• Posted Feb. 18, 2020

Study: The Role of Knowledge Management in the Relationship between IT Capability and Interorganizational Performance – An Empirical Investigation

Problem:

Research has long posited that the relationship between IT and performance can be explained by investigating overlooked key capabilities that are enabled by IT. These connections are especially not well understood in an inter-organizational (IO) context.

Firms that develop competency in managing knowledge resources across their supply chains are rewarded with higher economic benefits. A major challenge in managing IO knowledge are the competing, and often conflicting, goals of firms in the partnership. The key to dealing with this challenge may lie in the use of IT to enable better inter-firm relationships.

How it was studied:

We investigate the role of relational and KM capabilities in the link between IT and performance in organizational partnerships. We develop and test a comprehensive empirical conceptualization of KM capabilities that refers to the management of “business knowledge,” including the collection, organization, synthesis, and use of business data, information, and insights by the partnering firms. We investigate the role of partner interdependence on IO IT, KM, and performance.

Take away:

We demonstrate empirically that IO IT creates value for the partnership. Improved IO relationships in turn strengthen IO KM. The ability of partner firms to collectively manage knowledge resources positively impacts the operational and the strategic performance of the partnership. When the interdependence between IO partners is stronger, partner firms can achieve greater KM benefits by investing more in their relational capabilities, such as building trust and long-term orientation and fostering collaborative partnerships. Our study shows that IO relational capability and IO KM are important missing links that can explain the impact of IT on performance.