Expert Systems with Applications 37 (2010) 10961103

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Expert Systems with Applications

journal homepage: www.elsevier.com/locate/eswa

System perspective of knowledge management, organizational learning, and organizational innovation

Shu-Hsien Liao a,1, Chi-chuan Wu b,*
a b

Graduate School of Management Sciences, Tamkang University, No. 151, Ying-chuan Rd., Tamsui, Taipei 251, Taiwan, ROC Management Sciences, Tamkang University, No. 151, Ying-chuan Rd., Tamsui, Taipei 251, Taiwan, ROC

a r t i c l e

i n f o

a b s t r a c t
In knowledge economics, enterprises need to adapt and update its knowledge to keep their capability of innovation. Therefore, the relationship between knowledge management and organizational innovation is getting an important issue in research and in practical areas. However, without good capability of organizational learning, one organizational cannot retain some important knowledge management practices in it. This study selects samples based on Common Wealth Magazines Top 1000 manufacturers and Top 100 nancial rms in 2007 by mails. A questionnaire survey was conducted and 327 valid replies were received. This research analyzes the relationship among knowledge management, as well as organizational learning and organizational innovation utilizing structural equation modeling. The results show that organizational learning is the mediating variable between knowledge management and organizational innovation. Just like a system, knowledge management is an important input, and organizational learning is a key process, then organizational innovation is a critical output. 2009 Elsevier Ltd. All rights reserved.

Keywords: Knowledge management Organizational learning Organizational innovation Mediator Structural equation modeling

1. Introduction Facing this rapid change, enterprises should adapt and update its knowledge to maintain its competitive advantages (Rademakers, 2005). However, past research showed the issues of knowledge management (KM) are complicated. Some researches are related to the competitive advantages, and some are the e-business (Lin & Lee, 2004); some are related to organizational learning, and some are organizational innovation (Darroch, 2005; Davenport & Prusak, 1998). We found that organizational learning is mixed with KM (Victor, Francisco, & Antonio, 2006), and the relationship between knowledge management and organizational learning is not evident. Reviewing past literatures, many scholars conducted the research to understand the relation among knowledge management, organizational learning, and organization innovation separately. We found few papers discussed the practical results and quantitative numbers (Darroch & MaNaughton, 2002). Based on theory, knowledge management, organizational learning, and organization innovation should not discuss separately (Goh, 2005). The immediate concern, in the relentless pursuit of innovation within a knowledge enterprise, appears to be more than just identifying and resolving issues on KM independently.

This study investigates the relationships among knowledge management, organizational learning, and organization innovation together in knowledge-intensive business. We use LISREL to model the relationships among knowledge management, organizational learning, and organization innovation based on the data sampled from 27 Taiwanese rms. These rms include electronic, and nancial insurance industries from which 327 valid samples were received. The rest of the paper is organized as follows. Section 2 reviews the literature and proposes the research map. Section 3 describes the research methodology including framework and hypotheses. Section 4 describes the data analysis and the results. Section 5 discusses managerial implications and section 6 presents a brief conclusion.

2. Literature review and hypotheses 2.1. Knowledge management Gold, Malhortra, and Segars (2001) examined the issue of effective knowledge management (KM) from the perspective of organizational capabilities. This perspective suggests that a knowledge infrastructure consisting of technology, structure, and culture along with a knowledge process architecture of acquisition, conversion, application, and protection are essential organizational capabilities or preconditions for effective knowledge manage-

* Corresponding author. Tel./fax: +886 2 25925252x2435. E-mail addresses: Michael@mail.tku.edu.tw (S.-H. Liao), ccwu@ttu.edu.tw (C.-c. Wu). 1 Tel.: +886 2 26215656x3396; fax: +886 2 26223204. 0957-4174/$ - see front matter 2009 Elsevier Ltd. All rights reserved. doi:10.1016/j.eswa.2009.06.109

