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Expert Systems with Applications 37 (2010) 10961103

Contents lists available at ScienceDirect

Expert Systems with Applications

journal homepage: www.elsevier.com/locate/eswa

System perspective of knowledge management, organizational learning,

and organizational innovation
Shu-Hsien Liao a,1, Chi-chuan Wu b,*
a
b

Graduate School of Management Sciences, Tamkang University, No. 151, Ying-chuan Rd., Tamsui, Taipei 251, Taiwan, ROC
Management Sciences, Tamkang University, No. 151, Ying-chuan Rd., Tamsui, Taipei 251, Taiwan, ROC

a r t i c l e

i n f o

Keywords:
Knowledge management
Organizational learning
Organizational innovation
Mediator
Structural equation modeling

a b s t r a c t
In knowledge economics, enterprises need to adapt and update its knowledge to keep their capability of
innovation. Therefore, the relationship between knowledge management and organizational innovation
is getting an important issue in research and in practical areas. However, without good capability of organizational learning, one organizational cannot retain some important knowledge management practices
in it. This study selects samples based on Common Wealth Magazines Top 1000 manufacturers and Top
100 nancial rms in 2007 by mails. A questionnaire survey was conducted and 327 valid replies were
received. This research analyzes the relationship among knowledge management, as well as organizational learning and organizational innovation utilizing structural equation modeling. The results show
that organizational learning is the mediating variable between knowledge management and organizational innovation. Just like a system, knowledge management is an important input, and organizational
learning is a key process, then organizational innovation is a critical output.
2009 Elsevier Ltd. All rights reserved.

1. Introduction
Facing this rapid change, enterprises should adapt and update its
knowledge to maintain its competitive advantages (Rademakers,
2005). However, past research showed the issues of knowledge
management (KM) are complicated. Some researches are related
to the competitive advantages, and some are the e-business (Lin &
Lee, 2004); some are related to organizational learning, and some
are organizational innovation (Darroch, 2005; Davenport & Prusak,
1998). We found that organizational learning is mixed with KM
(Victor, Francisco, & Antonio, 2006), and the relationship between
knowledge management and organizational learning is not evident.
Reviewing past literatures, many scholars conducted the research to understand the relation among knowledge management,
organizational learning, and organization innovation separately.
We found few papers discussed the practical results and quantitative numbers (Darroch & MaNaughton, 2002). Based on theory,
knowledge management, organizational learning, and organization
innovation should not discuss separately (Goh, 2005). The immediate concern, in the relentless pursuit of innovation within a knowledge enterprise, appears to be more than just identifying and
resolving issues on KM independently.

* Corresponding author. Tel./fax: +886 2 25925252x2435.

E-mail addresses: Michael@mail.tku.edu.tw (S.-H. Liao), ccwu@ttu.edu.tw (C.-c.
Wu).
1
Tel.: +886 2 26215656x3396; fax: +886 2 26223204.
0957-4174/$ - see front matter 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.eswa.2009.06.109

This study investigates the relationships among knowledge

management, organizational learning, and organization innovation
together in knowledge-intensive business. We use LISREL to model
the relationships among knowledge management, organizational
learning, and organization innovation based on the data sampled
from 27 Taiwanese rms. These rms include electronic, and nancial insurance industries from which 327 valid samples were
received.
The rest of the paper is organized as follows. Section 2 reviews
the literature and proposes the research map. Section 3 describes
the research methodology including framework and hypotheses.
Section 4 describes the data analysis and the results. Section 5 discusses managerial implications and section 6 presents a brief
conclusion.

