How Knowledge Management Influences Performance?

Abstract

Prior research studies on knowledge management (KM) offer inconsistent support that it enhances firm performance. A majority of them discuss KM without incorporating the valuation of KM efforts. This article proposes a conceptual model comprised of six KM and two performance constructs. Performance is classified as financial and non-financial. Survey data from 313 Indian respondents is used to examine the influence of KM on firm performance. The results show that there is a strong, positive and significant link between the six KM constructs and organizational performance. Further, it is found that the influence of KM constructs on financial performance is indirect, that is, their influence is accomplished through the mediating variable organizational performance. The study provides evidence, firstly, through identifying important KM constructs and secondly by examining its influence on performance. It contributes to managerial practice by proposing an empirically validated KM model, which can guide KM practitioners in developing capabilities for enhancing organizational performance.