QMS-Business Performance: Its Antecedents and Mediating Role of Organizational Agility and Innovation

Abstract

In the last decades, the significance of knowledge management has been emphasized by researchers and other practitioners (Santoro, Thrassou, Bresciani. and Del Giudice, 2019). Now a day, the knowledge capabilities are known as the most crucial resource of any organization because it is present in the world which is more interrelated and where knowledge is an integral part of society which is to be successful (Sheng, 2019). Today’s uncertain environment, the organizations which are considered as successful are the organizations who are continuously creating new ideas and distribute it wisely and widely (Shafiq, Lasrado. and Hafeez, 2019). A renowned management expert, Drucker (2012), highlighted management practices and information asymmetries, which produce hurdles for task accomplishment within an organization. The cooperative processes of an organization can be subjected to a great threat while overcoming uncertainties in the process of decision making and during resolving the conflicts in an organization. Thus, to avoid such a dilemma, information asymmetries are required for the proper facilitation in workflow coordination (Raghu & Vinze, 2007). The frequent changes are faced with market turbulence by firms in customer preferences and market demands (Ravichandran, 2018). At this time, the main thing required by a firm will be to leverage its resources as to attain maximum knowledge in these business activities from its environment. Thus, the phenomenon of knowledge sharing among the ventured firms and adoption of innovative ideas and techniques will prove them as an excellent source to achieve the market benefits and provide access to the multiple market resources as required by the firm. Now, if we discuss the competition in the stable markets, then these markets do not possess the high level of competition, and they do not require a lot of external knowledge and resources (Raschke, 2010). When these markets are operating in a stable mechanism, thus, they will require less information technology mechanism in the market turbulence environment (Roberts & Grover, 2012). The decision-making probability is enhanced with the application of knowledge for business performances in terms of quality, financial position, and market position. Knowledge capabilities are essential for a firm to review and reconfigure in the process of products or services. Knowledge management is the key to attain a quality management system. In any organization, the perspective of knowledge management is just an emerging thought. This was first developed and give an extension with resource-based theory. According to Alavi and Leidner (2001), physical resources (assets and other physical resources) not provide a competitive advantage for any organization. Hedlund (1994) said at that time knowledge management is the composition and application of informative and administrative methods (Ambrosini & Altintas, 2019; Ferraris, Santoro. and Dezi, 2017). Two way traffic works in the world of principals and activities, while realities are much complex and multifarious which gives birth to the multidisciplinary field of literature and communication (Mahdi, Nassar. and Almsafir, 2019; Santoro et al., xi 2019). Knowledge management offers confinement to organizational agility (Oliva & Kotabe, 2019). Organizational agility is defined as the ability of organizations to cope with rapidly changing complex and turbulent environment (Ravichandran, 2018). Agility never demands sustainability but finds sustainability for the organizations. Agility requires the dynamic capability which is extravagant and responsive as well as stability which provides a strong backbone that deals with the turbulent changes and enhance the competencies of organizations to deal with changes (Navarro, Gabriel, Acosta. and Pedro, 2016). It provides a springboard to the organization’s backbone, which is an anchor point to adopt all changes by specific means. So to cope with the quality management system individuals and organizations learn the wisdom of knowledge, which seems coming from interdisciplinary fields of business (Felipe, Leidner, Roldán. and Leal‐ Rodríguez, 2019). That develops organizational agility and hence a quality management system. Organizational innovation supports technological innovation as it triggers the adoption of new technologies (Akgün, Keskin. and Kırçovalı, 2019). The innovation is all about changing custom ways, traditional behaviors and formulas by implementing new ideas. Organizational innovation is an umbrella term that spread in all dimension of organizational working (Taylor, Santiago. and Hynes, 2019). This research is developing a framework of quality management system business performance founded on the pillars of knowledge management capabilities to understand how the firms can utilize, apply and convert the acquired knowledge. Moreover, organizations use their knowledge management capabilities of infrastructure and process for superior innovations, which are the ultimate source to enhance the performance of a quality management system. Organizational agility is a dynamic extravagant and responsive capability to deal with the turbulent and rapidly changing business environment. Additionally, the presented framework is helping to study organizational agility and innovation as antecedents of QMS business performance which will prove significant value in literature as it was not associated in prior studies. Furthermore, the mediating role of organizational agility and innovation supports to understanding the mechanism that underlies between QMS business performance and knowledge management capabilities. The presented study is based on positivist cosmology, observational epistemology and quantitative methods strategies. The primary reason is that other positivist researches have been directed