Effect of knowledge sharing on organizational performance through customer satisfaction in the Malaysian banking industry

Abstract

Recent continuous instabilities in financial markets have led banks to regulate themselves to violent and aggressive market while struggling for growth, and maintaining their profits. Previously, banks were relying on products for improving their profit margins however, currently they are focusing on customer satisfaction due to the intense competition in the market. Ensuring the satisfaction of financially proficient and knowledgeable customers is the new megatrend of banking industry. Banks need to satisfy their customers in order to maintain an acceptable organizational performance. Therefore, this thesis develops a model to improve organizational performance of the banks through satisfying customers by applying knowledge sharing. In this regard knowledge sharing - as a strategic capability of a bank - affects business process improvement, after sale services, and products & services offering which result in customers satisfaction, and consequently improves organizational performance. Moreover, this study presents and discusses empirical findings of a survey on the effect of knowledge sharing on organizational performance done on 384 Malaysian bank employees. Structural equation modeling (SEM-Smart PLS 3) was used to perform the analysis on the hypothesized model. The findings strongly support the hypothesized relationships proposed in the theoretical model. Particularly, the results revealed that knowledge sharing has a strong positive effect on business process improvement and after sale services. The results seem to suggest that there are strong and positive relationships between business process improvement and products & services offering, after sale services and customer satisfaction, products & services offering and customer satisfaction, business process improvement and organizational performance, products & services offering and organizational performance, customer satisfaction and organizational performance, and customer satisfaction and customer feedback. This study contributes to theoretical and practical knowledge by providing the evidence of the positive relationship between knowledge sharing and organizational performance. Hence, the findings respond to the current needs of the service industry in general, and the banking industry in particular, in that competitive organizational performance is dependent on effective application of knowledge sharing, which is a strategic capability in pursuit of sustainable competitive advantage.