Effects of Knowledge Management Capabilities on Perceived Performance: An Empirical Examination

Abstract

Many business consultants and strategy theorists consider Knowledge Management (KM) critical to the success of an organization. While a few empirical studies have investigated the relationships among KM capability and various measures of performance, it is still not known what KM capabilities actually affect organization performance. Also, some research has examined contingency factors related to KM and performance, but industry type has not been examined as a possible moderator. This study explored two major questions: (1) Do KM capabilities impact perceived organization performance? and (2) Do KM capabilities have different effects in different industries? The results indicate that activities for knowledge documentation, acquisition and creation positively impact business performance and that the type of industry moderates the relationships. From a resource-based and knowledge-based view of the firm, the results indicate that in some circumstances KM creates a capability that results in improved performance. In general, the results help understand the complex role of knowledge management capabilities in firms.