Mediating Role of Trust on the Effects of Knowledge Management Capabilities on Organizational Performance

Knowledge Management Capabilities (KMC) have got two major components namely processes and infrastructure. Researchers relate the effect of KMC either to the processes or its infrastructure. But many KMC studies did not consider trust as an important influential variable. This study then seeks not only to identify and compare the effects of processes and infrastructures of KMC on organizational performance of Malaysian public listed companies, but also to bring in trust as a variable that mediates between these two groups of variables. Data from 176 usable questionnaires from senior managers of companies listed in the Malaysian Stock Market (Bursar Malaysia), were analysed using Analysis of Moment Structure (AMOS) software. The findings indicate that effects of the process capabilities component of the KMC are more dominant for organizational performance than its infrastructure capabilities. In addition, the effects on organizational performance are, the sharing, utilization and acquisition of knowledge (in that order) followed by organizational culture and structure, and finally technology infrastructure. Finally, the mediating role of trust was confirmed. Thus building organizational trust between employees and manager could enhance organizational performance.