Abstract

The purpose of this study is to analyze the effect of knowledge management practices on the firm’s performance in software industry of Pakistan. A co relational research design using a multiple regression was used to test the causal relationships among the knowledge management practices, firm’s performance and the moderating role of interpersonal trust. Hypotheses were tested through field research study carried out on 38 firms in information technology industry of Pakistan. Quantitative data using convenient sampling technique were collected through questionnaires. The important finding of this paper is that the presence of IPT as a moderator changes the direction or strength of relation between KMPs and FP. This study contributes to the growing body of literature linking knowledge management and the resource base view and knowledge base view and determines practices that have a positive incidence on firm’s performance. The paper concludes that developing interpersonal trust among employees can lead to effective implementation of KMPS which increases the firm’s performance. Future cross-cultural research would be valuable and may reveal details about the phenomena in a broader context. Key words: Knowledge Management Practices (KMPs), Firm Performance (FP), Interpersonal Trust (IPT), Resource Base View (RBV), Knowledge Base View (KBV).

Highlights

  • The literature had already worked implicitly with knowledge, the increasing spread of theoretical works on knowledge management (KM) is due to the importance it has for the firm, as well as the development of the knowledge-based view (Marques, 2006).The aim of this research is to study the importance of Knowledge Management Practices (KMPs) as a source of sustainable competitive

  • Software companies located in Rawalpindi and Islamabad have implemented and follow all knowledge management practices and recognize that their knowledge is an important asset that gathers over time and assists the organizations to become successful

  • Knowledge management practices help organizations capture knowledge across different skill sets and a strong positive relation is found among knowledge management practices and Firm Performance (FP)

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Summary

Introduction

The literature had already worked implicitly with knowledge, the increasing spread of theoretical works on KM is due to the importance it has for the firm, as well as the development of the knowledge-based view (Marques, 2006).The aim of this research is to study the importance of KMPs as a source of sustainable competitive. Afzal and Afzal advantages for firms and to analyze how the introduction of IPT enables FP to improve. Knowledge management is taken as a pillar for improving the performance of the firm and for providing the competitive advantage. Knowledge management initiatives have enabled the organizations to experience successes by proper utilization of knowledge in the form of best practices that lie within the firm. Knowledge management practices are not given much importance in developing countries like Pakistan where literacy rate is not very high (Abass et al, 2011).

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