Relational capital and manufacturing capability: the role of knowledge transfer in small and medium enterprises manufacturing sector

Abstract

Knowledge transfer is a vital component in the growth and advancement of any industry. Manufacturing SMEs, which played a major role in a nation's economy, relied heavily on relational capital, need to capitalise on this resource to further enhance their competitiveness. One of the proposed methods is through knowledge transfer. Hence, this study endeavors to analyse the relationship between relational capital and knowledge transfer, and the role of knowledge transfer as the mediator between relational capital and competitive capabilities in the area of competitive pricing and quality. This study proposes that firms that promote knowledge transfer in their organisations will have improved competitive capabilities than firms that do not. Using the result from a total sample of 145 manufacturing SMEs, a survey showed that the relationship between a firm's relational capital has a positive and significant relationship with knowledge transfer. Also, the study found that knowledge transfer played the role of mediator between relational capital and competitive capabilities in relation to the quality, but not for competitive pricing.