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ment. The results provide a basis for understanding the competitive predisposition of a rm as it enters a program of KM. Cui, Grifth, and Cavusgil (2005) also mentioned that KM capabilities consist of three interrelated processes: knowledge acquisition, knowledge conversion, and knowledge application (Gold et al., 2001). Knowledge is not only an important resource for a rm, but also it serves as a basic source of competitive advantage (Gold et al., 2001; Grant, 1996; Jaworski & Kohli, 1993). Therefore, KM capabilities refer to the knowledge management processes in an organization that develop and use knowledge within the rm (Gold et al., 2001). From Gold et al. (2001) and Cui et al. (2005), we nd the completely knowledge management activities form the perspective of organizational capabilities. They argue that there are three main processes: acquisition, conversion, and application. Although there are still many classications of KM, this study prefer the viewpoints of organizational capabilities, and be in favor of these three dimensions in our study. 2.2. Organizational innovation The growth innovation literature provides many alternative conceptualizations and models for the interpretation of observed data. An innovation can be a new product or service, a new production process technology, a new structure or administrative system, or a new plan or program pertaining to organizational members. Therefore, organizational innovation, or innovativeness, is typically measured by the rate of the adoption of innovations, although a few studies have used other measures (Damanpour, 1991). Past research has argued that different types of innovation are necessary for understanding and identifying in organizations. Among numerous typologies of innovation advanced in the relevant literature, three have gained the most attention. Each centers on a pair of types of innovation: administrative and technical, product and process, and radical and incremental. In Wang and Ahmed (2004), they identied organizational innovation through an extensive literature. A nal 20-item measurement construct is validated through FAME Database which contains information for companies in the UK and Ireland. FAME contains information on 3.4 million companies, 2.6 million of which are in a detailed format. These ve dimensions are tested from component factors and a three-step approach. They are product innovation, market innovation, process innovation, behavioral innovation, strategic innovation. Because this measurement is tested by extensive literature collection, and precisely statistical testing, this study prefers their work to test the similar samples in Taiwan to compare the results. Very little empirical research has specically addressed antecedents and consequences of effective knowledge management (Darroch & MaNaughton, 2002). The management of knowledge is frequently identied as an important antecedent of innovation. Effective KM has been presented in the literature as one method for improving innovation and performance. While many studies have reported that KM as antecedents of innovation, none has explicitly examined the relationship between the two constructs. In Darroch (2005), we got the result that KM process would positively affect innovation. Therefore, it is fair to conclude that the relationship between KM and innovation is close related. Thus, this study propose, H1: Knowledge management will affect organizational innovation positively. 2.3. Organizational learning In this rapid change economics volatility and uncertainty, many organizations are striving to survive and remain competitive. In or-

