Reinforcing Innovation through Knowledge Management: Mediating Role of Organizational Learning

Abstract

Aim/Purpose: The purpose of this study is to investigate the relationship between knowledge management (KM) and organizational innovation (OI). It also enriches our understanding of the mediating effect of organizational learning (OL) in this relationship. Background: KM’s relationship with OL and OI has been tackled extensively in developed countries’ literature. Nowadays, the challenges of developing countries lie in the process of knowledge application. This study attempts to develop a new managerial knowledgeable tool and present a theoretical model and empirical analysis of the relationship between KM and innovation in Jordan, a developing country. To the knowledge of the author, no attempt has been taken to investigate this relationship in any Jordanian sector. Methodology: The sample of this study consists of 457 managers representing strategic, tactical, and operational levels randomly selected from 56 manufacturing companies in Jordan. A questionnaire-based survey has been developed based on KM, OL and OI literature to collect data. A structural equation modeling (SEM) approach was applied to investigate the proposed research model. Contribution: This study contributes to the literature in different ways. First, it asserts that OL assists in improving OI in manufacturing organization of developing countries. Second, it highlights the substantial benefits of applying KM, OL and OI in manufacturing companies in Jordan. Furthermore, it enhances the relationship between KM and innovativeness’ literature by providing empirical evidence, suggesting that OL is as important as KM to advance organizational innovation. Most importantly, it identifies the problem of a developing economy which is not promoting OL or taking care of it as much as they attended to KM in their organizational practices. Findings: Study findings indicate that the relationship between KM and OI is significantly positive. Results also reveal that the relationship between KM and organizational learning is significantly positive. Empirical results emerging from this study indicate that there is partial mediation to support the relationship between OL and OI. Recommendations for Practitioners: This study suggests that managers ought to recognize that organizational learning is equally important to KM. This entails that OL should be utilized within organizations to achieve organizational innovation. Moreover, managers ought to comprehend their importance and encourage their employees to adopt knowledge from various sources; which, if implemented correctly, will enhance the OL environment. Recommendation for Researchers: The research model can be used or applied in different manufacturing and service sectors across the globe. The findings of the current study can serve as a foundation to perform different studies to understand KM processes and recognize its antecedence. Impact on Society: This study presents insights on how to apply KM, OL and OI methodologies in Jordanian manufacturing companies to achieve a competitive advantage; hence, positively influencing society. Future Research: Future research may include conducting a similar study in the context of developed countries and developing countries which allows for comparison. Also, future research may examine the impact of KM on organizational performance applying both OL and OI as mediating variables.