Analyzing the Effect of Knowledge Management and Market Orientation on Market Performance with the Mediating Role of Open Innovation (Case Study: Tejarat Bank)

Document Type : Case study

Authors

1 Associate Professor, Department of Business Management, Faculty of social Sciences, University of Mohaghegh Aradabili, Ardabil, Iran

2 Ph.D Candidate of Business Management, Marketing Management, Faculty of social Sciences, University of Mohaghegh Aradabili, Iran

Abstract

One of the most important concepts for any organization in any sector and size is market performance, which plays an important role in the success of the organization. Performance measurement evaluates the implementation of strategies and in the absence of it decision makers cannot be sure that their goals will be achieved. Therefore, the present study was conducted to investigate the effect of knowledge management and market orientation on market performance with the mediating role of open innovation. The present research is an applied research in terms of purpose, the method of data collection is descriptive-correlational and cross-sectional in terms of time. The statistical population of the present study included employees, experts and managers of Tejarat Bank in District 5 in Tehran. Referring to Morgan table, the sample size was 242 people who were selected by simple random sampling. Mean, standard deviation, skewness and elongation were used to analyze the data in the descriptive part. In the inferential part, structural equation modeling was used and SPSS 23 and Lisrel 8.8 software were applied for analysis. The results showed that the variables of knowledge management (with path coefficient 0.37), market orientation (with path coefficient 0.41) and open innovation (with path coefficient 0.32) have a positive and significant direct effect on market performance; In addition, knowledge management and market orientation, in addition to having a direct impact, also have an indirect and significant effect on market performance through open innovation. Given the positive impact of knowledge management on market performance, if banks do not have the necessary competence to develop knowledge, they will not gain a knowledge-based competitive advantage. Also, due to the importance of market orientation in achieving greater market performance, market competitiveness should be increased. Understanding the market in order to understand the customers' point of view can play a role in increasing market performance. Banks need to use appropriate methods to retain their key customers to increase their satisfaction.