der to develop and perform, organizational learning (OL) has been regarded as one of the strategic means of archiving long-term organizational success (Senge, 1990). One of the traditional ways to measure learning has been to use socalled learning curves (Lieberman, 1987; Yelle, 1979) and experience curves (Boston Consulting Group, 1968). However, these curves are incomplete measuring tools (Garvin, 1993, p. 89). OL is a complex multidimensional construct . . . encompassing multiple sub processes (Slater & Narver, 1994, p. 2). So, Pilar, Jose, and Ramon (2005) considered OL to be a latent multidimensional construct including managerial commitment, systems perspective, openness and experimentation, and knowledge transfer and integration. Facing the current uncertainty environment, business must keep learning to maintain its competitiveness. And, OL will develop well based on well structured knowledge in organizations. In other words, business could have OL capabilities underlying well individual learning (Takeuchi & Nonaka, 1995). The experimental experience of English enterprises, Garratt (1990) found that a learning organization is the application of organizational development and learning. In order to satisfy consumers capricious demands, organization should develop personal or group learning abilities. In order to develop learning abilities, organization should complete well KM process. Without KM, one organization cant develop personal or group learning abilities (Garratt, 1990; Su, Huang, & Hsieh, 2004). Pilar et al. (2005) also argued that knowledge and, more specifically, its acquisition or creation, along with its dissemination and integration within the organization, become a key strategic resource to OL. OL is seen as a dynamic process based on knowledge, which implies moving among the different levels of action, going from the individual to the group level, and then to the organizational level and back again (Crossan, Lane, & White, 1999; Huber, 1992). As a viewpoint of system, Ke and Wei (2006) have discussed and identied knowledge is the antecedent and base of OL. Thus, this study propose, H2: Knowledge management will affect organizational learning positively. The rms learning capabilities play a crucial role in generating innovations (Sinkula, Baker, & Noordewier, 1997). Innovation implies the generation, acceptance, and implementation of new ideas, processes, products, or services. Organizational innovation is dened as the application of ideas that are new to the rm, whether the newness is embodied in products, processes, and management or marketing systems (Weerawardena, OCass, & Julian, 2006). It is obvious that an organizational learning is closely related to organizational innovation. In Calantone, Cavusgil, and Zhao (2002), we got the conclusion that the higher the level of learning orientation, the greater the degree of rm innovativeness in American R&D mangers. In Weerawardena et al. (2006), they concluded the higher the learning the greater the organizational innovation. What one may see as drivers of the innovation processes within rms is their learning. After empirical test, they indeed veried the relationship between learning and organizational innovation. In other words, learning will inuence organizational innovation positively. Therefore, this study propose, H3: Organizational learning will inuence organizational innovation positively. From literature review, knowledge management will affect organizational learning positively (Garratt, 1990; Su et al., 2004). And organizational learning will inuence organizational innovation

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positively (Calantone et al., 2002; Weerawardena et al., 2006). Darroch (2003) also found that knowledge acquisition had more indirect than direct inuence on innovation. Therefore, this study propose, H4: Organizational learning will be a mediator between knowledge management and organizational innovation. Therefore, this study utility a perspective of system which takes knowledge management as an important input, and organizational learning as a key process, and organizational innovation as a critical output. Fig. 1 shows the perspective of system among these three constructs. According to the literatures, this study constructs the research framework which is shown in Fig. 2. After reviewing literatures, this study constructs a knowledge map in Fig. 3. Fig. 3 shows the relationships between any two variables, and the whole picture about our research. It says the relatively positions to each variable. Fig. 2 also shows: (1) Grant (1996), Gorelick and Tantawy-Monsou (2005), Pilar et al. (2005) and Ke and Wei (2006) mentioned knowledge management would

inuence organizational learning from 1996 to 2006. (2) From 1998 to 2005, Davenport and Prusak (1998) and Darroch (2005) argued that knowledge management would inuence innovation. (3) From 1998 to 2005, Hurley and Hult (1998), Mavondo, Chimhanzi, and Stewart (2005) and Weerawardena et al. (2006) claimed organizational learning would inuence innovation. 3. Research methodology This study use quantitative survey to test inferred hypotheses empirically. In this part, we showed the sample, operational denitions, and measurements of research variables. 3.1. Sample The knowledge-intensive sector was selected because of having short product life cycles and high demand for knowledge input. These were identied by Liao, Fei, and Chen (2007) as those that stand to benet from organizational capabilities in a knowledge economy. Thus, the results of surveys involving Taiwanese information technology and nancial rms provide a rich data set of information regarding KM, organizational innovation, and OL. In Taiwan Economic Forum, knowledge-intensive industry to real GDP was 36.7% in 2004. According to Ministry of Economic Affairs reports, the percentage of value-added, which created by Taiwans domestic knowledge-intensive services to the GDP increased from 37.7% in 1991 to 43% in 2001. Clearly speaking, Taiwans domestic industry structure is rapidly shifting towards a more knowledge-intensive approach. The rms selected for empirical study were chosen from the companies listed in Common Wealth Magazines Top 1000 manufacturers and Top 100 nancial rms in 2007 by mails. Therefore, a total of 600 questionnaires were mailed between June 2007 and September 2007, with 327 valid and complete responses used for subsequent quantitative analysis. The useable response rate was 54.5%. The descriptive statistics for samples are listed in Table 1. 3.2. Measurement In this study, ve-point Likert scale (1 totally disagree to 5 totally agree) was used. The questionnaire was rened based on a pilot study conducted with managers, and pre-tested conducted with

Input

Process

Output

Knowledge Management

Organizational Learning

Organizational Innovation

Fig. 1. Perspective of system.

