Investigating a New Framework for the Impact of Knowledge Management Strategy on Organizational Performance

Understanding the relations between knowledge management strategy with organizational innovation capability and performance in both large and small firms is relevant for researchers, policy-makers and managers of large and small companies alike. Many organizations have begun to recognize that one of the main factors to building a capable of being sustained competitive advantages in knowledge economy is innovation capability. In spite of this fact, determining the innovation capability has viewed as an exclusive method, a theoretic and plenary. The studies about the effect of internal and external innovation drivers on organizational performance are few. This research addresses the deficiency of the experimental researches through development of a conceptual framework to inquire the influence of knowledge management strategy on organizational performance directly and through innovation capability assuming industry type as a moderator on the proposed relationships. A quantitative method was used to investigating the relationships lanes. A self-administered questionnaire was used for collecting data of 272 automotive companies as a sample of 849 companies in automation sector in Iran. Hypothesized relations were assessed by structural equation modelling (SEM) with Smart-PLS software. The result of analysis exposed the significant relation among knowledge management strategy and firm outcome. Besides that, the results disclosed that knowledge management strategy through the mediating variable of innovation capability has a positive effect on organizational performance. Furthermore, the results of multi-group analysis confirmed that industry type moderating the relationship between knowledge management strategies and organizational innovation capability is moderated by industry type. This research used both resource- and knowledge-based theory developing a new conceptual framework to prove clearly the importance of knowledge management strategy and innovation capability in improving organizational outcome. Furthermore, this paper is providing a new guide line to implement knowledge management effectively.