2. Literature review and hypotheses

2.1. Knowledge management
Gold, Malhortra, and Segars (2001) examined the issue of effective knowledge management (KM) from the perspective of organizational capabilities. This perspective suggests that a knowledge
infrastructure consisting of technology, structure, and culture
along with a knowledge process architecture of acquisition, conversion, application, and protection are essential organizational
capabilities or preconditions for effective knowledge manage-

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

ment. The results provide a basis for understanding the competitive predisposition of a rm as it enters a program of KM.
Cui, Grifth, and Cavusgil (2005) also mentioned that KM capabilities consist of three interrelated processes: knowledge acquisition, knowledge conversion, and knowledge application (Gold
et al., 2001). Knowledge is not only an important resource for a
rm, but also it serves as a basic source of competitive advantage
(Gold et al., 2001; Grant, 1996; Jaworski & Kohli, 1993). Therefore,
KM capabilities refer to the knowledge management processes in
an organization that develop and use knowledge within the rm
(Gold et al., 2001).
From Gold et al. (2001) and Cui et al. (2005), we nd the completely knowledge management activities form the perspective of
organizational capabilities. They argue that there are three main
processes: acquisition, conversion, and application. Although there
are still many classications of KM, this study prefer the viewpoints of organizational capabilities, and be in favor of these three
dimensions in our study.
2.2. Organizational innovation
The growth innovation literature provides many alternative
conceptualizations and models for the interpretation of observed
data. An innovation can be a new product or service, a new production process technology, a new structure or administrative system,
or a new plan or program pertaining to organizational members.
Therefore, organizational innovation, or innovativeness, is typically
measured by the rate of the adoption of innovations, although a
few studies have used other measures (Damanpour, 1991).
Past research has argued that different types of innovation are
necessary for understanding and identifying in organizations.
Among numerous typologies of innovation advanced in the relevant
literature, three have gained the most attention. Each centers on a
pair of types of innovation: administrative and technical, product
and process, and radical and incremental. In Wang and Ahmed
(2004), they identied organizational innovation through an extensive literature. A nal 20-item measurement construct is validated
through FAME Database which contains information for companies
in the UK and Ireland. FAME contains information on 3.4 million
companies, 2.6 million of which are in a detailed format. These ve
dimensions are tested from component factors and a three-step approach. They are product innovation, market innovation, process
innovation, behavioral innovation, strategic innovation. Because
this measurement is tested by extensive literature collection, and
precisely statistical testing, this study prefers their work to test
the similar samples in Taiwan to compare the results.
Very little empirical research has specically addressed antecedents and consequences of effective knowledge management
(Darroch & MaNaughton, 2002). The management of knowledge
is frequently identied as an important antecedent of innovation.
Effective KM has been presented in the literature as one method
for improving innovation and performance. While many studies
have reported that KM as antecedents of innovation, none has
explicitly examined the relationship between the two constructs.
In Darroch (2005), we got the result that KM process would positively affect innovation. Therefore, it is fair to conclude that the
relationship between KM and innovation is close related. Thus, this
study propose,
H1: Knowledge management will affect organizational innovation positively.

1097

der to develop and perform, organizational learning (OL) has been

regarded as one of the strategic means of archiving long-term organizational success (Senge, 1990).
One of the traditional ways to measure learning has been to use socalled learning curves (Lieberman, 1987; Yelle, 1979) and experience curves (Boston Consulting Group, 1968). However, these curves
are incomplete measuring tools (Garvin, 1993, p. 89). OL is a complex multidimensional construct . . . encompassing multiple sub processes (Slater & Narver, 1994, p. 2). So, Pilar, Jose, and Ramon (2005)
considered OL to be a latent multidimensional construct including
managerial commitment, systems perspective, openness and experimentation, and knowledge transfer and integration.
Facing the current uncertainty environment, business must
keep learning to maintain its competitiveness. And, OL will develop
well based on well structured knowledge in organizations. In other
words, business could have OL capabilities underlying well individual learning (Takeuchi & Nonaka, 1995).
The experimental experience of English enterprises, Garratt
(1990) found that a learning organization is the application of
organizational development and learning. In order to satisfy consumers capricious demands, organization should develop personal
or group learning abilities. In order to develop learning abilities,
organization should complete well KM process. Without KM, one
organization cant develop personal or group learning abilities
(Garratt, 1990; Su, Huang, & Hsieh, 2004).
Pilar et al. (2005) also argued that knowledge and, more specifically, its acquisition or creation, along with its dissemination and
integration within the organization, become a key strategic resource to OL. OL is seen as a dynamic process based on knowledge,
which implies moving among the different levels of action, going
from the individual to the group level, and then to the organizational level and back again (Crossan, Lane, & White, 1999; Huber,
1992).
As a viewpoint of system, Ke and Wei (2006) have discussed
and identied knowledge is the antecedent and base of OL. Thus,
this study propose,
H2: Knowledge management will affect organizational learning
positively.
The rms learning capabilities play a crucial role in generating
innovations (Sinkula, Baker, & Noordewier, 1997). Innovation implies the generation, acceptance, and implementation of new ideas,
processes, products, or services. Organizational innovation is dened as the application of ideas that are new to the rm, whether
the newness is embodied in products, processes, and management
or marketing systems (Weerawardena, OCass, & Julian, 2006). It is
obvious that an organizational learning is closely related to organizational innovation.
In Calantone, Cavusgil, and Zhao (2002), we got the conclusion
that the higher the level of learning orientation, the greater the degree of rm innovativeness in American R&D mangers. In Weerawardena et al. (2006), they concluded the higher the learning the
greater the organizational innovation.
What one may see as drivers of the innovation processes within
rms is their learning. After empirical test, they indeed veried the
relationship between learning and organizational innovation. In
other words, learning will inuence organizational innovation positively. Therefore, this study propose,
H3: Organizational learning will inuence organizational innovation positively.

