Knowledge Management and Strategic Orientation: Leveraging Innovativeness and Performance

Purpose – The aim of this study is to investigate whether knowledge management (KM) contributes to the development of strategic orientation and to enhance innovativeness, and whether these three factors contribute to improve business performance. Design/methodology/approach – A sample of 241 Brazilian companies was surveyed, using Web-based questionnaires with 54 questions, using ten-point scales to measure the degree of agreement on each item of each construct. Structural equation modeling techniques were applied for model assessment and analysis of the relationships among constructs. Exploratory factor analysis, confirmatory factor analysis, and path analysis using the technique of structural equation modeling were applied to the data. Findings – Effective KM contributes positively to strategic orientation. Although there is no significant direct effect of KM on innovativeness, the relationship is significant when mediated by strategic orientation. Similarly, effective KM has no direct effect on business performance, but this relationship becomes statistically significant when mediated by strategic orientation and innovativeness. Research limitations/implications – The findings indicate that KM permeates all relationships among the constructs, corroborating the argument that knowledge is an essential organizational resource that leverages all value-creating activities. The results indicate that both KM and innovativeness produce significant impacts on performance when they are aligned with a strategic orientation that enables the organization to anticipate and respond to changing market conditions. Originality/value – There is a substantial body of research on several types of relationships involving KM, strategic orientation, innovativeness and performance. This study offers an original contribution by analyzing all of those constructs simultaneously, using established scales so that comparative studies are possible.