Knowledge management, organizational learning, market orientation and market performance

Abstract

Market performance is a measurement system that is expected to cover all aspects of organizational performance in the marketplace and to be effective, it has to be relevant for the existence of an organization and the means by which it achieves growth and success. In to-day’s competitive markets, long-term market performance is increasingly associated with knowledge management, organizational learning and market orientation as knowledge-based resources. The reason for this commonality is that in the current knowledge-based revolution each of these resources is a source of competitive advantage leading to superior business performance. For some organizations practicing these three intangibles at the same time in order to improve market performance is still elusive. Review of both theoretical and empirical literature indicated that there was need for an integrative configuration of these three intangible resources other than the current divide between them. This approach provides greater depth of understanding the impact of combining knowledge-based resources to achieve superior market performance. The purpose of this study was to develop a broad concept in explaining market performance by introducing in a single model an integration of these three resources with competitive advantage as a mediator. From a review of literature; objectives, hypothesizes and a conceptual framework were developed and tested.

Based on the philosophical foundations, this research study adopted the philosophical approach of sociological positivism that is a scientific empirical method encompassing a quantitative approach and a cross-sectional survey method. The study population was a total of 11,153 organizations from which a sample size of 718 firms was established. In order to examine the basic subject matter of market performance as an exchange or transaction relationship, this study applied a multi-theory approach - combining constituency-based theory, contingency theory and the resource-based view of the firm.

Analysis of data covered among others hierarchical regression analysis, MedGraph and ModGraph – excel version programme – for testing interaction and mediation effects. The major findings were that an integration of these three intangible assets generates a significant three-way interaction effect on market performance, showing that market performance is a bigger outcome than any one of the three assets can achieve alone, or even two of them together; it takes all three to contribute substantially to achieve superior market performance. Tests for mediation confirmed that competitive advantage has a significant and partial mediation in the relationships between each predictor variable and market performance. Each predictor variable was found to be relatively important in adding to the prediction of market performance with first, market orientation followed by organizational learning and then knowledge management.

The study examines the theoretical, methodological, managerial and policy implications. It is recommended that firms build the capabilities for creating sustainable additional value for customers by simultaneously integrating these three resources; put in place internal processes and structures to collect, disseminate, learn and react to both internal and market-based information. At the national level, university-industry collaboration in research projects should be intensified.