Knowledge Management: Knowledge Acquisition Knowledge Conversion Knowledge Application

H2 H4 H1

Organizational Learning: Management commitment System perspective Openness and experimentation Knowledge transfer and integration

H3

Organizational Innovation: Behavior Innovation Product Innovation Process Innovation Market Innovation Strategic Innovation

Fig. 2. Research framework.

Knowledge Management

Grant R.M.(1996) Toward a knowledge-based theory of the firm, Strategic Management Journal. Davenport & Prusak(1998) Working Gorelick and Tantawy-Monsou (2005) For performance through learning, Knowledge: How Organizations Manage What knowledge management is critical practice.The Learning Organization They Know. Harvard Business School Press Pilar Jerez-Gomez et al. (2005) Organizational learning capability : Darroch & MaNaughton (2002) Examining the link a proposal of measurement. Journal of Business Research between knowledge management practices and types WeiLing Ke and Kwok Kee Wei(2006) Organizational learning process: Its of innovation. Journal of Intellectual Capital antecedents and consequences in enterprise system implementation Journal . Jenny Darroch(2005) Knowledge management, innovation, of Global Information Management and firm performance. Journal of knowledge management Organizational Learning Robert F. Hurley & G. Tomas M. Hult(1998) Innovation, market Organizational orientation, and organizational learning An integration and empirical : Innovation examination. Journal of Marketing Mavondo et al.(2005) Relationship with innovation, human resource practices and performance. European Journal of Marketing Weerawardena et al.(2005) Does industry matter? Examining the role of industry structure and organizational learning in innovation and brand performance Journal of Business Research .
Fig. 3. Research map.

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103 Table 1 The descriptive statistics for samples. Descriptive statistics Industry Gender Education Items Manufacturing Finance Male Female Senior High College University Graduate School Production Management R&D Others 1(below)3 years 45 years 610 years 11(above) years Numbers 164 163 163 164 2 45 203 77 9 128 72 118 143 57 91 36

1099

Percentage (%) 50.2 49.8 49.8 50.2 0.6 13.8 62.1 23.5 2.8 39.1 22 36.1 43.7 17.4 27.8 11

Position

Years in company

those different from pilot. The format and content of the questionnaire were initially developed from thorough literature review. This study adopts three dimensions from Gold et al. (2001). They are knowledge acquisition, knowledge conversion, and knowledge application except knowledge protection because it will decrease knowledge transfer and integration. Organizational learning is dened as the activities which organizations do in transformation of learning capability including individuals and competitors (Pilar et al., 2005). It is considered to be four dimensions: management commitment, system perspective, openness and experimentation, and knowledge transfer and integration. Organizational innovation is dened as ve dimensions: they are behavior, product, process, market, and strategic innovations (Wang & Ahmed, 2004). 4. Results

(2) Relationship between knowledge management and organizational learning: Knowledge management is positively related to organizational learning, meaning that business with more knowledge management show higher capability in enhancing organizational learning. (3) Relationship between organizational learning and organizational innovation: Organizational learning is positively related to organizational innovation, meaning that business with more organizational learning show higher capability in enhancing organizational innovation. Correlations can only reveal the degree of relationship between constructs. To further understand the direct and indirect effects, as well as mediating effects among the constructs, further analysis by structural equation model is required. 4.2. Measurement model

