Linking Business Strategy and Knowledge Management Capabilities for Organizational Effectiveness

The effective management of knowledge resources is a key imperative for firms that want to leverage their knowledge assets for competitive advantage and improved performance. However, most firms do not attain the required performance levels even when programs are in place for managing knowledge resources. Research suggests this shortcoming can be addressed by linking knowledge management to business strategy. This study examines a model that links business strategy to knowledge management capabilities and organizational effectiveness. Using data collected from 189 managers, the results suggest that business strategy is a key driver of knowledge capabilities, and that both business strategy and knowledge capabilities impact organizational effectiveness. Additionally, the authors’ findings indicate that knowledge infrastructure capability is a key imperative for effective knowledge process capability. Managerial implications, limitations and opportunities for future research are also discussed.