around thereby prestigious researchers on knowledge management capabilities, organizational agility innovation (Abraham & Knight, 2001; Aburub, 2015; Antunes, Mucharreira, Justino. and Quirós, 2018). As recommended by (Collis & Hussey, 2013) a methodological structure could be gotten from an audit of the critical writing which will give a reasonable objective xii for how a specific phenomenon is probably going to act, from which an analyst can formalize a model or a paradigm. As the research instrument is designed to address the research question, so the respondent has asked about the knowledge management capabilities, the structure and knowledge process flow in organization. It’s a sensitive matter to survey about the performance and organization capabilities, so the respondent has asked in a decent way to answer about their views about issues and disclose their firm’s capabilities as the same method has been applied by Gold, Malhotra, and Segars (2001) while establishing the instrument of knowledge management capabilities. Secondly In the criteria section survey method is quite useful to assess the information about the quality elements and principal in the organization, which is necessary to participate as a respondent in the research. The presented study have a specific objective to determine the business performances of the service providing firms (organizations), which possessed the quality management system based on the criteria defined by (Willar, Trigunarsyah. and Coffey, 2016), so the homogenous purposive sampling technique is used to collect data from the selected sample frame. The data were collected from one hundred and sixty-nine organizations. The assessment questionnaire powered by Google forms were sent through electronic mail to all selected firm of each division of Punjab for the sake of responses. All the correlation coefficient in the research is less than 0.65 which shows that there is no significant issues of multicollinearity among variables. Warp PLS is a nonlinear structural model analysis software developed by Prof. Ned Kock. Its first version was launched in 2009. In this research thesis, sixth version is used to measure the statistical relationships among latent variables and with their indicators. Data screening, identification of missing values and multivariate outliers tested before the final analysis of the structural model. Convergent validity of the instrument used in this study is examined by loadings and cross loading shown in table 5.2. Insignificant item (p-value less than 0.05) and factor loading less than 0.4 were removed from final analysis. Knowledge infrastructure capabilities (KIC) is a second-order exogenous variable, helped to determine how the culture technology and structure of organizations affect the overall business performances of the form in perspective of a quality management system. The knowledge process capabilities are also the second-order exogenous variable parallel to KIC that assist in knowing about the relationships in the framework. It helped to determine how firms acquire, convert, apply and protect their knowledge for their business performance in perspective of the quality management system. Moreover, the mediating effect of organizational innovation and organizational agility is intended through both exogenous variables and the dependent variable. The ratio of Average path coefficient explained If X xiii changes by one standard deviation Y changes by b standard deviations (with b being the path coefficient). The presented research has a significant average value of path coefficient 0.435, P<0.001. The model’s predictive capabilities to judge the structural model’s quality in between the indicators and their respective constructs, and also in between the causal relationship in the model. The threshold value of Tenenhaus GoF is small >= 0.1, medium >= 0.25, large >= 0.36, the presented structural model owns a large Tenenhaus GoF of 0.59. In the presented research, the test of endogeneity is conducted for both endogenous variables, knowledge infrastructure capabilities and knowledge process capabilities respectively. The Warp-PLS allows a test of endogeneity through the creation of instrument variable (IV_KPC/KIC), which should insignificant and least path values explain the minimum involvement of endogeneity in the structural model. This research represents one of the earliest studies that analyze the use knowledge management capabilities, organizational agility and organizational innovation in QMS based business performance. This presented research developed and tested a model to explain the effects of KIC and KPC on QMS business performance and considered the mediating role played by organizational innovation and organizational agility. This research contributes to the literature by explaining innovation as a mediator of QMS business performance and knowledge management capabilities. That will assist in the writing of innovation to organizations can be more than just of economic benefits and may also include administrative performance, well-being, personal development and increased customer satisfaction. The research has several limitations such as data was collected by multistage cluster sampling method and homogenous purposive sampling technique, because of large population size, the inferences can be better if some other probability sampling techniques used to collect the data. Also, the study approach while managing data was cross-sectional, and the samples were material from the same period. Theoretically longitudinal approach for the collection of data can better support the causal results of the presented framework. As this study is the first formal study to unveil the antecedent of QMS business performance, so it leads towards many opportunities for further examination relating to its affecting factors. These factors can be extracted from administrative and behavioral aspect social sciences.