EFFECT OF KNOWLEDGE MANAGEMENT PRACTICES ON ORGANIZATIONAL AND FINANCIAL PERFORMANCE:- A STUDY ON MSMEs (MICRO, SMALL AND MEDIUM ENTERPRISES) IN INDIA
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Abstract
The paper aims to develop a research model to determine the constructs important to knowledge management with respect to MSMEs, to ascertain the impact of these constructs on organizational performance, and to establish the impact of organizational performance on financial performance. To achieve the objective of the study, primary data was collected from the top management team of Micro, Small & Medium Enterprises (MSMEs) in India. The research model was developed and analyzed using Partial Least Squares Structural Equation Model (PLS-SEM) to determine the constructs important to knowledge management and its impact on organizational performance and financial performance.It was found that the Knowledge Management Culture, Knowledge Management Systems, Knowledge Management Strategic Planning & Implementation, and Knowledge Leadership had a positive and statistically significant impact on the organizational performance of MSMEs. Additionally, organizational performance had a positive and statistically significant impact on financial performance. However, Knowledge Management Capacity and Knowledge Management Benchmarking had no impact on the organizational performance of MSMEs. Further based on the Importance-Performance Map Analysis (IPMA) it was found that Knowledge Management Strategic Planning and Implementation (KMSP) was the most important construct under study that has an impact on organizational performance of MSMEs.Based on the findings the study will help top management understand the importance of strategic planning and implementation of knowledge management for organizational performance. Further, as organizations grow, especially in the case of MSMEs, where the growth potential is huge, implementing Knowledge Management Systems will help MSMEs streamline information gathering, storage, and distribution, and transform tacit-to-explicit knowledge.
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