Knowledge quality effect on small and medium-sized enterprises’ competitiveness through improvisational creativity, compositional creativity and innovation

Abstract

The concept of competitiveness involves the level of creative actions and ability to produce quality goods and services. For Small and Medium Enterprises (SME), competitive advantage is contingent upon their timely decisions and speedto- market production capabilities. Many researchers have considered competitiveness as the degree of creativity and innovation. In recent years, the concept of quality has been synthesized with data, information, and knowledge while advancements in knowledge management concepts have made it necessary to consider knowledge quality (KQ) as well. A sample of 358 Malaysian SMEs was used applying partial least squares (PLS) approach which is a variance based structural equation modeling method. This thesis proposes that organizational factors such as absorptive capacity (AC), functional diversity (FD), knowledge network (KN), organizational structure (OS), organizational culture (OC), and technology utilization (TU) influence the sense-making activities (KQ dimensions) of business entities. This research combined theories of sense making, creativity, and organizational improvisation and developed a cogent model helping to understand and examine the structural relationships between organizational factors, KQ, and competitiveness. The findings indicate that TU, AC, FD, and OC are significant contributors to sense-making activities of Malaysian SMEs and TU, AC, and OC are found to be indirectly significant with improvisational creativity (IC), compositional creativity (CC), and innovation. Actionable KQ and accessibility KQ are found as mediators to the relationship between intrinsic KQ, contextual KQ, and IC and CC. The results of PLS-multi group analysis show a discrepancy between the results of Malay and Chinese ethnic groups. Finally, importance-performance map analysis indicates that IC and actionable KQ have the highest importance on Malaysian SMEs’ innovation.