The impact of knowledge management on SMES’ performance during the COVID-19 pandemic: Assessing the significance of digital variables
-
DOIhttp://dx.doi.org/10.21511/kpm.07(1).2023.06
-
Article InfoVolume 7 2023, Issue #1, pp. 76-90
- Cited by
- 517 Views
-
198 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The purpose of this study is to investigate the impact of knowledge management on the performance of small and medium-sized enterprises during the COVID-19 period in Indonesia. Furthermore, the study also highlights the role of digital variables such as digital capability, digital orientation, and digital innovation as mediating variables. A total of 247 valid responses were collected for this study through the survey conducted among managers of SMEs in Indonesia. The collected data were analyzed using Structural Equation Modeling with the Partial Least Squares approach. The study’s findings revealed several significant insights. It established the positive impact of knowledge management on digital capability, digital orientation, and digital innovation during the COVID-19 pandemic. Additionally, the study identified digital capability as a mediating factor between knowledge management and SMEs’ performance. However, the full support for the mediating roles of digital orientation and digital innovation in the relationship between knowledge management and SME performance was not confirmed, suggesting potential context-specific variations. This implies that the influence of knowledge management on SMEs’ performance is mainly channeled through digital capability. The research underscores the importance of knowledge management and digital factors in shaping SMEs’ performance, particularly in the challenging context of the COVID-19 pandemic.
- Keywords
-
JEL Classification (Paper profile tab)L21, L25, O32, O36, I18
-
References50
-
Tables6
-
Figures1
-
- Figure 1. Structural equation model
-
- Table 1. Measurement items
- Table 2. Sample demographics
- Table 3. Validity and reliability result
- Table 4. R-square results
- Table 5. Summary of path coefficient
- Table 6. Summary of mediation effects
-
- Abbas, J., Zhang, Q., Hussain, I., Akram, S., Afaq, A., & Shad, M. A. (2020). Sustainable Innovation in Small Medium Enterprises: The Impact of Knowledge Management on Organizational Innovation through a Mediation Analysis by using SEM Approach. Sustainability, 12(6), 2407.
- Achmad, G. N., Yudaruddin, R., Budiman, P. W., Santi, E. N., Suharsono, Purnomo, A. H., & Wahyuningsih, N. (2023). Eco-Innovation and SME Performance in Time of Covid-19 Pandemic: Moderating Role of Environmental Collaboration. Emerging Science Journal, 7, 251-263.
- Bendig, D., Schulz, C., Theis, L., & Raff, S. (2023). Digital orientation and environmental performance in times of technological change. Technological Forecasting and Social Change, 188, 122272.
- Bouncken, R. B., Kraus, S., & Roig-Tierno, N. (2021). Knowledge and innovation-based business models for future growth: digitalized business models and portfolio considerations. Review of Managerial Science, 15, 1-14.
- Bouwman, H., Nikou, S., & de Reuver, M. (2019). Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs? Telecommunications Policy, 43, 101828.
- Byukusenge, E., & Munene, J. C. (2017). Knowledge Management and Business Performance: Does Innovation Matter? Cogent Business & Management, 4(9), 1368434.
- Cenamor, J., Parida, V., & Wincent, J. (2019). How Entrepreneurial SMEs Compete through Digital Platforms: The Roles of Digital Platform Capability, Network Capability and Ambidexterity. Journal of Business Research, 100, 196-206.
- Chae, H.-C., Koh, C. E., & Prybutok, V. R. (2014). Information technology capability and firm performance: Contradictory findings and their possible causes. MIS Quarterly, 38(1), 305-326.
- Chen, C. J., & Huang, J. W. (2009). Strategic human resource practices and innovation performance – The mediating role of knowledge management capacity. Journal of Business Research, 62(1), 104-114.
- Chen, Y. Y., & Huang, H. L. (2012). Knowledge management fit and its implications for business performance: A profile deviation analysis. Knowledge-Based Systems, 27, 262-270.
