Knowledge Management And Export Performance Among Malaysian SMEs: A Theoretical Framework

Abstract

The strong bonding between SMEs and nation’s economy caused the rise of attention towards the SMEs’ development. However, SMEs in Malaysia are not developed in the full strength. Organizations that are not developed well will suffer and struggle in surviving in this competitive market as the commerce is changing rapidly. It is believed that the value and resources that carried by knowledge could help, guide and lead organization in gaining competitive advantage in the market. As such, knowledge works as the asset and capital in driving the organization’s success. Besides knowledge, innovation helps organization to reshape and reinvest themselves that could standstill in the competitive emerging market. Innovation works in producing a new and creative idea in implementing new products or enhancement on the existing products which could help to improve the organizational performance. This study examines the relationship between knowledge management and export performance among SMEs in Malaysia, mediated by innovation. This paper focuses on the manufacturing industry of SMEs. There are three dimensions of knowledge management in this study, namely, knowledge acquisition, knowledge dissemination and knowledge application. This study anticipates that the three dimension of knowledge management are critical antecedents on the export performance which could lead to positive relationship with the export performance of SMEs. The findings of the study provide an insight towards the organizations which could lead them in identifying effective strategies and helps in improving their export performance.

Keywords: SMEsknowledge managementknowledge acquisitionknowledge disseminationknowledge applicationexport performance

Introduction

Export performance help to determine the wealth of a kingdom and play an essential role in helping an organization to create the positional benefit in the market (Porter, 1985). Besides that, manufacturing industry emerge as a speeding altering industry and performs a necessary function towards the country. The competitive market and fast changing technology in the market stressed the manufacturing industries to create more value and resources to the customers. In order to continue to be in the competitive market, organizations begin to reinvest and reshape themselves. In conjunction with this, a quantity of studies highlighted product and process innovation in exploring innovation.

Besides that, knowledge management is extensively used within the business market to the extent of export performance or business performance (Suraj & Ajiferuke, 2013; Tseng, 2014; Yang et al., 2012). Nazari and Emami (2012) mentioned that knowledge management allows the organization to get the knowledge and utilize the information and data well. Knowledge management is likewise regarded as the most integral asset for organization as knowledge is vital for business to gain positional benefit in the aggressive market (Sarkindaji et al., 2014). Daud and Yusoff (2010) mentioned that the concept of knowledge management started to enforce in Malaysia at some stage in the late nineties when Microsoft delivered in knowledge when they start their business in Malaysia. In conjunction with this, Malaysia government implemented Knowledge Economy Master Plan in order to achieve the aim in remodelling Malaysia into a knowledge-based economy.

In addition, a few SMEs are still confronted the loss of utility, information and capabilities, restricted to admission of applicable facts on era and dependency on bad and obsolete technology. Moreover, SME’s viable to innovate is constrained to knowledge and available facilities are insufficient and inefficient. Other than that, the perception at the results of KM in the direction of the business performance is still present process development wherein further research is needed to develop the expertise of KM in the direction of business overall performance. Therefore, it is vital to decide how knowledge management is executed among SMEs and how the knowledge management and innovation affect the export overall performance in SMEs.

Hashim and Abdullah (2000) pointed out that the definitions of SMEs in Malaysia is based on the quantitative measure such as number of workers, volume of capital and sales. Therefore, SMEs in Malaysia are classified into several group such as Micro, Small or Medium depending on their number of workers, sales and capital.

SME Corp 2018 defined manufacturing region in SMEs Malaysia which involved the sales turnover not exceeding RM 50 million in addition to the total-time employees is not greater than two hundred employees. Besides that, Mustapha et al. (2011) mentioned that there are several activities within the manufacturing sectors of SMEs Malaysia including manufacturing and processing of uncooked materials, petroleum, chemical, rubber and plastic products, meals, drinks and tobacco products, non-metal mineral products, fundamental metals and fabricated metallic products and manufacturing of electrical and electronics appliances.

Problem Statement

SME Corp Malaysia located out that SMEs in Malaysia are dealing with numerous demanding situations in such low productiveness, low business formation, small variety number of excessive growth organization in contributing to the monetary system and the economy lifecycle. These characteristics might lead to the low usal performance of SMEs in Malaysia. According to SME Corp Malaysia (2018), SMEs in Malaysia has the low productiveness wherein the productivity whereby the productiveness in line with employee averaged RM 47000. Some SMEs are nonetheless faced lack of application knowledge and skills, limited access to relevant facts on era and dependency on terrible and obsolete technology. According to SME Corp Malaysia CEO, Datuk Dr. Hafsah, SMEs regularly lack time, manpower and investment in conducting studies and improvement. For them, research and improvement is considered as a value than as a funding.

Even though there are numerous studies which have been carried out on the business performance amongst SMEs regarding on knowledge management, the field nevertheless loss of exploration at the impact of knowledge management towards export performance. It is likewise despite that the fact that not surely understood concerning the impact of KM within the organizations. Although it is far found that there is some researcher’s awareness at the knowledge management towards the export performance amongst SMEs, the end result are blended and now no longer uniform.

