The Effect of Digitalization on Innovation Capabilities through the Lenses of the Knowledge Management Strategy

Abstract

In recent years, the knowledge management approach of the firm has emerged as the central theoretical perspective intended to address the question of adaptation to technological change. As for theoretical and practical implications, we proposed a comprehensive model that provides an integrative outlook on how the relationships between digitalization and knowledge management strategy predetermine the business results of the firm. To this purpose, we empirically analyzed the effect of digitalization on knowledge management, and how this contributes to the improvement of the company’s results in the IT, technology, consulting, and programming sectors by testing the hypotheses through the Partial Least Squares (PLS) approach to Structural Equation Modeling (SEM). A group of 620 companies was targeted for collecting the data by quantitative means of analysis—a questionnaire. The final sample was composed of 78 companies, which corresponds to 12.58% (response rate). The research findings offer an explicit foundation, on which to base future research efforts in evaluating the ways companies should approach digital transformation, strengthen the knowledge management role in this process, develop the digital and innovation capabilities, and finally, ameliorate the effects on business performance, what also represents a certain value for the executives or individuals in the workplace.

Knowledge transfer and innovation incubators: the context of the European Union

“…Sánchez Ramírez et al (2022) considered that making technological decisions for the development of new products and processes promotes the innovative capacity of companies, allowing them to satisfy the needs of a constantly changing market. Conversely, internally developed innovations or absorbed by companies provide an opportunity to shape or react actively to technological transitions.…”

Analysis of the impact of knowledge management on the financial performance of companies in Vojvodina

“…Knowledge management can be used as a method to improve the innovation capabilities of a company. From this point of view, the knowledge management process focuses on recording data and their interpretation through teamwork and empowerment, promoting the development of innovation capabilities in organizations (Nathan et al, 2019;Sanchez et al, 2022). Innovative capabilities of the organization that are developed through the application of knowledge in business…”

“…Many authors investigate the cause and effect relationships between good financial practices, knowledge management and financial performance (Atkociuniene et al, 2023;Bettiol et al, 2022;Jayanaga & Azaryas Chen, 2023;Lihn, 2022;Sanchez et al, 2022). These relationships and their importance can be highlighted in modern organizations, especially when it comes to knowledge-based organizations, the formation of which is one of the goals of knowledge management.…”

Reluctant Innovators: Dynamic Capabilities and Digital Transformation of Italian Opera Houses in the Pandemic Crisis

“…Adoption will be faster when innovation is perceived "to fit the organization's improvement trajectory" (Steiber et al 2020, p. 813). Thus, digital transformation is decisively influenced by the digital mindset of the organization (Solberg et al 2020) and by knowledge management strategies (Sánchez Ramírez et al 2022).…”