Keywords


Acharya, B. (2017). The unfinished agenda: Restoring public sector bank health in India. Retrieved from https://rbidocs.rbi.org.in/rdocs/Speeches/PDFs/IIBFVA09072017437215FBE69A442CB8E227778F5A2B23.
Adeyemo, K.A., Isiavwe, D., Adetula, D., Olamide, O., and Owolabi, F. (2020). Mandatory adoption of Central Bank of Nigeria’s cashless and e-payment policy: Implication for banks’ customers. Banks and Bank Systems, 15(2), 243-253.
Arshad, A.M., Wang, J., and Su, Q. (2016). Investigating the mediating role of service innovation in firm performance: an empirical research. J Appl. Bus. Res, 32 (2), 461–478.
Asbari, M., Purwanto, A., Fayzhall, M., Winanti, Purnamasari, D., and Firdaus, R. A. (2020). Hard skills or soft skills: Which are more important for Indonesian markets innovation. Test Engineering and Management, 83(2836), 2836–2854.
Asgarnezhad Nouri, B., Sanayei, A., Fathi, S., & Kazemi, A. (2014). Meta-Analysis of Mediating Role of Sample Attributes in Relationship between Marketing Activities and Organizational Performance. Management Research in Iran (Scientific Research Quarterly), 8 (1), 151-169.
Bernal, C.A., Amaya, N., Gaviria-Penaranda, A., and Zwerg-Villegas, A.M. (2020). Knowledge and organizational performance in franchised restaurants in Colombia. International Journal of Emerging Markets, 1-21.
Bhaskar, H.L. (2020). Establishing a link among total quality management, market orientation and organizational performance: An empirical investigation. The TQM Journal, 32, 6.
Bigliardi, B., and Galati, F. (2016). Which factors hinder the adoption of open innovation in SMEs?. Technology Analysis & Strategic Management, 28, 8, 869-885.
Bogers, M., Chesbrough, H., and Moedas, C. (2018). Open innovation: research, practices and policies. Calif. Manage. Rev, 60, 5–16.
Bolisani, E., and Bratianu, C. (2018). The elusive definition of knowledge, in: Emergent Knowledge Strategies: Strategic Thinking in Knowledge Management. Springer International Publishing, Cham,1–22.
Boso, N., Adeleye, I., Ibeh, K., and Chizema, A. (2019). The internationalization of African firms: Opportunities, challenges, and risks. Thunderbird International Business Review, 61(1), 5-12.
Cassiman, B., and Valentini, G. (2016). Open innovation: Are inbound and outbound knowledge flows really complementary?. Strategic Managament, 37, 6, 1034-1046.
Chang, C.H. (2019). Do green motives influence green product innovation?  The mediating role of green valueco-creation.Corp. Soc. Responsib. Environ. Manag, 26, 330-340.
Chen, Ching-Fu., and Myagmarsuren, Odonchimeg. (2013). Exploring the moderating effects of value offerings between market orientation and performance in tourism industry. International Journal of Tourism Research, 15, 595–610.
Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long Range Plan, 43, 354–363.
Chin, C-H., Lo, M-C. & Ramayah, T. (2013). Market Orientation and organizational performance: the moderating role of service quality. Sage open, 3, 1-14.
Chiou, J.S., Hsieh, C.H., and Yang, C.H. (2004). The effect of franchisor’s communication, service assistance, and competitive advantage on franchisee’s intentions to remain in the franchise systems. Journal of Small Business Management, 42(1), 19-36.
Daengs, A., and Soemantri, A.I. (2020). Entrepreneurship Orientation Strategy, Market Orientation And Its Effect On Business Performance In Msmes. Journal Bisnis dan Manajemen, 1(4), 1 – 10.
Dayan, R., Heisig, P., and Matos, F. (2017). Knowledge management as a factor for the formulation and implementation of organization strategy. Journal of Knowledge Management, 2(21), 308-329.
Delshab, V., Winand, M., Sadeghi Boroujerdi, S., Hoeber, L., and Mahmoudian, A. (2020). The impact of knowledge management on performance in nonprofit sports clubs: the mediating role of attitude toward innovation, open innovation, and innovativeness. European Sport Management Quarterly, DOI: 10.1080/16184742.2020.1768572.
Delshab, V., and Sadeghi Boroujerdi, S. (2018). Investigating the influence of unlearning on knowledge management in sport organizations. Kybernetes, 47(10), 2025–2040.
Demchig, B. (2020). A Holistic Conceptual Model of Organizational Knowledge Management Maturity. University of Finance and Economics, Ulaanbaatar, Mongolia, DOI: 10.34190/IKM.20.089.
Ferraris, A., Santoro, G., and Dezi, L. (2017). How MNCs subsidiaries may improve their innovative performance? The role of external sources and knowledge management capabilities. Journal of Knowledge Management, 3(21), 540-552.
Ferraresi, A. A., Quandt, C. O., dos Santos, S. A., and Frega, J. R. (2012). Knowledge management andstrategic orientation: Leveraging innovativeness and performance. Journal of Knowledge Management,16(5), 688–701.
García-Villaverde, P.M., Rodrigo-Alarcón, J., Ruiz-Ortega, M.J., and Parra-Requena, G. (2018). The role of knowledgeabsorptive capacity on the relationship between cognitive social capital and entrepreneurial orientation. J.Knowl. Manag.
Gok, O., and Peker, S. (2017). Understanding the links among innovation performance, market performance and financial performance. Review of Managerial Science, 11, 605–631.