2.3. Organizational learning

In this rapid change economics volatility and uncertainty, many
organizations are striving to survive and remain competitive. In or-

From literature review, knowledge management will affect organizational learning positively (Garratt, 1990; Su et al., 2004). And
organizational learning will inuence organizational innovation

1098

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

positively (Calantone et al., 2002; Weerawardena et al., 2006). Darroch (2003) also found that knowledge acquisition had more
indirect than direct inuence on innovation. Therefore, this study
propose,
H4: Organizational learning will be a mediator between knowledge management and organizational innovation.
Therefore, this study utility a perspective of system which takes
knowledge management as an important input, and organizational
learning as a key process, and organizational innovation as a critical output. Fig. 1 shows the perspective of system among these
three constructs.
According to the literatures, this study constructs the research
framework which is shown in Fig. 2.
After reviewing literatures, this study constructs a knowledge
map in Fig. 3. Fig. 3 shows the relationships between any two variables, and the whole picture about our research. It says the relatively positions to each variable. Fig. 2 also shows: (1) Grant
(1996), Gorelick and Tantawy-Monsou (2005), Pilar et al. (2005)
and Ke and Wei (2006) mentioned knowledge management would

Input

Knowledge
Management

Process

Output

Organizational
Learning

Organizational
Innovation

Fig. 1. Perspective of system.

Knowledge Management:
Knowledge Acquisition
Knowledge Conversion
Knowledge Application
H2

H1
H4

Organizational Learning:
Management commitment
System perspective
Openness and experimentation
Knowledge transfer and integration

H3

Organizational Innovation:
Behavior Innovation
Product Innovation
Process Innovation
Market Innovation
Strategic Innovation

inuence organizational learning from 1996 to 2006. (2) From

1998 to 2005, Davenport and Prusak (1998) and Darroch (2005) argued that knowledge management would inuence innovation. (3)
From 1998 to 2005, Hurley and Hult (1998), Mavondo, Chimhanzi,
and Stewart (2005) and Weerawardena et al. (2006) claimed organizational learning would inuence innovation.
3. Research methodology
This study use quantitative survey to test inferred hypotheses
empirically. In this part, we showed the sample, operational denitions, and measurements of research variables.
3.1. Sample
The knowledge-intensive sector was selected because of having
short product life cycles and high demand for knowledge input.
These were identied by Liao, Fei, and Chen (2007) as those that
stand to benet from organizational capabilities in a knowledge
economy. Thus, the results of surveys involving Taiwanese information technology and nancial rms provide a rich data set of
information regarding KM, organizational innovation, and OL.
In Taiwan Economic Forum, knowledge-intensive industry to
real GDP was 36.7% in 2004. According to Ministry of Economic Affairs reports, the percentage of value-added, which created by Taiwans domestic knowledge-intensive services to the GDP increased
from 37.7% in 1991 to 43% in 2001. Clearly speaking, Taiwans
domestic industry structure is rapidly shifting towards a more
knowledge-intensive approach.
The rms selected for empirical study were chosen from the
companies listed in Common Wealth Magazines Top 1000 manufacturers and Top 100 nancial rms in 2007 by mails. Therefore, a
total of 600 questionnaires were mailed between June 2007 and
September 2007, with 327 valid and complete responses used for
subsequent quantitative analysis. The useable response rate was
54.5%. The descriptive statistics for samples are listed in Table 1.
3.2. Measurement
In this study, ve-point Likert scale (1 totally disagree to 5 totally agree) was used. The questionnaire was rened based on a pilot study conducted with managers, and pre-tested conducted with

