Journal of Entrepreneurship and Innovation Research

Journal of Entrepreneurship and Innovation Research

The effect of knowledge management dimensions on innovation in small and medium entrepreneurial firms

Document Type : Original Article

Authors
Masood Ekhlasi 1
Taraneh Farokhmanesh 2
Ali Davari 3
1 PhD Student in Entrepreneurship, Caspin International Campus, University of Tehran, Rezvanshahr, Gilan, Iran.
2 Family Business and Community-oriented Innovation Department, Faculty of Family Science, University of Teheran, Tehran, Iran.
3 Department of Business Creation, Faculty of Entrepreneurship, University of Tehran, Tehran, Iran.
10.22034/eir.2024.479712.1106
Abstract
Objective:The main objective of this research is to analyze how KM processes influence innovation in SMEs. The study seeks to bridge the gap in the literature by focusing on SMEs, especially in developing economies, where KM practices are not as widely adopted as in larger corporations. Despite the recognized potential of KM to enhance innovation (Imran et al., 2019), there is limited empirical research on its role in SMEs, particularly in resource-constrained environments (Valdez-Juárez et al., 2016). This research aims to fill that gap by assessing the effectiveness of knowledge acquisition, dissemination, and responsiveness in driving innovation..
Method: A quantitative research design was employed to examine the relationships between KM processes and innovation. Data were collected from 307 SMEs through structured questionnaires, which measured KM practices and innovation using a five-point Likert scale. The survey data were analyzed using structural equation modeling (SEM) to test the proposed relationships and hypotheses. This method allows for a comprehensive examination of the complex relationships between KM processes and innovation (Obeidat et al., 2016). Reliability and validity were ensured through the use of Cronbach’s alpha for internal consistency and confirmatory factor analysis for construct validity (Rahman et al., 2009).
Results: The findings of the study reveal that all three KM processes—knowledge acquisition, dissemination, and responsiveness—positively impact innovation in SMEs. Knowledge acquisition was found to have the strongest influence, as SMEs that actively acquire knowledge from both internal and external sources are better positioned to innovate (Gui & Lee, 2024). Knowledge dissemination, or the sharing of information across the organization, also plays a crucial role in ensuring that employees can access the knowledge needed for innovation (Shehzad et al., 2021). Finally, responsiveness to new knowledge allows firms to integrate and apply insights effectively, fostering continuous innovation (Zack et al., 2009). These results suggest that SMEs can overcome their resource limitations by adopting robust KM practices, which can enhance their ability to innovate and compete in dynamic markets. The study supports the findings of previous research that KM processes are integral to organizational innovation (Obeidat et al., 2016; Imran et al., 2019). However, it adds new insights by demonstrating that even in resource-constrained environments, SMEs can leverage KM to drive innovation. Future research should explore additional KM dimensions and investigate how these processes influence different types of innovation in SMEs
Keywords
Knowledge Management
Small and Medium Firms
Innovation
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