4.1. Correlation analysis Table 2 displays the means, standard deviations of variables and their correlations. As can be seen, the following relationships exist between the research variables: (1) Relationship between knowledge management and organizational innovation: Knowledge management is positively related to organizational innovation, meaning that business with more knowledge management show higher capability in enhancing organizational innovation.
Table 2 Means, standard deviations, and correlations of research dimension. Variables KAC KCO KAP MC SP EX TR BEN PDU PRO MAR STR Mean SD
**

LISRELs 8.7 maximum likelihood program is implemented to test the theoretical model proposed, as shown in Fig. 4. This structural equation model approach is characterized by its exible interplay between theory and data, as well as its bridging of theoretical and empirical knowledge for a better understanding of the real world (Fornell & Larcker (1981)). Such analysis allows for modeling based on both latent variables and manifest variables, which is a property well suited for the hypothesized model, where most of the represented constructs are abstractions of unobservable phenomena. Furthermore, structural equation modeling

1 .761 .730** .689** .576** .553** .599** .561** .484** .472** .581** .374** .489** 3.73 .454

2 .700 .760** .532** .507** .569** .500** .490** .431** .522** .358** .447** 3.68 .450

10

11

12

.807 .577** .575** .639** .610** .554** .537** .596** .440** .555** 3.78 .452

.676 .675** .732** .670** .698** .457** .583** .436** .520** 3.43 .565

.702 .605** .596** .576** .465** .570** .415** .486** 3.48 .600

.656 .675** .706** .470** .606** .403** .532** 3.56 .542

.536 .568** .448** .512** .347** .518** 3.53 .527

.734 .544** .653** .522** .590** 3.42 .582

.710 .705** .765** .638** 3.34 .586

.697 .658** .598** 3.50 .513

.721 .599** 3.12 .595

.439 3.37 .492

Signicant at p < :01.

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Fig. 4. Theoretical model.

considers errors in measurement, variables with multiple indicators, and multiple-group comparisons. Table 2 shows the means, standard deviations and correlation coefcient of each research variables, to use as analysis of the signicance level of the relationship that exists between the analyzed aspects. In terms of the quality of measurement model for the full sample, the constructs display satisfactory levels of reliability, as indicated in Table 1 diagonal from .54 to .81 (Nunnally, 1978). Table 3 indicates the tting index of measurement of each construct. Convergent validity can be judged by considering both the signicance of the factor loading and t-values. All the multi-items constructs t this criterion, and the loading is signicantly related to its underlying factor (t-values greater than 1.96) in support of convergent validity (see Table 4). To assess discriminate validity, a series of difference tests on the factor correlations among all the constructs

(Anderson & Gerbing, 1988). This was done for one pair of variables at a time by constraining the estimated correlation parameter between them to 1.0 and then performing a difference test on the values obtained for the constrained and unconstrained models (Anderson & Gerbing, 1988). The resulting signicant difference in indicates that the two constructs are not perfectly correlated and that discriminate validity is achieved (Bagozzi & Phillips, 1982). Therefore, after two-stage analysis, we got the results of convergent validity and discriminate validity. Based on Tables 4 and 5, all t-values show well convergent validity, and the differences of chi-square are greater than 3.84, where this is a good evidence for the dimensions discriminate validity. 4.3. Structural model Structural equation modeling of the LISREL 8.7 is implemented to assess the robustness of the results and the stability of the models. For the structural model, Table 6 illustrates the parameter estimates and GFI indicators. The results indicated that this structure t the data well, v2(51, n = 327) = 148.18, p < :01, CFI = .98, NNFI = .97, RMSEA = .076. Table 7 shows the structural model with the standardized coefcients for the research sample. The result reported in Table 6 provided sufcient support for hypothesis 1. Knowledge management is signicantly and positively related to organizational innovation, c1 :26, t(51) = 2.67, p < :05. And the numbers in Table 5 provided support for hypothesis 2 and 3. Knowledge management is significantly and positively related to organizational learning, c2 :78, t(51) = 11.49, p < :05. Organizational learning is signicantly and positively related to organizational innovation, b1 :62, t(51) = 5.88, p < :05. However, the result reported in Table 7 provides path analysis showing the direct and indirect effect of each constructs. After analysis, we nd the direct effect of knowledge management and organizational innovation, c1 :26, t(51) = 2.67, p < :01, is
Table 5 Discriminate validity. Model KMOL KMINN OLINN
*