Gottelanda, D., Shock, J., and Sarinc, SH. (2020). Strategic orientations, marketing proactivity and firm market performance. Industrial Marketing Management, 1-11.
Gupta, V. K., Atav, G., & Dutta, D. K. (2017). Market orientation research: a qualitative synthesis and future research agenda. Review of Managerial Science, 13(4), 1-22.
Hadi Ali, F., Ali, M., Malik, S.Z., Hamza, M.A., and Fawad Ali, H. (2020). Managers’ Open Innovation and Business Performance in SMEs: A Moderated Mediation Model of Job Crafting and Gender. Journal Open Innovation. Technol. Mark. Complex, 6, 89, 1-15.
Hameed, W.U., Nisar, Q.A., and Wu, H.C. (2021). Relationships between external knowledge, internal innovation, firms’ open innovation performance, service innovation and business performance in the Pakistani hotel industry. International Journal of Hospitality Management, 92, 102745.
Hameed, W.U., Basheer, M.F., Iqbal, J., Anwar, A., and Ahmad, H.K. (2018). Determinants of Firm’s open innovation performance and the role of R & D department: an empirical evidence from Malaysian SME’s. J. Glob. Entrep. Res. 8 (1), 1–20.
Hernández‐Linares, R., Kellermanns, F. W., and López‐Fernández, M. C. (2018). Dynamic Capabilities and SME Performance: The Moderating Effect of Market Orientation. Journal of Small Business Management, 34(2), 1-26.
Huarng, K.H., Tur, A.M., and Moreno, F.C. (2018). Innovation, knowledge,  judgment,   and decision-making as virtuous cycles. Journal of Business Research, 88, 278-281.
Jiang, F., Wang, G., and Jiang, Xu. (2019).  Entrepreneurial orientation and organizational knowledge creation: A configurational approach. Asia Pacific Journal of Management, 1-27.
Johnson, T.L., Fletcher, S.R., Baker, W., and Charles, R.L. (2019). How and why we need to capture tacit knowledge in manufacturing: Case studies of visual inspection. Applied Ergonomics, 74, 1–9.
Kajalo, S., and Lindblom, A. (2015). Market orientation, entrepreneurial orientation and business performance amongsmall retailers.Int. J. Retail. Distrib. Manag, 43, 580-596.
Katsikeas, C. S., Morgan, N. A., Leonidou, L. C., and Hult, G. T. M. (2016). Assessing performance outcomes in marketing. Journal of Marketing, 80(2), 1-20.
Kenneth, W.G., Inman, R.A., Sower, V.E., and Zelbst, P.J. (2019). Impact of JIT, TQM and green supply chainpractices on environmental sustainability. Journal of Manufacturing Technology Management, 30, 26–47.
Kianto, A., Hussinki, H., and Vanhala, M. (2018). The impact of knowledge management on the market performance of companies. Knowledge management in the sharing, 189-207.
Lazzarotti, V., Manzini, R., and Pellegrini, L. (2010). Open innovation models adopted in practice: an extensive study in Italy. Measur. Bus. Excel, 14, 11–23.
Lee, V. H., Foo, A. T. L., Leong, L. Y., and Ooi, K. B. (2016). Can competitive advantage be achieved through knowledge management? A case study on SMEs. Expert Systems with  Applications, 65, 136–151.
López-Nicolás, C., & Meroño-Cerdán, ÁL. (2011). Strategic knowledge management, innovation and performance. International Journal of Information Management,31(6), 502–509.
Mahmoud, A.M., Blankson, C., Owusu-Frimpong, N., Nwankwo, S., and Trang, T.P. (2016). Market orientation, learning orientation and business performance the mediating role of innovation. International journal of bank marketing, 34(5).
Maravilhas, S., and Martins, J. (2019). Strategic knowledge management a digital environment: Tacit and explicit knowledge in Fab Labs. Journal of Business Research. https://doi.org/10.1016/j.jbusres.2018.01.061.
Mohammadian, M. Allahverdi, M., and Salimi, A. (2014). The impact of export market orientation and competitive advantage on export performance (case study: The Study of Exemplary Exporters of Iran Selected in 2012. Journal of Business Management, 5(4), 61-78.
Montiel-Campos, H. (2018). Entrepreneurial orientation and market orientation: Systematic literature review and future research. Journal of Research in Marketing and Entrepreneurship, 20(2), 292-322.
Moroz, O.V. (2020). Model of Self-organizing Knowledge Representation and Organizational Knowledge Transformation. American Journal of Artificial Intelligence, 1(4), 1-19.
Mostafiz, M.I., Sambasivan, M., and See Kwong, G. (2021). Antecedents and Consequences of Market Orientation in International B2B Market: Role of Export Assistance as a Moderator. Journal of Business and Industrial Marketing.
Nahan, N., Kristinae, V., and Leiden, R.A.Z. (2019). The Strength of a Business Strategy with Value Innovation for Rattan Handicraft Entrepreneurs in Central Kalimantan, Indonesia. Int. J. Bus. Manag, 7.
Narastika, A. R., and Yasa, N. N. K. (2017). Peran Inovasi Produk dan Keunggulan Bersaing Memediasi Pengaruh Orientasi Pasar Terhadap Kinerja Pemasaran. Jurnal Ilmu Manajemen (JUIMA), 7(1).
Newman, A., Prajogo, D., and Atherton, A. (2016). The influence of market orientation on innovation strategies. Journal of Service Theory and Practice, 26(1), 72 – 90.
Nieves, J., and Diaz-Meneses, G., (2018). Knowledge sources and innovation in the hotel industry: empirical analysis on Gran Canaria Island, a mature mass-tourism destination. Int. J. Contemp. Hosp. Manage, 30 (6), 2537–2561.