Fig. 2. Research framework.

Knowledge
Management

Grant R.M.(1996) Toward a knowledge-based theory

of the firm, Strategic Management Journal.
Davenport & Prusak(1998) Working
Gorelick and Tantawy-Monsou (2005) For performance through learning,
Knowledge: How Organizations Manage What
knowledge management is critical practice.The Learning Organization
They Know. Harvard Business School Press
Pilar Jerez-Gomez et al. (2005) Organizational learning capability:
Darroch & MaNaughton (2002) Examining the link
a proposal of measurement. Journal of Business Research
between knowledge management practices and types
WeiLing Ke and Kwok Kee Wei(2006) Organizational learning process: Its of innovation. Journal of Intellectual Capital
antecedents and consequences in enterprise system implementation. Journal
Jenny Darroch(2005) Knowledge management, innovation,
of Global Information Management
and firm performance. Journal of knowledge management
Organizational
Learning
Robert F. Hurley & G. Tomas M. Hult(1998) Innovation, market
Organizational
orientation, and organizational learning: An integration and empirical
Innovation
examination. Journal of Marketing
Mavondo et al.(2005) Relationship with innovation, human resource
practices and performance. European Journal of Marketing
Weerawardena et al.(2005) Does industry matter? Examining the role of industry structure and
organizational learning in innovation and brand performance. Journal of Business Research
Fig. 3. Research map.

1099

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

Table 1
The descriptive statistics for samples.
Descriptive statistics

Items

Numbers

Percentage (%)

Industry

Manufacturing
Finance

164
163

50.2
49.8

Gender

Male
Female

163
164

49.8
50.2

Education

Senior High
College
University
Graduate School

2
45
203
77

0.6
13.8
62.1
23.5

Position

Production
Management
R&D
Others

9
128
72
118

2.8
39.1
22
36.1

Years in company

1(below)3 years
45 years
610 years
11(above) years

143
57
91
36

43.7
17.4
27.8
11

those different from pilot. The format and content of the questionnaire were initially developed from thorough literature review.
This study adopts three dimensions from Gold et al. (2001).
They are knowledge acquisition, knowledge conversion, and
knowledge application except knowledge protection because it
will decrease knowledge transfer and integration. Organizational
learning is dened as the activities which organizations do in
transformation of learning capability including individuals and
competitors (Pilar et al., 2005). It is considered to be four dimensions: management commitment, system perspective, openness
and experimentation, and knowledge transfer and integration.
Organizational innovation is dened as ve dimensions: they are
behavior, product, process, market, and strategic innovations
(Wang & Ahmed, 2004).

(2) Relationship between knowledge management and organizational learning: Knowledge management is positively
related to organizational learning, meaning that business
with more knowledge management show higher capability
in enhancing organizational learning.
(3) Relationship between organizational learning and organizational innovation: Organizational learning is positively
related to organizational innovation, meaning that business
with more organizational learning show higher capability in
enhancing organizational innovation.
Correlations can only reveal the degree of relationship between
constructs. To further understand the direct and indirect effects, as
well as mediating effects among the constructs, further analysis by
structural equation model is required.

