The Impacts of KM-Centred Strategies and Practices on Innovation: A Survey Study of R&D Firms in Malaysia

Aim/Purpose: The aim of this paper is to examine the influences of KM-centred strategies on innovation capability among Malaysian R&D firms. It also deepens understanding of the pathways and conditions to improve the innovation capability by assessing the mediating role of both KM practices, i.e., knowledge exploration practices, and knowledge exploitation practices. Background: Knowledge is the main organisational resource that is able to generate a competitive advantage through innovation. It is a critical success driver for both knowledge exploration and exploitation for firms to achieve sustainable competitive advantages. Methodology: A total of 320 questionnaires were disseminated to Malaysian R&D firms and the response rate was 47 percent. The paper utilised structural equation modelling and cross-sectional design to test hypotheses in the proposed research model. Contribution: This paper provides useful information and valuable initiatives in exploring the mediating role of knowledge exploration and knowledge exploitation in influencing innovation in Malaysian R&D firms. It helps R&D firms to frame their KM activities to drive the capability of creating and retaining a greater value onto their core business competencies. Findings: The findings indicate that all three KM-centred strategies (leadership, HR practices, and culture) have a direct effect on innovation. In addition, KM exploration practices mediate HR practices on innovation while KM exploitation mediates both leadership and HR practices on innovation. Recommendations for Practitioners: This paper serves as a guide for R&D managers to determine the gaps and appropriate actions to collectively achieve the desired R&D results and national innovation. It helps R&D firms frame their KM activities to enhance the capability of creating and retaining a greater value to their core business competencies. Recommendation for Researchers: This paper contributes significantly to knowledge management and innovation research by establishing new associations among KM-centred strategies, i.e., leadership, HR practices, and culture, both KM practices (knowledge exploration and knowledge exploitation), and innovation. Impact on Society: This paper highlights the important role of knowledge leaders and the practice of effective HR practices to help R&D firms to create a positive environment that facilitates both knowledge exploration and knowledge exploitation in enhancing innovation capabilities. Future Research: Further research could use a longitudinal sample to examine relationships of causality, offering a more comprehensive view of the effect of KM factors on innovation over the long term. Future research should also try to incorporate information from new external sources, such as customers or suppliers.