- Choi, K. B., Moon, K. H., & Ko, W. (2013). An organization’s ethical climate, innovation, and performance: effects of support for innovation and performance evaluation. Management Decision, 51(6), 1250-1275.
- Gatignon, H., & Xuereb, J. M. (1997). Strategic orientation of the firm and new product performance. Journal of Marketing Research, 34(1), 77-90.
- Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2016). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Thousand Oaks, CA: Sage.
- Halldorsson, A., Kotzab, H., Mikkola, J. H., & Skjøtt Larsen, T. (2007). Complementary theories to supply chain management. Supply Chain Management, 12(4), 284-296.
- Hassan, N., & Raziq, A. (2019). Effects of Knowledge Management Practices on Innovation in SMEs. Management Science Letters, 9, 997-1008.
- Heredia, J., Castillo-Vergara, M., Geldes, C., Gamarra, F. M. C., Flores, A., & Heredia, W. (2022). How do digital capabilities affect firm performance? The mediating role of technological capabilities in the “new normal”. Journal of Innovation & Knowledge, 7(2), 100171.
- Hogan, S. J., & Coote, L. V. (2014). Organizational culture, innovation, and performance: A test of Schein’s model. Journal of Business Research, 67(8), 1609-1621.
- Huang, Q., Xu, C., Xue, X., & Zhu, H. (2023). Can digital innovation improve firm performance: Evidence from digital patents of Chinese listed firms. International Review of Financial Analysis, 89, 102810.
- Khin, S., & Ho, T. C. (2020). Digital technology, digital capability and organizational performance: A mediating role of digital innovation. International Journal of Innovation Science, 11(2), 177-195.
- Kindermann, B., Beutel, S., Garcia de Lomana, G., Strese, S., Bendig, D., & Brettel, M. (2020). Digital orientation: Conceptualization and operationalization of a new strategic orientation. European Management Journal, 39(5), 645-657.
- Leão, P., & da Silva, M. M. (2021). Impacts of digital transformation on firms’ competitive advantages: A systematic literature review. Strategic Change, 30(5), 421-441.
- Lee, C., Lee, K., & Pennings, J. M. (2001). Internal Capabilities, External Networks, and Performance: A Study on Technology-based Ventures. Strategic Management Journal, 22(6/7), 615-640.
- Leonardi, P. M. (2011). When flexible routines meet flexible technologies: Affordance, constraint, and the imbrication of human and material agencies. MIS Quarterly, 35(1), 147-168.
- Lestari, D., Zainurossalamia Za, Maria, S., Wardhani, W., & Yudaruddin, R. (2021). The impact of COVID-19 pandemic on performance of small enterprises that are e-commerce adopters and non-adopters. Problems and Perspectives in Management, 19(3), 467-477.
- Lewis, J., Wright, P. C., & Geroy, G. D. (2004). Managing human capital: The study of a self-managed group venturing into the digital economy. Management Decision, 42(2), 205-228.
- Liu, Y., Dong, J. Y., & Wei, J. (2020). Digital innovation management: Theoretical framework and future research. Management World, 36(7), 198-217.
- Mafabi, S., Munene, J., & Ntayi, J. (2012). Knowledge management and organisational resilience: Organisational innovation as a mediator in Uganda parastatals. Journal of Strategy and Management, 5(1), 57-80.
- Masoud, R., & Basahel, S. (2023). The Effects of Digital Transformation on Firm Performance: The Role of Customer Experience and IT Innovation. Digital, 3(2), 109-126.
- Moorman, C., & Slotegraaf, R. J. (1999). The contingency value of complementary capabilities in product development. Journal of Marketing Research, 36(2), 239-257.
- Osmundsen, K., Iden, J., & Bygstad, B. (2018). Digital transformation: Drivers, success factors, and implications. In Proceedings of the MCIS 2018. Corfu, Greece.
- Paladino, A. (2007). Investigating the drivers of innovation and new product success: a comparison of strategic orientations. Product Innovation Management, 24(6), 534-553.
