Valle, R. (2011). Innovation, organizational learning, and performance. Journal of Business Research, 64 (4), 408-417. DOI: https://doi.org/10.1016/j.jbusres.2010.09.010

Kaplan, R. S., & Norton, D. P. (1996). Linking the balanced scorecard to strategy. California Management Review, 39(1), 53-79. DOI: https://doi.org/10.2307/41165876

Karabulut, A. T. (2015). Effects of innovation types on performance of manufacturing firms in Turkey. Procedia-Social Behavioral Sciences, 195, 1355-1364. DOI: https://doi.org/10.1016/j.sbspro.2015.06.322

Kostopoulos, K. C., Spanos, Y. E., & Prastacos, G. P. (2002). The resource-based view of the firm and innovation: identification of critical linkages. Paper presented at the 2nd European Academy of Management Conference.

Kraiczy, N. D., Hack, A., & Kellermanns, F. W. (2015). The relationship between top management team innovation orientation and firm growth: The mediating role of firm innovativeness. International Journal of Innovation Management, 19(01), 1550005. DOI: https://doi.org/10.1142/S136391961550005X

Lee, Y. C., & Lee, S. K. (2007). Capabilities, processes, and performance of knowledge management: A structural approach. Human Factors Ergonomics in Manufacturing Service Industries, 17(1), 21-41. DOI: https://doi.org/10.1002/hfm.20065

Lee, C.S., & Wong, K.Y. (2015). Development and validation of knowledge management performance measurement constructs for small and medium enterprises. Journal of Knowledge Management, 19 (4), 711-734. DOI: https://doi.org/10.1108/JKM-10-2014-0398

Lin, C. Y., & Kuo, T. H. (2007). The mediate effect of learning and knowledge on organizational performance. Industrial Management & Data Systems, 107 (7), 1066-1083. DOI: https://doi.org/10.1108/02635570710816748

Lin, H.-F., & Lee, G.-G. (2005). Impact of organizational learning and knowledge management factors on e‐business adoption. Management Decision, 43 (2), 171-188. DOI: https://doi.org/10.1108/00251740510581902

López-Nicolás, C., & Meroño-Cerdán, Á. L. (2011). Strategic knowledge management, innovation and performance. International Journal of Information Management, 31(6), 502-509. DOI: https://doi.org/10.1016/j.ijinfomgt.2011.02.003

Manu, F.A. (1992). Innovation orientation, environment and performance: A comparison of U.S. and European markets. Journal of International Business Studies, 23 (2), 333-359. DOI: https://doi.org/10.1057/palgrave.jibs.8490271

Martin, L., McNeill, T., & Warren-Smith, I. (2013). Exploring business growth and eco innovation in rural small firms. International Journal of Entrepreneurial Behavior & Research, 19 (6), 592-610. DOI: https://doi.org/10.1108/IJEBR-10-2012-0118

Matlay, H., Mitra, J., & Barr, P. (2002). Managing learning, knowledge and innovation in SMEs: An empirical approach. Management Research News, 25(8/10), 126-128.

Mishra, B., & Bhaskar, A. U. (2011). Knowledge management process in two learning organisations. Journal of Knowledge Management, 15 (2), 344-359. DOI: https://doi.org/10.1108/13673271111119736

Obeidat, B. Y., Al-Suradi, M. M., & Tarhini, A. (2016). The impact of knowledge management on innovation: An empirical study on Jordanian consultancy firms. Management Research Review, 39 (10), 1214-1238. DOI: https://doi.org/10.1108/MRR-09-2015-0214

Pauleen, D. J., Corbitt, B., & Yoong, P. (2007). Discovering and articulating what is not yet known: Using action learning and grounded theory as a knowledge management strategy. The Learning Organization, 14(3), 222-240. DOI: https://doi.org/10.1108/09696470710739408

Phanayingphaisal, W., & Worawattanaparinya, S. (2020). Effective management guidelines for industrial estate authority to support sustainable growth of the country. Academy of Strategic Management Journal, 19(1), 1-15.

