Title: The Influence of Knowledge Management, Product Innovation and Process Innovation on Business Performance in the Bugis Makassar Silk Business.

Authors: Kherayani Nur

Item Type : Thesis (Thesis)

Affiliations: Doctoral Study Program in Management Science, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

Knowledge Management (KM) plays a crucial role in facilitating a crucial process within an organization, namely the learning process. Knowledge management can increase the amount of knowledge required by organizational members and facilitate the rapid dissemination of knowledge within the organization. Human resources are needed in the creative industry to improve business management capabilities, to optimize creative economic activities and open up opportunities for independent businesses. Competence is a skill that enables companies to achieve fundamental customer benefits through the formation, improvement, renewal, and utilization of resources that lead to improved business performance. Knowledge management is a primary vehicle for organizations to achieve their goals and compete effectively (Zaied, 2012). Innovation is an integral component of corporate strategy for several reasons, such as implementing more productive manufacturing processes, performing better in the market, seeking a good reputation in customer perceptions, and, as a result, improving business performance. Meng and Brown (2018) state that the purpose of innovation is to improve performance. Companies benefit from improved performance through continuous innovation. The silk woven fabric craft industry is one of the local wisdoms of the Bugis Tribe in Wajo Regency. Silk woven fabric is a source of pride for the Bugis people, previously worn only by the nobility. However, as time has become more modern, silk can now be used by all groups. Silk is an ancestral heritage whose existence must be preserved for future generations. However, in its development, silk woven fabric faces challenges in product innovation, production processes, and more advanced industrial technology with capital intensity. This condition becomes a dilemma for the local Bugis silk industry as it attempts to preserve culture and counter the power of modern industry. The population in this study was 154 silk SME business units in Wajo Regency as the unit of analysis. The sampling technique used in this study was incidental sampling. This study used four variables, each variable having several indicators. The variables in this study are knowledge management, product innovation, process innovation, business performance. The analysis technique used in this study was Structural Equation Modeling (SEM). The results of this study indicate that knowledge management has a positive effect on product innovation. This indicates that product innovation will improve if knowledge management is utilized in a company. Knowledge management has an effect on process innovation. The better the application of knowledge management, the better the process innovation in a company. Knowledge management has a positive effect on business performance. Thus, the implementation of good Knowledge Management will be able to improve company performance. Product innovation has a positive effect on business performance. This means that the better the product innovation, the better the business performance. Process innovation has a positive effect on business performance. Thus, the better the process innovation, the better the business performance. The five hypotheses proposed in this study can be accepted. The implications of this study include two implications, namely: Theoretical Implications, namely: knowledge management can be implemented in SMEs, Knowledge management has a positive effect on product innovation, process innovation, and business performance; product innovation and process innovation have a positive effect on business performance. Practical Implications, namely: innovation is very important in the development of a company. SMEs must not stop innovating. To improve the performance of silk SMEs, SMEs must always improve product innovation and process innovation. Silk weaving activities are the main regional commodity and are one of the cultural heritages, therefore awareness and love must be instilled in preserving, developing, maintaining and improving the quality of Bugis silk cloth. The knowledge possessed by each human resource separately does not guarantee the creation of an innovation because it is all limited as potential. Empowerment by management is crucial to ensure that each employee's knowledge can be synergized into a unified whole, creating new ideas, all of which are contributed to the company as product innovation. The most crucial step in sustaining business activities and increasing competitiveness is none other than empowering the company's innovation capabilities.

Keywords: Knowledge Management, Product Innovation, Process Innovation, Business Performance

Sources: http://repository.unair.ac.id/94320/