Knowledge management and financial performance in transitional economies: the case of Serbian enterprises
In this paper the impact and predictive effects of knowledge management on financial performance are analysed. The research also includes an analysis of the moderating effects of two moderators (National Origin and Enterprise Size) and their relationship. The data was gathered by interviewing 520 managers from manufacturing companies operating in Serbia. The most important conclusions of the research are: 1. High levels of knowledge management positively influence business performance, quality and competitiveness. 2. Financial performance is mainly influenced by the dimensions connected to the effects of knowledge management regarding its implementation and protection and the acquisition of competitive advantages. 3. Knowledge management strongly influences the market aspects of business, but also the increase of fixed assets. 4. Knowledge management has a slightly greater impact on financial performance in foreign enterprises (operating in Serbia) compared to domestic (Serbian) enterprises. The situation is similar when comparing medium and large enterprises (a higher impact) with small enterprises (a smaller impact). 5. The greatest effects are achieved when an effective organizational structure is in place, when the organization protects its knowledge, when it manages to materialize the knowledge gathered in the form of the efficient application of knowledge.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abdi, K., Mardani, A., Senin, A. A., Tupenaite, L., Naimaviciene, J., Kanapeckiene, L., & Kutut, V. (2018). The effect of knowledge management, organizational culture and organizational learning on innovation in automotive industry. Journal of Business Economics and Management, 19(1), 1–19. https://doi.org/10.3846/jbem.2018.1477
Allameh, S. M. (2018). Antecedents and consequences of intellectual capital: The role of social capital, knowledge sharing and innovation. Journal of Intellectual Capital, 19(5), 858–874. https://doi.org/10.1108/JIC-05-2017-0068
American Productivity and Quality Center. (1998). Knowledge management and the learning organization: A European perspective. APQC.
Bontis, N., Dragonetti, N. C., Jacobsen, K., & Roos, G. (1999). The knowledge toolbox: A review of the tools available to measure and manage intangible resources. European Management Journal, 17(4), 391–402. https://doi.org/10.1016/S0263-2373(99)00019-5
Byrd, T., & Turner, D. (2001). An exploratory examination of the relationship between flexible IT infrastructure and competitive advantage. Information and Management, 39(1), 41–52. https://doi.org/10.1016/S0378-7206(01)00078-7
Chen, C., & Huang, J. (2009). Strategic human resource practices and innovation performance – The mediating role of knowledge management capacity. Journal of Business Research, 62(1), 104–114. https://doi.org/10.1016/j.jbusres.2007.11.016
Crema, M., & Verbano, C. (2016). Managing intellectual capital in Italian manufacturing SMEs. Creativity and Innovation Management, 25(3), 408–421. https://doi.org/10.1111/caim.12074
Dang, C., Le-Hoai, L., & Kim, S. Y. (2018). Impact of knowledge enabling factors on organizational effectiveness in construction companies. Journal of Knowledge Management, 22(4), 759–780. https://doi.org/10.1108/JKM-08-2016-0350
Darroch, J. (2005). Knowledge management, innovation and firm performance. Journal of Knowledge Management, 9(3), 101–115. https://doi.org/10.1108/13673270510602809
Darroch, J., & McNaughton, R. (2002). Examining the link between knowledge management practices and types of innovation. Journal of Intellectual Capital, 3(3), 210–222. https://doi.org/10.1108/14691930210435570
Davenport, H. T., & ve Prusak, L. (2000). İş dünyasında bilgi yönetimi: Kuruluşlar ellerindeki bilgiyi nasıl yönetirler? Çev. Günhan Günay. Rota Yayın. https://www.kitapyurdu.com/kitap/is-dunyasinda-bilgi-yonetimi-kuruluslar-ellerindeki-bilgiyi-nasil-yonetirler/31034.htm
Dzenopoljac, V., Yaacoub, C., Elkanj, N., & Bontis, N. (2017). Impact of intellectual capital on corporate performance: Evidence from the Arab region. Journal of Intellectual Capital, 18(4), 884–903. https://doi.org/10.1108/JIC-01-2017-0014
Echeverry, C., Herrera, O., & Velez, A. (2019). Knowledge management from the organizational culture in call centers in Manizales. Cuadernos de Administracion, 35(63), 15–25. https://doi.org/10.25100/cdea.v35i63.6811
Fathi, S., Farahmand, S., & Khorasani, M. (2013). Impact of intellectual capital on financial performance. International Journal of Academic Research in Economics and Management Sciences, 2(1), 6–17. https://www.researchgate.net/publication/331687713_Impact_of_intellectual_capital_on_financial_performance
Ferramosca, S., & Ghio, A. (2018). Leveraging intellectual capital in developing countries: evidence from Kenya. Journal of Intellectual Capital, 19(3), 562–580. https://doi.org/10.1108/JIC-11-2016-0109
Gross-Golacka, E., Kusterka-Jefmanska, M., & Jefmanski, B. (2020). Can elements of intellectual capital improve business sustainability? The perspective of managers of SMEs in Poland. Sustainability, 12(4), 1545. https://doi.org/10.3390/su12041545
Hermawan, S., Hariyanto, W., & Biduri, S. (2020). Intellectual capital, business performance, and competitive advantage: An empirical study for the pharmaceutical companies. QUALITY Access to Success, 21(175), 103–106.
