Investigation of knowledge management and firm competitiveness: core competence as a mediator

Abstract

Background: The objective of the current study is to empirically investigate interrelationships among three variables; knowledge management (KM), core competence (CC), and firm competitiveness (FC), and to develop a framework based on empirical evidence for developing countries in South Asia. Methods: This is a cross-sectional quantitative study using the Pakistan stock exchange (PSX) enlisted manufacturing and service organizations having a sample size of 136 companies. A questionnaire was self-administered to the respondents by executing a comprehensive strategy to get a high response rate. A total of 201 valid and complete responses from four manufacturing (automobiles, food & cosmetics, textile, and pharmaceutical) and one service organization (banks) were received using a Likert scale of five points in the questionnaire to examine the subject agreement level against statements. All hypothesized relationships were analyzed by employing SEM using AMOS ver. 20. Results: Results of the study confirmed the positive and significant influence of four constructs of knowledge management processes on four constructs of firm competitiveness (innovation, delivery, quality, and financial performance). Further, knowledge management significantly impacts the firm's competitiveness through the mediation of technology, organization and people (TOP) core competence. The findings also supported that managing the intangible resource of the organization can influence the firm's competitiveness and resource-based TOP competence. Conclusions: The SEM analysis confirmed all hypothetical relationships and supported the knowledge management's direct and indirect effects through core competence on firm competitiveness. The findings showed that the effectiveness of knowledge management will increase the organizations' competitiveness in developing countries' research perspective.