The Effect of Change Management and Knowledge Management on Organizational Performance: The Mediating Effect of Innovation Capability
DOI:
https://doi.org/10.37641/jimkes.v14i1.3824Keywords:
Change Management, Digital Transformation, Innovation Capability, Knowledge Management, Organizational PerformanceAbstract
This study investigates how change management and knowledge management affect organizational performance through the mediating influence of innovation capability in an Indonesian IT managed services provider navigating digital transformation challenges. The main objective of this research is to investigate the direct and indirect effects of change management and knowledge management on organizational performance through the mediating influence of innovation capability. A quantitative explanatory approach was employed, with data collected via structured questionnaires from 120 employees actively involved in relevant processes at the company. Variance-based structural equation modeling using SmartPLS software analyzed the relationships among the constructs. The results indicate that knowledge management has a strong positive effect on innovation capability, which in turn significantly influences organizational performance. Innovation capability partially mediates the relationship between knowledge management and organizational performance. In contrast, change management shows no significant effect on innovation capability or its mediation role, though it directly contributes to organizational performance. The model explains moderate variance in both innovation capability and organizational performance. In conclusion, knowledge management primarily drives innovation-led performance in this digital service context, whereas change management supports performance through operational alignment rather than creative mechanisms.
Downloads
References
Abbasi, E., Amin, I., & Siddiqui, S. (2022). Towards developing innovation management framework (IMF) for ICT organizations at Pakistan. Journal of Innovation and Entrepreneurship, 11(1), 45-55.
Ahmad, S., Omar, R., & Quoquab, F. (2021). Family firms’ sustainable longevity: the role of family involvement in business and innovation capability. Journal of Family Business Management, 11(1), 86-106.
Al Taweel, I. R., & Al-Hawary, S. I. (2021). The mediating role of innovation capability on the relationship between strategic agility and organizational performance. Sustainability (Switzerland), 13(14), 13140-13150.
Bayhan, Bekir Ç., & Korkmaz, Oya. (2021). Relationship between innovation management and innovative organizational culture in logistics companies: A study in the City of Mersin. Istanbul Business Research, 50(1), 103–126.
Brumadyadisty, G. (2025). Implementation of core values “BerAKHLAK” In improving professionalism and performance of state civil apparatus. Journal of Business Management and Economic Development, 3(1), 216–235.
Cohen, S., & Wills, T. A. (1985). Stress, social support, and the buffering hypothesis. Psychological Bulletin, 98(2), 310–357.
Cui, J. (2025). The explore of knowledge management dynamic capabilities, AI-driven knowledge sharing, knowledge-based organizational support, and organizational learning on job performance: Evidence from Chinese technological companies. Retrieved on March 6, 2025, from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5083169
Erdogan, I., Rondi, E., & De Massis, A. (2020). Managing the tradition and innovation paradox in family firms: A family imprinting perspective. Entrepreneurship theory and practice, 44(1), 20-54.
Felix, O., Efebeh, E. V., Itedjere, O. S., Young, O. U., Ayegbunam, I. F., & Chuks, N. O. (2024). Change management process and organizational performance of selected telecommunication firms in Nigeria. Revista de Gestao Social e Ambiental , 18(6), 1–19.
Guerra‐López, I., & Dallal, S. E. (2021). A content analysis of change management strategies used in technological transitions in higher education institutions from the lens of a strategic alignment framework. Online Learning, 25(3), 532-550.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24.
Inków, M. (2020). Organizational innovation capability as a result of knowledge management processes - a literature review. Management, 24(1), 143–156.
Jones, R. A., Jimmieson, N. L., & Griffiths, A. (2005). The impact of organizational culture and reshaping capabilities on change implementation success: The mediating role of readiness for change. Journal of management studies, 42(2), 361-386.
Kamalrulzaman, N. I., Ahmad, A., Ariff, A. M., & Muda, M. S. (2021). Innovation capabilities and performance of Malaysian agricultural smes: The moderating role of strategic alliance. International Journal of Business and Society, 22(2), 675-695.
Kaplan, R. S., & Norton, D. P. (1996). Linking the balanced scorecard to strategy. California management review, 39(1), 53-79.