4. Results
4.2. Measurement model
4.1. Correlation analysis
LISRELs 8.7 maximum likelihood program is implemented to
test the theoretical model proposed, as shown in Fig. 4. This structural equation model approach is characterized by its exible
interplay between theory and data, as well as its bridging of theoretical and empirical knowledge for a better understanding of the
real world (Fornell & Larcker (1981)). Such analysis allows for
modeling based on both latent variables and manifest variables,
which is a property well suited for the hypothesized model, where
most of the represented constructs are abstractions of unobservable phenomena. Furthermore, structural equation modeling

Table 2 displays the means, standard deviations of variables and

their correlations. As can be seen, the following relationships exist
between the research variables:
(1) Relationship between knowledge management and organizational innovation: Knowledge management is positively
related to organizational innovation, meaning that business
with more knowledge management show higher capability
in enhancing organizational innovation.
Table 2
Means, standard deviations, and correlations of research dimension.
Variables
KAC
KCO
KAP
MC
SP
EX
TR
BEN
PDU
PRO
MAR
STR
Mean
SD
**

2
.761
.730**
.689**
.576**
.553**
.599**
.561**
.484**
.472**
.581**
.374**
.489**

3.73
.454

Signicant at p < :01.

.700
.760**
.532**
.507**
.569**
.500**
.490**
.431**
.522**
.358**
.447**
3.68
.450

.807
.577**
.575**
.639**
.610**
.554**
.537**
.596**
.440**
.555**
3.78
.452

.676
.675**
.732**
.670**
.698**
.457**
.583**
.436**
.520**
3.43
.565

.702
.605**
.596**
.576**
.465**
.570**
.415**
.486**
3.48
.600

.656
.675**
.706**
.470**
.606**
.403**
.532**
3.56
.542

.536
.568**
.448**
.512**
.347**
.518**
3.53
.527

.734
.544**
.653**
.522**
.590**
3.42
.582

.710
.705**
.765**
.638**
3.34
.586

10

.697
.658**
.598**
3.50
.513

11

12

.721
.599**
3.12
.595

.439
3.37
.492

1100

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

Fig. 4. Theoretical model.

considers errors in measurement, variables with multiple indicators, and multiple-group comparisons. Table 2 shows the means,
standard deviations and correlation coefcient of each research
variables, to use as analysis of the signicance level of the relationship that exists between the analyzed aspects.
In terms of the quality of measurement model for the full sample, the constructs display satisfactory levels of reliability, as indicated in Table 1 diagonal from .54 to .81 (Nunnally, 1978). Table 3
indicates the tting index of measurement of each construct. Convergent validity can be judged by considering both the signicance
of the factor loading and t-values. All the multi-items constructs t
this criterion, and the loading is signicantly related to its underlying factor (t-values greater than 1.96) in support of convergent
validity (see Table 4). To assess discriminate validity, a series of difference tests on the factor correlations among all the constructs

Table 3
Index of conrmatory factor analysis.
Index

KM

OL

INN

GFI
SRMR
RMSEA
NNFI
CFI

.86
.06
.077
.94
.95
546.3
186
2.94

.92
.049
.063
.97
.97
225.11
98
2.3

.84
.071
.093
.94
.95
611.63
160
3.82

v2
DF
Normed chi-square

Table 4
Reliability and convergent validity.
Variables

Reliability

t-Value

KM

.890

.75
.73
.76

.44
.46
.42

OL

.884

.79
.71
.73
.70

.38
.49
.46
.51

14.69***
14.27***
15.04***
16.09***
14.06***
14.52***
13.60***

.69
.76
.80
.68
.68

.52
.42
.35
.54
.54

13.64***
15.48***
16.79***
13.23***
13.24***

INN

***

.892

jtj = 3:29, at p .001 level.