Huang, Y., Yan, A., & Smith, R. (2019). Methodology for the development of knowledge management on organizational performance based on employees’ professional competence. Revista de Cercetare Si Interventie Sociala, 64, 85–96. https://doi.org/10.33788/rcis.64.7
Imran, M., Bilal, A., Aslam, U., & Rahman, U. (2017). Knowledge management strategy: An organizational change prospective. Journal of Enterprise Information Management, 30(2), 335–351. https://doi.org/10.1108/JEIM-10-2015-0095
James, P. (2005). Knowledge asset management: The strategic management and knowledge management nexus [DBA thesis]. Southern Cross University. https://researchportal.scu.edu.au/esploro/outputs/doctoral/Knowledge-asset-manage-ment--the-strategic-management-and-knowledge-management-nexus/991012821396602368
Jordão, R. V. D., & de Almeida, V. R. (2017). Performance measurement, intellectual capital and financial sustainability. Journal of Intellectual Capital, 18(3), 643–666. https://doi.org/10.1108/JIC-11-2016-0115
Joshi, M., Cahill, D., Sidhu, J., & Kansal, M. (2013). Intellectual capital and financial performance: An evaluation of the Australian financial sector. Journal of Intellectual Capital, 14(2), 264–285. https://doi.org/10.1108/14691931311323887
Kianto, A., Andreeva, T., & Pavlov, Y. (2013). The impact of intellectual capital management on company competitiveness and financial performance. Knowledge Management Research & Practice, 11(2), 112–122. https://doi.org/10.1057/kmrp.2013.9
Kongpichayanond, P. (2009). Knowledge management for sustained competitive advantage in mergers and acquisitions. Advances in Developing Human Resources, 11(3), 375–87. https://doi.org/10.1177/1523422309339725
Lee, C., Ho, C., & Chiu, Y. (2008). The impact of knowledge management enablers on non-financial performance in small and medium enterprises. International Journal of Technology Management, 43(1–3), 266–283. https://doi.org/10.1504/IJTM.2008.019419
Lee, I. A. (2008). Relationship between the use of information technology and performances of human resourses management [PhD Thesis]. Alliant International University. San Diego, CA.
Lee, K., Lee, S., & Kang, I. (2005). KMPI: Measuring knowledge management per-formance. Information & Management, 43(3), 469–482. https://doi.org/10.1016/j.im.2004.02.003
Liu, G., & Ren, H. (2019). Organizational learning and job satisfaction of trainee auditors: A case study of Chinese CPA firms. Accounting Research Journal, 32(2), 70–87. https://doi.org/10.1108/ARJ-04-2016-0049
Lopez, S., Peón, J., & Ordás, C. (2005). Organizational learning as a determining factor in business performance. The Learning Organization, 12(3), 227–245. https://doi.org/10.1108/09696470510592494
Madella, A., Bayle, E., & Tome, J.-L. (2005). The organizational performance of national swimming federations in mediterranean countries: A comparative approach. European Journal of Sport Science, 5(4), 207–220. https://doi.org/10.1080/17461390500344644
Maditinos, D., Chatzoudes, D., Tsairidis, C., & Theriou, G. (2011). The impact of intellectual capital on firms’ market value and financial performance. Journal of Intellectual Capital, 12(1), 132–151. https://doi.org/10.1108/14691931111097944
Mageswari, S., Sivasubramanian, R., & Dath, T. (2017). A comprehensive analysis of knowledge management in Indian manufacturing companies. Journal of Manufacturing Technology Management, 28(4), 506–530. https://doi.org/10.1108/JMTM-08-2016-0107
Martin, J. (1998). The knowledge era. DM Review Magazine.
