The Impact of Business and Knowledge Management Strategies on Business Performance: The Moderating Role of Strategic Fit

Davoud Khani; Kamal  Ghalandari

Authors

Davoud Khani Assistant Professor, Department of Management, Payame Noor University, Tehran, Iran Corresponding author https://orcid.org/0000-0002-3747-0757
Kamal Ghalandari Assistant Professor, Department of Business Management, Payame Noor University, Tehran, Iran Author https://orcid.org/0000-0001-9660-2687

Keywords:

Business Performance (BP), Business Strategy (BS), Knowledge Management Strategy (KMS), Strategic Fit (SF)

Abstract

The purpose of this study was to examine the moderating effect of strategic fit on the relationships between business strategy (innovation and competitive advantage) and knowledge management strategy (codification and personalization) with business performance. The study adopted a quantitative survey design, employed non-probability sampling, and was grounded in configuration theory. The questionnaire was distributed among senior employees involved in strategy formulation in trading companies located in the northwestern region of the country. A total of 420 questionnaires were distributed, of which 385 valid questionnaires were returned and used for analysis. The data were analyzed using partial least squares structural equation modeling (PLS-SEM) in SmartPLS 3, with bootstrapping based on 3,000 resamples. The results indicate that both business strategy (innovation and competitive advantage) and knowledge management strategy (codification and personalization) have positive and significant effects on business performance. Strategic fit positively and significantly moderates the relationships of both strategies with business performance and also has a positive direct effect on business performance. Furthermore, the model explains 66% of the variance in business performance. The study is limited to a single method (survey), one industry, and one country and examines only two exogenous variables. Future studies may employ mixed-methods designs, investigate other industries, incorporate a broader range of business strategies, and examine codification and personalization strategies separately. This study extends our understanding of the importance of strategic fit in determining business performance. During the strategy formulation stage, managers should emphasize strategic fit between business strategy and knowledge management strategy and carefully assess the feasibility of a new strategy prior to implementation in order to prevent strategic failure.

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