Effects of knowledge management on firm competitiveness: The mediation of operational efficiency

Abstract

Background: Although knowledge management (KM) directly impacts firm competitiveness, in efficiency-driven economies such as South Africa, the contribution of operational efficiency to this relationship has been underexplored in KM literature.Objectives: This study examined how operational efficiency interacts with KM to influence firm competitiveness. The study employs the South African context to enrich knowledge on the effects of KM on firm competitiveness and the extent to which operational efficiency mediates the process.Method: Using a quantitative approach with a survey design, 300 structured questionnaires were distributed to 300 small, medium and micro enterprise (SMME) owners and managers in the Free State province to establish the interaction of KM, operational efficacy and competitiveness.Results: The results of path coefficients revealed KM’s positive and significant effect on firm competitiveness. Moreover, operational efficiency partially mediated KM (recognition) (B = 0.1545, p = 0.019) and KM (implementation)’s (B = 0.0697, p = 0.050) effects on firm competitiveness.Conclusion: The prevalence of highest qualification among SMME owners/managers demonstrates that human capital development, especially business management training during business start-ups, may contribute to increased firm competitiveness. Moreover, the lack of resources in managing knowledge for implementing daily routines and increasing sales demonstrates that improved resource mobilisation by SMMEs might improve their competitiveness.Contribution: The study provides strategic interventions for improving SMME competitiveness through better management of their knowledge practices and operational efficiency.