Ogura, Y. (2018). The objective function of government-controlled banks in a financial crisis. Journal of Banking & Finance, 89, 78-93.
Ovuakporie, O.D., Pillai, K.G., Wang, CH., and Wei, Y. (2021). Differential moderating effects of strategic and operational reconfiguration on the relationship between open innovation practices and innovation performance. Research Policy, 50, 1-17.
Ozer, M., and Vogel, D. (2015). Contextualized relationship between knowledge sharing and performance in software development. Journal of Management Information Systems, 32(2), 134–161.
Palanisamy, R. (2010). Organizational Culture and knowledge management in ERP implementation: an empirical study. Journal of Computer Information Systems, Vol. 48. No. 2, pp. 100 – 120.
Paruchuri, S., and Awate, S. (2017). Organizational knowledge networks and local search: the role of intra-organizational inventor networks. Strategic Management Journal, 3(38), 657-675.
Prajogo, D.I., and Oke, A. (2016). Human capital, service innovation advantage, and business performance: the moderating roles of dynamic and competitive environments. Int. J. Oper. Prod. Manage, 36 (9), 974–994.
Pustovrh, A., Rangus, K., and Drnovsek, M. (2020). The role of open innovation in developing an entrepreneurial support ecosystem. Technological Forecasting & Social Change, 152, 1-9.
Setiawan, R., Eliyana, A., Suryani, T., and Prayitto, H. (2020). The effct of market orientation on innovation capacity through entrepreneurial orientation at business startup coffee shop in indonesia. Sys rev pharm, 11(11), 298-305.
Shahzad, M., Ying, Q., Ur Rehman, S., Zafar, A., Ding, X., and Abbas, J. (2019). Impact of knowledge Absorptive Capacity on Corporate Sustainability with Mediating Role of CSR: Analysis from the Asian Context. Journal of Environmental Planning and Management, 1-27. https://doi.org/10.1080/09640568.2019.1575799.
Shkolik, O., Chirkova, L., and Chirkova, P. (2016). The analysis of the influence of the intellectual capital on the results of the commercial activity of financial institutions. 5th International Conference on Mathematical Modeling in Physical Sciences, IOP Publishing, Athens -Greece, 1-5.
Supriyadi, D., Syafitri, L. N. H., Widodo, S. F. A., Wahidi, R., Arinta, Y. N., Nabhan, F., Mufid, A., Purwanto, A., Fahlevi, M., Sunarsi, D., and Cahyono, Y. (2020). Innovation And Authentic Leadership Of Islamic University Lectures In Faculty Pharmaceutical Faculty: What Is The Role Of Psychological Capital?. Systematic Reviews in Pharmaceutical, 11 (8), 383-393.
Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49.
Teece, D., and Leih, S. (2016). Uncertainty, innovation, and dynamic capabilities. California Management Review, 58(4), 5–12.
Udriyah, U., Tham, J., and Azam, S. (2019). The effects of market orientation and innovation on competitive advantage and business performance of textile SMEs. Management Science Letters, 9(9), 1419-1428.
Vendrell-Herrero, F., Darko, C.K. and Ghauri, P. (2019). Knowledge management competences, exporting and productivity: uncovering African paradoxes. Journal of Knowledge Management.
Wang, C.L., Senaratne, C., and Rafiq, M. (2015). Success traps, dynamic capabilities and firm performance. Br. J. Manage, 26, 26–44.
Wallin, M.W., and Von Krogh,, G. (2010). Organizing for open innovation: focus on the integration of knowledge. Organ. Dyn. 39, 145–154.
Werner, K., and Dickson, G. (2018). Coworker knowledge sharing and peer learning among elite foot-ballers: Insights from German Bundesliga players. Sport Management Review,21(5), 596–611.
Widiastuti, T.M., Alhabsji, T., Suharyono, S., and Arifin, Z. (2020). Effect of Market Orientation on Learning Orientation to Reach Competitive Advantage Rural Credit Banks in East Java Province – Indonesia. International Journal of Innovative Science and Research Technology, 5,4, 629-640.
Winand, M., and Anagnostopoulos, C. (2017). Get ready to innovate! staff’s disposition to implementservice innovation in non-profit sport organisations. International Journal of Sport Policy andPolitics,9(4), 579–595.
Winarso, W., Hady, H., Panday, R., and Untari, D.T. (2020). Competitive Advantage and Marketing Performance on SMEs: Market Orientation and Innovation of Local Product in Bekasi, Indonesian. Test engineering & management, 1, 1-11.
Yasa, N., Giantari, I., Setini, M., and Rahmayanti, P. (2020). The role of competitive advantage in mediating the effect of promotional strategy on marketing performance. Management Science Letters, 10(12), 2845-2848.
Zhang, Ch. (2020). An Open Data Storytelling Framework for Organizational Knowledge Management. (Unpublished doctoral dissertation). Renmin University of China, Beijing, China, 415-420.
Zhou, Z., Amowine, N., and Huang,  D. (2018). Quantitative efficiency assessment  based  on the     dynamic slack-based     network     data envelopment analysis for commercial banks in Ghana.  South  African  Journal  of  Economic and Management Sciences, 21(1), 1717.
Volume 4, Issue 1 - Serial Number 12
Serial No.12- Spring Quarterly
June 2021
Pages 89-122
  • Receive Date: 02 March 2021
  • Revise Date: 17 April 2021
  • Accept Date: 29 April 2021
  • Publish Date: 22 May 2021