Knowledge Exploitation and Knowledge Exploration for Sustainable Performance of Smes

Sustainability of small and medium enterprises has always remained a big question, especially for developing countries. This study has been conducted to identify the role of knowledge management, which is considered compulsory for the sustainable performance of small and medium enterprises. Furthermore, the study examined the moderating role of interactive performance management. For identifying the framework, data has been collected through adopted questionnaires and structural equation modelling has been applied over the collected data from 100 small and medium enterprises operating in Sialkot, Pakistan. The findings revealed that knowledge exploitation and knowledge exploration have a significant positive impact on the performance of small and medium enterprises. Likewise, interactive performance management has also a significant direct impact, however, the moderating role of interactive performance management is negative and insignificant over the relationship between knowledge exploitation and sustainable performance, yet it affects the direct relationship and makes it insignificant. On the other hand, the moderating role of interactive performance management is positive and insignificant over the relationship between knowledge exploration and sustainable performance. The findings are significant for the policymakers as well as academicians as the findings highlight the importance of knowledge exploitation, knowledge exploration, and interactive performance management which is usually ignored by the owners of small and medium enterprises in developing countries like Pakistan.