(Anderson & Gerbing, 1988). This was done for one pair of variables
at a time by constraining the estimated correlation parameter between them to 1.0 and then performing a difference test on the values obtained for the constrained and unconstrained models
(Anderson & Gerbing, 1988). The resulting signicant difference
in indicates that the two constructs are not perfectly correlated
and that discriminate validity is achieved (Bagozzi & Phillips,
1982). Therefore, after two-stage analysis, we got the results of
convergent validity and discriminate validity. Based on Tables 4
and 5, all t-values show well convergent validity, and the differences of chi-square are greater than 3.84, where this is a good evidence for the dimensions discriminate validity.
4.3. Structural model
Structural equation modeling of the LISREL 8.7 is implemented
to assess the robustness of the results and the stability of the models. For the structural model, Table 6 illustrates the parameter estimates and GFI indicators. The results indicated that this structure
t the data well, v2(51, n = 327) = 148.18, p < :01, CFI = .98,
NNFI = .97, RMSEA = .076.
Table 7 shows the structural model with the standardized coefcients for the research sample. The result reported in Table 6 provided sufcient support for hypothesis 1. Knowledge management
is signicantly and positively related to organizational innovation,
c1 :26, t(51) = 2.67, p < :05. And the numbers in Table 5 provided
support for hypothesis 2 and 3. Knowledge management is significantly and positively related to organizational learning, c2 :78,
t(51) = 11.49, p < :05. Organizational learning is signicantly and
positively related to organizational innovation, b1 :62, t(51) =
5.88, p < :05.
However, the result reported in Table 7 provides path analysis
showing the direct and indirect effect of each constructs. After
analysis, we nd the direct effect of knowledge management
and organizational innovation, c1 :26, t(51) = 2.67, p < :01, is
Table 5
Discriminate validity.
Model

v2

DF

Dv2

KMOL
KMINN
OLINN

148.18
227.74
258
238.27

51
52
52
52

79.56*
109.82*
90.09*

Signicant Dv2 > 3:84.

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S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

Table 6
Structural parameter estimates and goodness-of-tness indices.
Hypotheses

Standardized coefcients

Knowledge management ? Organizational innovation c1

Knowledge management ? Organizational learning c2
Organizational learning ? Organizational innovation b1
v2 (32 d.f.) = 148.18
Standardized RMR = .047

H1
H2
H3

Paths

.26
.78*
.62*
GFI = .93
NNFI = .97

t-Value

Result

2.67
11.94
5.88
CFI = .98
RMSEA = .076

Supported
Supported
Supported

Signicant at p < :001.

Table 7
Direct and indirect relationship.
Variables

Endogenous
Organizational learning

Exogenous
Knowledge management
Direct
Indirect
Total

Organizational innovation

Effect

t-Value

Effect

t-Value

.78***

11.94

.26**
.48***
.74***

2.67
5.62
10.51

.62***

.61***

5.88

5.83

Endogenous
Organizational learning
Direct
Indirect
Total
*
**
***

jtj = 1:96, at p .05 level.

jtj = 2:58, at p .01 level.
jtj = 3:29, at p .001 level.

signicant, and indirect effect is .48, t(51) = 5.62, p < :001 as

shown in Fig. 4. Indirect effect is bigger than direct effect. Therefore, we nd that organizational learning mediate the relationship
between knowledge management and organizational innovation
this is support for H4.
After path analysis, knowledge management will affect organizational innovation by organizational learning. Therefore, organizational learning is an important mediator between knowledge
management and organizational innovation. This model is totally
new to the research formerly. Since knowledge management is
an important input, rms will exercise organizational learning well
in order to increase organizational innovation. If rms cannot learn
from their individual and group knowledge, there will be no innovation in these rms.
5. Discussion
5.1. Discussion
This study proposes and tests a comprehensive model that
explicitly articulates the role of various key variables that in past
research received only partial and independent attention. The major ndings and the implications are discussed as follows.
Firstly, the results show that the relationship between knowledge management and organizational innovation is signicant
and positive. This nding is consistent with the research by Davenport and Prusak (1998) and Darroch (2005).
Secondly, the results of the structural equation model indicate
that knowledge management will affect organizational learning
positively. This nding shows that with more knowledge management in organizations, there is more organizational learning capability. This nding is consistent with the research by Pilar et al.
(2005), which indicated that knowledge management is a key strategic resource to organizational learning (see Fig. 1). Compare with