Apart from it, the perception at the outcome of KM toward the export overall performance stays undergoing development in which similarly studies is needed with the intention to increase the know-how of KM towards export overall performance. In quick, there is a need to determine the relationship amongst KM and export performance among SMEs.

Research Questions

This research is carried out to examine the relationship between the dimensions of knowledge management and the export performance among SMEs in Malaysia and mediated by innovation. While the study is conducted, several questions are being asked as below:

• Is there any relationship between knowledge acquisition and innovation among SMEs in Malaysia?

• Is there any relationship between knowledge dissemination and innovation among SMEs in Malaysia?

• Is there any relationship between knowledge application and innovation among SMEs in Malaysia?

• Is there any relationship between innovation and export performance among SMEs in Malaysia?

Purpose of the Study

The primary purpose of this study is to introduce the critical of knowledge management and innovation amongst SMEs in Malaysia. This research geared toward analysing the scale of KM which could impact upon the export performance amongst SMEs which is mediated with the aid of innovation. It goals to take a look at whether or not there may be a relationship among the dimensions of KM, innovation and export performance among SMEs. The study intends to cope with the inadequate level of empirical findings regarding the impact of the expertise control toward the export performance amongst SMEs in Malaysia. Since the finding on the relationship are blended, this studies goals to offer extra results to existing researchers to ensure the connection more convincing.

Research Methods

Academic databases were explored to retrieve literature for the study. Areas related to innovation, organizational performance, and competitive advantage of the organizations were examined. Databases such as ScienceDirect, utmj.org, nih.gov, nchu.edu.tw, palgrave-journals were explored, and keywords such as SMEs, Malaysia, competitive advantage, innovation, organization performance, export performance of SMEs, resource-based view, knowledge-based view etc. were used to retrieve literature related to the study. The Google Scholar search engine, as well as institution databases such as web of science, Scopus, ProQuest etc. were searched to retrieve facts and figures and academic literature the study. Scientific research databases were explored to identify and elaborate the research variables used in the conceptual model. Databases searched for research variables were ScienceDirect, sage pub, jcu.edu.au, tamu.edu. To obtain the facts, figures and estimations about export performance of the SMEs in Malaysia, different types of sources were explored such as industry reports, government reports, market research reports, media reports, and internet sources. To retrieve literature related to variables, only scientific literature of high quality was examined.

Findings

The courting between the expertise control and export performance amongst SMEs Malaysia is decided thru this study. There are numerous researches being performed by using the students in determining the connection among the innovation and business overall performance. For example, a study that was performed through Nawab et al. (2015) concerning the connection the knowledge management and innovation in the banking enterprise. The results of the observe display that there is a positive relationship between knowledge management and innovation. A observe that was conducted with the aid of Hurmelinna-Laukkanen (2011) in determining the connection among knowledge sharing and innovation performance which involve studies and improvement in Finland suggests the positive relation. Besides that, Foster et al. (2008) executed the studies and convey out the evidence that innovation is the dominant component in determining firm’s survival and productivity. Chong et al. (2011) proved that a company without innovation will result in bad organization overall performance. In this study, three dimensions of knowledge management, namely, knowledge acquisition, knowledge dissemination and knowledge application are carried out in order to test the impact towards SMEs overall performance wherein innovation works as the mediator. Besides that, conceptual framework is discussed as shown at Figure 01 as below. The framework consists of four constructs. There are three independent variables (IV), namely knowledge acquisition, knowledge dissemination and knowledge application while export performance works as the dependent variable (DV) in this study. At the same time, product and service innovation is the mediator in this study.

Innovation

Ndalira et al. (2013) conducted a research to determine the effect of innovation towards SMEs’ business performance in Kenya. Throughout the study, researchers found out the innovation shows a direct relationship towards business performance of SMEs in Kenya. Based on the past research above, P4 is developed to understand the relationship between knowledge dissemination, innovation and export performance among SMEs in Malaysia.

Proposition 4: There is a positive relationship between innovation and export performance among SMEs in Malaysia.

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Conclusion

This research was carried out with a purpose to perceive the scale of KM that influence business export performance among SMEs in Malaysia. Therefore, the result achieve from the research could advantage and used as a guideline for SMEs which keen in paying interest on KM to improve their company’s export overall performance. It also can provide a basis for understanding the impact of innovation at the hyperlink between KM and export performance. In addition, this study can also offer a pool of knowledge on the importance of KM in affecting the export performance among SMEs. If this knowledge is well managed, the organization will bring about above performance. Others than that, this study additionally may be utilized by other academician or students as a reference for similarly studies concerning KM and export performance among SMEs. Furthermore, this study also can be used because the springing board for further studies in KM and export performance. From this study, it is hoped that it could supply the beneficial information to all SMEs and hopefully can be business consulting to them.

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