Table 3 Index of conrmatory factor analysis. Index GFI SRMR RMSEA NNFI CFI KM .86 .06 .077 .94 .95 546.3 186 2.94 OL .92 .049 .063 .97 .97 225.11 98 2.3 INN .84 .071 .093 .94 .95 611.63 160 3.82

v2
DF Normed chi-square

Table 4 Reliability and convergent validity. Variables KM Reliability .890 k .75 .73 .76 .79 .71 .73 .70 .69 .76 .80 .68 .68

e
.44 .46 .42 .38 .49 .46 .51 .52 .42 .35 .54 .54

t-Value 14.69*** 14.27*** 15.04*** 16.09*** 14.06*** 14.52*** 13.60*** 13.64*** 15.48*** 16.79*** 13.23*** 13.24***

OL

.884

INN

.892

v2
148.18 227.74 258 238.27

DF 51 52 52 52

Dv2
79.56* 109.82* 90.09*

***

jtj = 3:29, at p .001 level.

Signicant Dv2 > 3:84.

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103 Table 6 Structural parameter estimates and goodness-of-tness indices. Hypotheses H1 H2 H3 Paths Knowledge management ? Organizational innovation c1 Knowledge management ? Organizational learning c2 Organizational learning ? Organizational innovation b1 v2 (32 d.f.) = 148.18 Standardized RMR = .047 Standardized coefcients .26 .78* .62* GFI = .93 NNFI = .97
*

1101

t-Value 2.67 11.94 5.88 CFI = .98 RMSEA = .076

Result Supported Supported Supported

Signicant at p < :001.

Table 7 Direct and indirect relationship. Variables Endogenous Organizational learning Effect Exogenous Knowledge management Direct Indirect Total Endogenous Organizational learning Direct Indirect Total
* ** ***

Organizational innovation t-Value Effect t-Value

.78***

11.94

.26** .48*** .74***

2.67 5.62 10.51

.62*** .61***

5.88 5.83

jtj = 1:96, at p .05 level. jtj = 2:58, at p .01 level. jtj = 3:29, at p .001 level.

signicant, and indirect effect is .48, t(51) = 5.62, p < :001 as shown in Fig. 4. Indirect effect is bigger than direct effect. Therefore, we nd that organizational learning mediate the relationship between knowledge management and organizational innovation this is support for H4. After path analysis, knowledge management will affect organizational innovation by organizational learning. Therefore, organizational learning is an important mediator between knowledge management and organizational innovation. This model is totally new to the research formerly. Since knowledge management is an important input, rms will exercise organizational learning well in order to increase organizational innovation. If rms cannot learn from their individual and group knowledge, there will be no innovation in these rms. 5. Discussion 5.1. Discussion This study proposes and tests a comprehensive model that explicitly articulates the role of various key variables that in past research received only partial and independent attention. The major ndings and the implications are discussed as follows. Firstly, the results show that the relationship between knowledge management and organizational innovation is signicant and positive. This nding is consistent with the research by Davenport and Prusak (1998) and Darroch (2005). Secondly, the results of the structural equation model indicate that knowledge management will affect organizational learning positively. This nding shows that with more knowledge management in organizations, there is more organizational learning capability. This nding is consistent with the research by Pilar et al. (2005), which indicated that knowledge management is a key strategic resource to organizational learning (see Fig. 1). Compare with

