Influence of Knowledge Management on Business Processes: Value-Added and Sustainability Perspectives

Abstract

Knowledge management (KM) practice is increasingly less considered as a supportive activity, as knowledge management processes (KMP) are inseparable from critical business processes (BP). Even though some scientific studies underlined that KM integration into BP are expensive and slow due to many organizational barriers, their sustainable value to organizations is undeniable. Although KMPs’ interactions have been studied in the scientific literature, there is still a lack of comprehensive studies related to knowledge-intensive organizations’ practices on the impact of the whole KM cycle—consisting of knowledge creation, sharing, storage, and application—on BP, such as development, production, and sales, for creating value-added (VA) and sustainability. In order to identify interconnections between individual KMP and BP, this study aimed to evaluate the influence of KMP on BP to support the continuous improvement of BP and the creation of VA in knowledge-intensive organizations. A research model was developed to analyze the impact of KMP on BP and VA perspectives. An empirical study was performed in Lithuanian project management companies that used BP in their operations and involved 144 managers from 72 IT organizations. Survey (structured questionnaire) and statistical analysis methods (one-way analysis of variance (ANOVA); Pearson’s correlation analysis; multiple regression analysis and mediation analysis; cluster analysis and chi-square analysis) were applied in this study. The research results confirmed that every KMP positively affected individual BP, where knowledge creation had the most significant impact. The hypothesis that every KMP positively affected the VA created in an organization was partially confirmed since knowledge sharing and creation had a strong influence. The study demonstrated that KMP as a whole had a positive effect on the central BP, change (improvement) of BP increased VA created in organizations, and BP acted as a mediator of the positive correlation between KMP and the VA. The effectiveness of individual KMP depended on the size of the organization. As a result, the study confirmed that KMP in organizations could not be performed separately and had to be integrated into BP to maximize the VA. The significance of the research model lay not only in its ability to identify the influence of KMP on the VA created in organizations but also in evaluating each KMP individually.