Knowledge Management Process Capability and Organisational Performance of Manufacturing Small and Medium Enterprises in Malaysia: The Moderating Effect of Entrepreneurial Orientation

Ha, Shiaw-Tong (2019) Knowledge Management Process Capability and Organisational Performance of Manufacturing Small and Medium Enterprises in Malaysia: The Moderating Effect of Entrepreneurial Orientation. Masters thesis, Universiti Malaysia Sarawak.

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Abstract

In today’s increasingly globalised world, knowledge has become the key source of competitive advantage and organisational performance. Knowledge management (KM) has been acknowledged as an essential process for managing knowledge. Nevertheless, the literature relating to the KM process and performance in small and medium enterprises (SMEs) is rather limited. The competitiveness of an organisation also depends on how likely the organisation to be proactive, risk-taking when facing new opportunities. Entrepreneurial orientation (EO) therefore plays an important role in helping Malaysian SMEs to enhance their organisational performance. The main objective of this study is to investigate and provide empirical evidence on the interrelationships between KM, EO, and organisational performance. This study attempts to examine whether KM dimensions are critical success factors for SMEs performance. This study also attempts to determine the moderating effect of EO on the relationship between KM and organisational performance. To achieve these objectives, the survey was conducted with a sample of 159 Malaysian manufacturing SMEs located in Selangor, Johor, and Sarawak. The analysis of the partial least squares structural equation modeling (PLS-SEM) reveals that KM dimensions are of importance in enhancing the organisational performance of Malaysian SMEs. Three of four KM dimensions: knowledge acquisition, knowledge conversion, and knowledge protection were found to be significantly and positively related to both financial and non-financial performance. Moreover, EO has been found to positively moderate the knowledge conversion and application in their relationships with non-financial and financial performance, respectively. The findings of this study contribute to scholars and practitioners by providing empirical evidence on the moderating effects of EO, and the impacts of KM dimensions on the organisational performance in the context of SMEs.

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