Lin and Lee (2004), this paper contribute that knowledge management affect organizational learning directly. Via empirical evidence, knowledge management will affect organizational learning. Thirdly, the results indicate that there is sufcient evidence to support a relationship between organizational learning and organizational innovation. This empirical evidence implies that organizational learning has affected organizational innovation in this study. This study considers that the organizational learning could lead to this solution. This result concurs with Weerawardena et al. (2006) and Liao et al. (2008) who shows that the more organizational learning, the more organizational innovation. Accordingly, this study encourages organizational learning including organizations and members to each other, to increase organizational innovation. Organizations and members should learn by active, novelty ways instead of learning inertia. Once, learning inertia exist, it will has negative effect on organizational learning (Liao, Fei, & Liu, 2008). Fourthly, the main theoretical contribution of this study to the organizational learning is its mediation of knowledge management and organizational innovation. Empirical evidence shows that the relationship between knowledge management and organizational innovation is signicant with a direct effect smaller than indirect effect. Accordingly, this paper contribute that organizational learning triggers the relationship between knowledge management and organizational innovation. In other words, in order to increase organizational innovation, knowledge must execute via organizational learning. Organizational innovation will show out if business can implement organizational learning in knowledge-intensive industry. Traditionally, many authors mixed the knowledge management and organizational learning (Victor et al., 2006). Therefore, authors ignore the importance of organizational learning. This study rst considers organizational learning as a mediator variable. And after empirical evidence analysis, knowledge management is seemed as

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an input, and organizational learning is a kind of process, organizational innovation will appear as an outcome. 5.2. Practical implications Knowledge management practice has been taken for many years. But the efciency of KM depends on many factors. This study tried to declare the importance between knowledge management and organizational learning. From empirical evidence, we found that business must implement knowledge management thoroughly, and accompany with organizational learning, then organizational innovation will spread out. If one organization ignores the organizational learning, knowledge management wont promote the organizational innovation directly. Therefore, organizational learning plays a bridge role to connect knowledge management and organizational innovation. More strictly speaking, organizational learning links the weakness between knowledge management and organizational innovation. Therefore, business does not only carry out knowledge management to increase innovation. Organizational learning will promote organizational innovation after one business accomplishing KM. 5.3. Potential limitations Of course, there are some limitations to this study. Notably, it is a single sourcing, self-reporting. Our research is prone to common method bias. We check this potential problem with the Harman one-factor test (Podsakoff & Organ, 1986). An unrotated factor analysis of 12 variables resulted in a 12-factor solution, as expected, which accounted for 60.7% of the total variance; and rst Factor accounted for 29.3% of the variance. Because a single factor did not emerge, and Factor 1 did not explain most of the variance, common method bias is unlikely to be a concern in our data. Also, using a cross-sectional data with questionnaires was another limitation of this study. In the future, this limitation should be overcome using longitudinal data. Aside from the limitation of self-report research, the generalizability of sampling is another limitation of this study. We conducted in a specic nation context, Taiwan rms. It is important to note that readers should be cautious when generalization the results to different cultural contexts. Furthermore, the sample size is relative small, requiring the increased sample size. 5.4. Future works Future research should investigate the antecedents of KM. In this study, we studied three KM capabilities. In future studies, knowledge transformation, knowledge protection, etc., can be studied in the context of KM. In addition, inclusion of the moderator variables, such as industry type, culture type, national type, into the model can be studied. Further, the interrelations among OL, and organizational innovation can be investigated in detail. 6. Conclusion This study demonstrates the importance of knowledge management and the relationship among organizational learning and organizational innovation. Based on 327 valid subjects, this paper implements a structure equation modeling to test the research framework and hypotheses. The results show that knowledge management is an important input to organizations, and organizational learning is a mediator. Knowledge management will signicantly affect organizational innovation. But, through organizational learning, KM will have more impact to organizational innovation. Therefore, for managers, one organization should do organizational

learning. By thoroughly doing organizational learning, KM implementation will lead to organizational innovation. References
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