Knowledge Management as a Strategic Tool to Foster Innovativeness of SMEs

Haibo Zhou and Lorraine Uhlaner

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: This study examines the relationship between knowledge management (KM) (in terms of external acquisition and internal sharing) and innovation behavior. The concept of absorptive capacity and assumptions from the dynamic capabilities view underlie the proposed framework and hypotheses. The framework is empirically tested using a random sample of 649 Dutch small to medium sized enterprises (SMEs). Our empricial results indicate that external acquisition practices play a key role in fostering SMEs’ innovativeness while internal sharing practices do not appear to have a significant influence. External acquisition activity enhances a firm’s awareness of available knowledge opportunities. Firms which actively acquire external knowledge (regardless of the type of knowledge) may build a greater competitive dynamic capability to sense and seize business opportunities which in turn may lead to new or improved products or processes. We suggest that owners/entrepreneurs of SMEs and their firms will benefit in the long term if they strategically manage knowledge, especially using external acquisition practices.

Keywords: SMEs; absorptive capacity; innovation behavior; innovation orientation; knowledge management (search for similar items in EconPapers)
JEL-codes: D83 M M13 O31 O32 (search for similar items in EconPapers)
Date: 2009-05-11
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Citations: View citations in EconPapers (2)

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