A research about the effect of knowledge management practices on strategy formulation capabilities and business performance

The concept of strategy, despite having various definitions in the business literature, is an integral part of the management discipline today. The enterprises formulating their business strategy appropriately and implementing it in a disciplined manner achieve competitive advantage over other enterprises, and sustain their existence, growth and effectiveness. On the other hand, scientists have tried to reveal the philosophy behind the knowledge for many years. In this concern, they have studied not only the types, the management forms and the strategies of the knowledge, but also growing capabilities of enterprises by the help of knowledge. Examination of the accessible resources, however, has indicated that the effect of knowledge management practices on business strategy formulation capability has not been researched by empirical methods yet. The main purpose of this study is to examine the relationships among knowledge management practices, strategy formulation capability and business performance empirically. In this survey a questionnaire is formed by combining some variables and measures used in some articles published in international journals in a holistic way. Then, this questionnaire has submitted to top and middle level managers of the firms which are included in the "Turkey's First and Second Top 500 Industrial Enterprises-2014" list. The data obtained from 233 firms have been analyzed through SPSS and AMOS statistical package programs and Hayes's Process Macros for SPSS. Confirmatory Factor Analysis (CFA), reliability analysis, correlation analysis and regression analysis have been conducted. Analyses results revealed positive relationships among knowledge management practices, strategy formulation capability and business performance. The striking finding of this survey was that strategy formulation capability strengthens the effect of knowledge management practices on business performance. Therefore, it can be said that strategy formulation capability plays a moderator role in the relationship between knowledge management practices and business performance. In the conclusion part, the relationship among knowledge management practices, strategy formulation capability and business performance is explained by the help of findings in this study and the literature.