Investigating the Relationship Between Knowledge Management Dimensions and Organizational Performance: The Mediating Effect of Organizational Innovation

Knowledge and innovation are essential for organizational success. For this reason, organizations are seeking for processes to transform knowledge into better organizational performance. On the other hand, it seems that the relationship between the knowledge management process and performance is more complex than a simple direct relationship, because knowledge must be institutionalized in the organization to improve performance. This institutionalization may be achieved through organizational innovation, which can often facilitate these processes. Therefore, the purpose of this study is to examine the relationship between knowledge management processes, organizational innovation and organizational performance, which has been done in the case of the cement industry. For this purpose, three standard questionnaires of knowledge management (Cronbach's alpha= 0.730), organizational performance (Cronbach's alpha = 0.714) and organizational innovation (Cronbach's alpha = 0.750) were used to collect information from a sample of 385 cement industry employees from six provinces. Data analysis was done using SPSSwin18 and Smart PLS.5 software in the form of descriptive statistics and structural equation model. The results showed the low level of knowledge management and organizational innovation in the studied companies. The findings of the structural equation model showed that knowledge management (β=0.417, P<0.01) and organizational innovation(β=0.427, P<0.01) have a positive and significant effect on organizational performance. In addition, organizational innovation plays a mediating role in the relationship between knowledge management and organizational performance(β=0.331, P<0.01). It is suggested that organizations that have a high ability to manage their knowledge use their resources efficiently and provide more innovation to improve their performance.