Abstract
While it is well-known knowledge management is crucial for an organization’s competitive advantage, relatively little research has explored the process whereby knowledge management affects firm performance in a collectivistic culture such as China. This study is to explore the mechanism through which knowledge management helps improve firm performance and then to examine the mediating role of decision quality in the Chinese context. Using a self-administered questionnaire to collect data from Chinese entrepreneurs and with structural equation modeling, this study shows that knowledge accumulation, internal sharing, and external knowledge sharing all have a positive impact on firm performance, and decision quality partially mediates the impact of knowledge management on firm performance. This study adds value to the knowledge management literature by introducing decision quality as a mediating variable to examine the impact of knowledge sharing on firm performance in China. The findings of this study can help enrich the literature on knowledge management and firm performance and highlight the important impact of decision quality on knowledge management and firm performance. Management practitioners can also benefit from the findings.
Highlights
With the fast development of the knowledge economy in the globalized world market, organizations are facing an increasingly complex business environment, and management practitioners have considered knowledge management as one of the most important factors for organizational success [1,2,3]
The current business environment is more dynamic and complex than it was in the past decade, and a firm’s strategic decision-making process has to take into consideration the uncertain, vague, and sometimes conflicting requirements from the market, a new challenge for all entrepreneurs [4,6,7]
It is expected that the Sustainability 2019, 11, 3660 emphasis on knowledge creation, accumulation, and sharing and their impact on decision quality and firm performance will continue to be the focus of future research on knowledge management and firm performance, even in the international context [4,22,23]
Summary
With the fast development of the knowledge economy in the globalized world market, organizations are facing an increasingly complex business environment, and management practitioners have considered knowledge management as one of the most important factors for organizational success [1,2,3]. The findings will help enrich the literature on knowledge management and strategy decision-making, and provide valuable insights for entrepreneurs to enhance their decision-making quality through organizational learning and knowledge management in order to improve firm performance. This study will explore the relationship between knowledge management and decision-making in an international context, China, one of the most important emerging markets [4]. The findings will help enrich our understanding of knowledge management in different international contexts and offer insightful suggestions to knowledge management practitioners and international entrepreneurs
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