Lin and Lee (2004), this paper contribute that knowledge management affect organizational learning directly. Via empirical evidence, knowledge management will affect organizational learning.
Thirdly, the results indicate that there is sufcient evidence to
support a relationship between organizational learning and organizational innovation. This empirical evidence implies that organizational learning has affected organizational innovation in this
study. This study considers that the organizational learning could
lead to this solution. This result concurs with Weerawardena
et al. (2006) and Liao et al. (2008) who shows that the more organizational learning, the more organizational innovation. Accordingly, this study encourages organizational learning including
organizations and members to each other, to increase organizational innovation. Organizations and members should learn by active, novelty ways instead of learning inertia. Once, learning
inertia exist, it will has negative effect on organizational learning
(Liao, Fei, & Liu, 2008).
Fourthly, the main theoretical contribution of this study to the
organizational learning is its mediation of knowledge management
and organizational innovation. Empirical evidence shows that the
relationship between knowledge management and organizational
innovation is signicant with a direct effect smaller than indirect
effect. Accordingly, this paper contribute that organizational learning triggers the relationship between knowledge management and
organizational innovation. In other words, in order to increase
organizational innovation, knowledge must execute via organizational learning. Organizational innovation will show out if business
can implement organizational learning in knowledge-intensive
industry.
Traditionally, many authors mixed the knowledge management
and organizational learning (Victor et al., 2006). Therefore, authors
ignore the importance of organizational learning. This study rst
considers organizational learning as a mediator variable. And after
empirical evidence analysis, knowledge management is seemed as

1102

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

an input, and organizational learning is a kind of process, organizational innovation will appear as an outcome.

learning. By thoroughly doing organizational learning, KM implementation will lead to organizational innovation.

5.2. Practical implications

References

Knowledge management practice has been taken for many

years. But the efciency of KM depends on many factors. This study
tried to declare the importance between knowledge management
and organizational learning. From empirical evidence, we found
that business must implement knowledge management thoroughly, and accompany with organizational learning, then organizational innovation will spread out. If one organization ignores the
organizational learning, knowledge management wont promote
the organizational innovation directly. Therefore, organizational
learning plays a bridge role to connect knowledge management
and organizational innovation. More strictly speaking, organizational learning links the weakness between knowledge management and organizational innovation.
Therefore, business does not only carry out knowledge management to increase innovation. Organizational learning will promote
organizational innovation after one business accomplishing KM.

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5.3. Potential limitations

Of course, there are some limitations to this study. Notably, it is
a single sourcing, self-reporting. Our research is prone to common
method bias. We check this potential problem with the Harman
one-factor test (Podsakoff & Organ, 1986). An unrotated factor
analysis of 12 variables resulted in a 12-factor solution, as expected, which accounted for 60.7% of the total variance; and rst
Factor accounted for 29.3% of the variance. Because a single factor
did not emerge, and Factor 1 did not explain most of the variance,
common method bias is unlikely to be a concern in our data.
Also, using a cross-sectional data with questionnaires was another limitation of this study. In the future, this limitation should
be overcome using longitudinal data.
Aside from the limitation of self-report research, the generalizability of sampling is another limitation of this study. We conducted in a specic nation context, Taiwan rms. It is important
to note that readers should be cautious when generalization the results to different cultural contexts. Furthermore, the sample size is
relative small, requiring the increased sample size.
5.4. Future works
Future research should investigate the antecedents of KM. In
this study, we studied three KM capabilities. In future studies,
knowledge transformation, knowledge protection, etc., can be
studied in the context of KM. In addition, inclusion of the moderator variables, such as industry type, culture type, national type, into
the model can be studied. Further, the interrelations among OL,
and organizational innovation can be investigated in detail.
6. Conclusion
This study demonstrates the importance of knowledge management and the relationship among organizational learning and
organizational innovation. Based on 327 valid subjects, this paper
implements a structure equation modeling to test the research
framework and hypotheses. The results show that knowledge management is an important input to organizations, and organizational
learning is a mediator. Knowledge management will signicantly
affect organizational innovation. But, through organizational learning, KM will have more impact to organizational innovation. Therefore, for managers, one organization should do organizational

S.-H. Liao, C.-c. Wu / Expert Systems with Applications 37 (2010) 10961103

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