Knowledge management, innovation and firm performance

Purpose To provide important empirical evidence to support the role of knowledge management within firms. Design/methodology/approach Data were collected using a mail survey sent to CEOs representing firms with 50 or more employees from a cross‐section of industries. A total of 1,743 surveys were mailed out and 443 were returned and usable (27.8 percent response rate). The sample was checked for response and non‐response bias. Hypotheses were tested using structural equation modelling. Findings This paper presents knowledge management as a coordinating mechanism. Empirical evidence supports the view that a firm with a knowledge management capability will use resources more efficiently and so will be more innovative and perform better. Research limitations/implications The sample slightly over‐represented larger firms. Data were also collected in New Zealand. As with most studies, it is important to replicate this study in different contexts. Practical implications Knowledge management is embraced in many organizations and requires a business case to justify expenditure on programs to implement knowledge management behaviours and practices or hardware and software solutions. This paper provides support for the importance of knowledge management to enhance innovation and performance. Originality/value This paper is one of the first to find empirical support for the role of knowledge management within firms. Further, the positioning of knowledge management as a coordinating mechanism is also an important contribution to our thinking on this topic.