Polder, M., Leeuwen, G. v., Mohnen, P., & Raymond, W. (2010). Product, process and organizational innovation: drivers, complementarity and productivity effects. CIRANO-Scientific Publications, S-28. DOI: https://doi.org/10.2139/ssrn.1626805

Qurashi, A., Hussain, I., Mushtaq, F., & Ullah, A. (2013). The dilemma of success and failure in family business: Overcoming failure and attaining success. International Journal of Academic Research in Economics Management Sciences, 2(4), 161-177. DOI: https://doi.org/10.6007/IJAREMS/v2-i4/121

Sarrico, C. S., & Dyson, R. G. (2000). Using DEA for planning in UK universities-an institutional perspective. Journal of the operational Research Society, 51(7), 789-800. DOI: https://doi.org/10.1057/palgrave.jors.2600949

Sezen, B., & Cankaya, S. Y. (2013). Effects of green manufacturing and eco-innovation on sustainability performance. Procedia-Social Behavioral Sciences, 99, 154-163. DOI: https://doi.org/10.1016/j.sbspro.2013.10.481

Shujahat, M., Sousa, M. J., Hussain, S., Nawaz, F., Wang, M., & Umer, M. (2019). Translating the impact of knowledge management processes into knowledge-based innovation: The neglected and mediating role of knowledge-worker productivity. Journal of Business Research, 94, 442-450. DOI: https://doi.org/10.1016/j.jbusres.2017.11.001

Sok, P., O’Cass, A., & Sok, K. M. (2013). Achieving superior SME performance: Overarching role of marketing, innovation, and learning capabilities. Australasian Marketing Journal, 21(3), 161-167. DOI: https://doi.org/10.1016/j.ausmj.2013.04.001

Tidd, J. (2014). Conjoint innovation: Building a bridge between innovation and entrepreneurship. International Journal of Innovation Management, 18(01), 1450001. DOI: https://doi.org/10.1142/S1363919614500017

Turulja, L., & Bajgoric, N. (2020). Innovation as a mediator between knowledge management and organisational performance: Knowledge acquisition, knowledge application, and innovation towards the ability to adapt to change. In Knowledge Management, Innovation, and Entrepreneurship in a Changing World (pp. 46-68): IGI Global. DOI: https://doi.org/10.4018/978-1-7998-2355-1.ch003

Uhlaner, L. M., van Stel, A., Duplat, V., & Zhou, H. (2013). Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth. Small Business Economics, 41(3), 581-607. DOI: https://doi.org/10.1007/s11187-012-9455-7

Wang, F., & Chen, K. (2020). Do product imitation and innovation require different patterns of organizational innovation? Evidence from Chinese firms. Journal of Business Research, 106, 60-74. DOI: https://doi.org/10.1016/j.jbusres.2019.08.046

Wernerfelt, B. (1995). The resource‐based view of the firm: Ten years after. Strategic Management Journal, 16(3), 171-174. DOI: https://doi.org/10.1002/smj.4250160303

Yang, J. (2010). The knowledge management strategy and its effect on firm performance: A contingency analysis. International Journal of Production Economics, 125(2), 215-223. DOI: https://doi.org/10.1016/j.ijpe.2010.03.012

Zack, M., McKeen, J., & Singh, S. (2009). Knowledge management and organizational performance: an exploratory analysis. Journal of Knowledge Management, 13 (6), 392-409. DOI: https://doi.org/10.1108/13673270910997088

Published
2020-09-30
How to Cite
Iftikhar Hussain, Ghulam Mujtaba Chaudhary, Adeel Arshad, & Sabahat Akram. (2020). Knowledge Management and Sustainable Firms Growth: An Evidence from SMEs Sector of Pakistan. Journal of Business and Social Review in Emerging Economies, 6(3), 1075-1086. https://doi.org/10.26710/jbsee.v6i3.1368