Abstract
This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of knowledge management and their impact on the financial performance of economic entities. It is determined that despite the key role of knowledge both for the development of the country (which in the 21st century is based mainly on knowledge) and to increase the value of the company, today companies do not fully use arrays of knowledge and data, which forms barriers to increase competitiveness in the strategic perspective. The main purpose of this study is to assess the impact of knowledge management on the financial performance of companies. Data for the study were obtained from a primary source based on a structured questionnaire with which Dangote Flourmills staff worked. The methodology of the work is a software product for statistical data processing – STATA 11, while the data analysis was performed on the basis of regression analysis, which was used to test hypotheses at the level of 5% significance. The analysis of the data confirmed the significance of the impact of all indicators of knowledge management on the financial performance of the economic entity. The results theoretically confirmed and empirically proved that strategic leadership, organizational culture, information, and communication technologies, effective human resource management practices have a significant impact on financial performance. This study concludes that knowledge management has a significant impact on the financial performance of businesses. The paper states that knowledge management activities help to focus the company’s management on the accumulation, storage, and use of knowledge to solve problems, dynamic learning, strategic planning, and making sound financial and economic decisions. The authors have formed the following recommendations: assistance from the management of the company to exchange knowledge, training and professional development; introduction of the latest digital technologies to improve communication and management mechanisms, based on the specifics, features, and needs of companies; ensuring and developing a corporate culture that allows you to balance and coordinate the actions of management policy. Keywords: knowledge management, human resources, strategic leadership, organizational culture, financial results of the company.
Highlights
The success and failure of every business is in one way or the other attached to the environment where it operates because of the highly characterize uncertainty that is attached to this environment irrespective of it goals and objectives especially in this current aggressive, exceptionally competitive, and complex business environments
Various points has been listed out to be among the contributing factors to the failure of knowledge management in an organization as it has been identified that in the past, knowledge has been managed through human resources and/or information technology divisions and it has not received the direct attention of management that it deserves and needs
The results indicated that there is a significant relationship between knowledge management and organizational development
Summary
The success and failure of every business is in one way or the other attached to the environment where it operates because of the highly characterize uncertainty that is attached to this environment irrespective of it goals and objectives especially in this current aggressive, exceptionally competitive, and complex business environments. Various points has been listed out to be among the contributing factors to the failure of knowledge management in an organization as it has been identified that in the past, knowledge has been managed through human resources and/or information technology divisions and it has not received the direct attention of management that it deserves and needs. This is a major cause of suboptimal performance and is a source of risk as other enabler factors have not been considered.
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