Mediating effect of Technological Innovation on the Relationship between Knowledge Management and Competitive Advantage of Telecommunication firms in Kenya

Abstract

A firm is more likely to achieve superior performance if its competitive edge is distinct and unparalleled. Thus, the study sought to examine the mediating effect of technological innovation on the relationship between knowledge management and competitive advantage of telecommunication firms in Kenya. The study was informed by the Michael Porter’s framework and knowledge-based view theories. The explanatory research design was utilized in the study. The study targeted employees from the top and middle level management of Safaricom, Airtel Kenya and Telkom Kenya. According to HR records by end of 2020 there were 602 employees from the top management and 2385 employees from the middle management from the three telecommunication firms. The sample size was 353 obtained using Yamane formula. The researcher used stratified random sampling technique to get the sample size from each firm. Questionnaires were used as the research instruments. The pilot study was conducted to examine the validity and reliability of research instruments. The study was analyzed using descriptive and inferential statistics. The study used descriptive and inferential statistics. The results found a significant correlation between knowledge management practices and the competitive advantage of telecommunication firms in Kenya. Specifically, the study found that knowledge creation (r=0.757, p<0.0001), knowledge transfer (r=0.704, p<0.0001), knowledge storage (r=0.717, p<0.0001), knowledge implementation (r=0.763, p<0.0001), and technological innovation (r=0.757, p<0.0001) were all positively associated with competitive advantage. In addition, the study found that knowledge management indirectly influence a firm’s competitive advantage through its effect on technological innovation. The study concluded that telecommunication firms should invest more in learning processes to enhance innovativeness. They should also be ready to adopt innovations in knowledge management in areas such as acquiring, sharing, storing, and applying knowledge. This can be done through the employment of competent officials as well as sufficient funding for innovations.