Massa, S., & Testa, S. (2009). A knowledge management approach to organizational competitive advantage: Evidence from the food sector. European Management Journal, 27(2), 129–141. https://doi.org/10.1016/j.emj.2008.06.005
Mondal, A., & Ghosh, S. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, 13(4), 515–530. https://doi.org/10.1108/14691931211276115
Najmi, K., Kadir, A., & Kadir, M. (2018). Mediation effect of dynamic capability in the relationship between knowledge management and strategic leadership on organizational performance accountability. International Journal of Law and Management, 60(2), 517–529. https://doi.org/10.1108/IJLMA-01-2017-0004
Nguyen, T. N. Q. (2010). Knowledge management capability and competitive advantage: An empirical study of Vietnamese enterprises [PhD thesis]. Southern Cross University. Lismore, NSW. http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=305818D05BAB4E5638D9AB6D6BCE453A?doi=10.1.1.682.6586&rep=rep1&type=pdf
Ouekouak, M. L., Ouedraogo, N. & Mbengue, A. (2014). The mediating role of organizational capabilities in the relationship between middle managers’ involvement and firm performance: A European study. European Management Journal, 32(2), 305–318. https://doi.org/10.1016/j.emj.2013.03.002
Prieto, I., & Revilla, E. (2006). Learning capability and business performance: A non‐financial and financial assessment. The Learning Organization, 13(2), 166–185. https://doi.org/10.1108/09696470610645494
Razzaq, S., Shujahat, M., Hussain, S., Nawaz, F., Wang, M., Ali, M., & Tehseen, S. (2019). Knowledge management, organizational commitment and knowledge-worker performance: The neglected role of knowledge management in the public sector. Business Process Management Journal, 25(5), 923–947. https://doi.org/10.1108/BPMJ-03-2018-0079
Sabău Popa, D. C., Popa, D. N., Bogdan, V., & Simut, R. (2021). Composite financial performance index prediction – a neural networks approach. Journal of Business Economics and Management, 22(2), 277–296. https://doi.org/10.3846/jbem.2021.14000
Sanchez, V. (2018). Self-employment, knowledge and economic growth: An empirical study for Latin American countries. Contemporary Economics, 12(4), 473–484. https://www.researchgate.net/publication/330698900_Self-employment_knowledge_and_economic_growth_An_empirical_study_for_Latin_American_countries
Schermerhorn, J. R. Jr, Hunt, J. M., & Osborn, R. N. (2002). Organizational behavior (7th ed.). Wiley.
Sharma, S., & Dharni, K. (2017). Intellectual capital disclosures in an emerging economy: Status and trends. Journal of Intellectual Capital, 18(4), 868–883. https://doi.org/10.1108/JIC-09-2016-0092
Shockley, W. (2000). Planning for knowledge management. Quality Progress, 33(3), 57–64. https://quality-texas.org/wp-content/uploads/2014/11/Knowledge-Management.pdf
Tan, J. J., & Litschert, R. J. (1994). Environment-strategy relationship and its performance implications: An empirical study of the Chinese electronics industry. Strategic Management Journal, 15(1), 1–20. https://doi.org/10.1002/smj.4250150102
Tonial, G., Cassol, A., Selig, P. M., & Giugliani, E. (2019). Intellectual capital management and sustainability activities in Brazilian organizations: A case study. In F. Matos, V. Vairinhos, P. M. Selig, & L. Edvinsson (Eds.), Intellectual capital management as a driver of sustainability (pp. 119–138). Springer. https://doi.org/10.1007/978-3-319-79051-0
Walters, D. (2002). Operations strategy. Palgrave Macmillan. https://doi.org/10.1007/978-1-4039-1446-0
Wang, D., Tsui, A. S., Zhang, Y., & Ma, L. (2003). Employment relationships and firm performance: Evidence from an emerging economy. Journal of Organizational Behavior, 24(5), 511–535.
Wang, H., Tsui, A. S., & Xin, K. R. (2011). CEO leadership behaviors, organizational performance, and employees’ attitudes. The Leadership Quarterly, 22(1), 92–105.
Wong, K. (2005). Critical success factors for implementing knowledge management in small and medium enterprises. Industrial Management & Data Systems, 105(3), 261–279. https://doi.org/10.1108/02635570510590101
Xu, J., & Li, J. S. (2019). The impact of intellectual capital on SMEs’ performance in China: Empirical evidence from non-high-tech vs. high-tech SMEs. Journal of Intellectual Capital, 20(4), 488–509. https://doi.org/10.1108/JIC-04-2018-0074
Xu, J., & Liu, F. (2020). The impact of intellectual capital on firm performance: A modified and extended VAIC model. Journal of Competitiveness, 12(1), 161–176. https://doi.org/10.7441/joc.2010.01.10
Xu, J., & Liu, F. (2021). Nexus between intellectual capital and financial performance: An investigation of Chinese manufacturing industry. Journal of Business Economics and Management, 22(1), 217–235. https://doi.org/10.3846/jbem.2020.13888
Xu, J., & Wang, B. H. (2018). Intellectual capital, financial performance and companies’ sustainable growth: Evidence from the Korean manufacturing industry. Sustainability, 10(12), 4651. https://doi.org/10.3390/su10124651
Zack, M., McKeen, J., & Singh, S. (2009). Knowledge management and organizational performance: An exploratory analysis. Journal of Knowledge Manage-ment, 13(6), 392–409. https://doi.org/10.1108/13673270910997088
Zebal, M., Ferdous, A., & Chambers, C. (2019). An integrated model of marketing knowledge – a tacit knowledge perspective. Journal of Research in Marketing and Entrepreneurship, 21(1), 2–18. https://doi.org/10.1108/JRME-03-2018-0018