- Quinton, S., Canhoto, A., Molinillo, S., Pera, R., & Budhathoki, T. (2018). Conceptualising a digital orientation: antecedents of supporting SME performance in the digital economy. Journal of Strategic Marketing, 26(5), 427-439.
- Riadi, S. S., Heksarini, A., Lestari, D., Maria, S., Zainurossalamia, S., & Yudaruddin, R. (2022). The Benefits of e-Commerce before and during the Covid-19 Pandemic for Small Enterprises in Indonesia. WSEAS Transactions on Environment and Development, 18, 69-79.
- Rupeika-Apoga, R., Petrovska, K., & Bule, L. (2022). The Effect of Digital Orientation and Digital Capability on Digital Transformation of SMEs during the COVID-19 Pandemic. Journal of Theoretical and Applied Electronic Commerce Research, 17(2), 669-685.
- Saksonova, S., & Kuzmina-Merlino, I. (2017). Fintech as Financial Innovation – The Possibilities and Problems of Implementation. European Research Studies Journal, 20(3A), 961-973.
- Saputra, N., Sasanti, N., Alamsjah, F., & Sadeli, F. (2022). Strategic role of digital capability on business agility during COVID-19 Era. Procedia Computer Science, 197, 326-335.
- Shahzad, A., Chin, H. K., Altaf, M., & Anwar, F. (2020). Malaysian SMEs Performance and the Use of E-Commerce: A Multi-Group Analysis of Clickand-Mortar and Pure-Play E-Retailers. Pakistan Journal of Commerce and Social Sciences, 14(1), 1-33.
- Tan, C. L., & Nasurdin, A. M. (2010). Knowledge management effectiveness and technological innovation: An empirical study in the Malaysian manufacturing industry. Journal of Mobile Technologies, Knowledge and Society, 25, 13-17.
- Teece, D. J. (2018). Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world. Research Policy, 47(8), 1367-1387.
- Wang, X., Gu, Y., Ahmad, M., & Xue, C. (2022). The Impact of Digital Capability on Manufacturing Company Performance. Sustainability, 14(10), 6214.
- esterman, G., Bonnet, D., & McAfee, A. (2012). The digital capabilities your company needs. MIT Sloan Management Review.
- Xu, J., Houssin, R., Caillaud, E., & Gardoni, M. (2010). Macro process of knowledge management for continuous innovation. Journal of Knowledge Management, 14(4), 573-591.
- Yli-Renko, H., Denoo, L., & Janakiraman, R. (2020). A knowledge-based view of managing dependence on a key customer: Survival and growth outcomes for young firms. Journal of Business Venturing, 35(6), 106045.
- Yudaruddin, R. (2023a). Bank lending during the COVID-19 pandemic: do alliances and digital strategies matter? Managerial Finance, 49(7), 1221-1238.
- Yudaruddin, R. (2023b). Financial technology and performance in Islamic and conventional banks. Journal of Islamic Accounting and Business Research, 14(1), 100-116.
- Yudaruddin, R., Soedarmono, W., Nugroho, B. A., Fitrian, Z., Mardiany., Purnomo, A. H., & Santi, E. N. (2023). Financial technology and bank stability in an emerging market economy. Heliyon, 9(5), e16183.
- Zainurossalamia, S. Z. A., Martiyanti, D., Achmad, G. N., Lesmana, D., & Yudaruddin, R. (2022). Impact of operational activities on customer satisfaction in cafes and restaurants: A mediating role of infrastructural elements. Innovative Marketing, 18(4), 13-24.
- Zhang, H., Shu, C., Jiang, X., & Malter, A. J. (2010). Managing knowledge for innovation: The role of cooperation, competition, and alliance nationality. Journal of International Marketing, 18(4), 74-94.
- Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, 31(5), 547-561.
- Zhou, K. Z., Yim, C. K. B. & Tse, D. K. (2005). The effects of strategic orientations on technology and market-based breakthrough innovations. Journal of Marketing, 69(2), 42-60.