Kastelli, I., Dimas, P., Stamopoulos, D., & Tsakanikas, A. (2024). Linking digital capacity to innovation performance: The mediating role of absorptive capacity. Journal of the Knowledge Economy, 15(1), 238-272.
Khan, M. S., Saengon, P., Charoenpoom, S., Soonthornpipit, H., & Chongcharoen, D. (2021). The impact of organizational learning culture, workforce diversity and knowledge management on innovation and organization performance: A structural equation modeling approach. Human Systems Management, 40(1), 103-115.
Kotter, J. P. (2011). Leading Change. Munchen: Vahlen.
Kova, T. B., & Zulkifli, Z. (2025). The influence of information technology utilization and internal control systems on the quality of financial reports. Jurnal Ilmiah Akuntansi Kesatuan, 13(1), 23-30.
Krisprimandoyo, D. A., Anshori, M. Y., Ahmad, J., Sufa, S. A., & Brumadyadisty, G. (2025). Enhancing innovation through knowledge sharing and quality leader–member relationships. Jurnal Ilmiah Manajemen Kesatuan, 13(3), 1421–1432.
Lee, M., Yun, J. J., Pyka, A., Won, D., Kodama, F., Schiuma, G., ... & Zhao, X. (2018). How to respond to the fourth industrial revolution, or the second information technology revolution? Dynamic new combinations between technology, market, and society through open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 4(3), 21-32.
Li, C., Ashraf, S. F., Shahzad, F., Bashir, I., Murad, M., Syed, N., & Riaz, M. (2020). Influence of knowledge management practices on entrepreneurial and organizational performance: A mediated-moderation model. Frontiers in Psychology, 11(1), 87-106.
Makhloufi, L., Laghouag, A. A., Ali Sahli, A., & Belaid, F. (2021). Impact of entrepreneurial orientation on innovation capability: The mediating role of absorptive capability and organizational learning capabilities. Sustainability, 13(10), 5399-5411.
Mordor Intelligence. (2025). Indonesia data center market size & share analysis. Retrieved on March 6, 2025, from https://www.mordorintelligence.com/industry-reports/indonesia-data-center-market
Njoroge, R. N., Muhoho, J., & Kinyua, G. (2021). Change management and organizational performance of SACCOs: Metropolitan National SACCO, Kenya. The Strategic Journal of Business & Change Management, 8(4), 81 – 95.
Pramandita, W., Umar, D., Martadisastra, D. S., & Takaya, R. (2021). The influence of authentic leadership and strategic management skills on organization performance mediated by knowledge management at TNI Academy. Business and Entrepreneurial Review, 21(1), 61-80.
Rafiq, M., Naz, S., Martins, J. M., Mata, M. N., Mata, P. N., & Maqbool, S. (2021). A study on emerging management practices of renewable energy companies after the outbreak of covid-19: Using an interpretive structural modeling (ISM) approach. Sustainability, 13(6), 3420-3440.
Rahi, S., Alghizzawi, M., Ahmad, S., Munawar Khan, M., & Ngah, A. H. (2022). Does employee readiness to change impact organization change implementation? Empirical evidence from emerging economy. International Journal of Ethics and Systems, 38(2), 235-253.
Sadq, Z., Othman, B., & Mohammed, H. (2020). Attitudes of managers in the Iraqi Kurdistan region private banks towards the impact of knowledge management on organizational effectiveness. Management Science Letters, 10(8), 1835-1842.
Sataić, I. (2021). The Impact of organizational change on change management in ICT sector in the Republic of Croatia. International Journal of Applied Research in Management and Economics, 4(1), 60–70.
Sharif, S., Tongkachok, K., Akbar, M., Iqbal, K., & Lodhi, R. N. (2024). Transformational leadership and innovative work behavior in three-star hotels: mediating role of leader-member exchange, knowledge sharing and voice behavior. VINE Journal of Information and Knowledge Management Systems, 54(1), 1-21.
Surya, V., Purwati, W. D., & Pamungkas, R. A. (2023). Work engagement as mediator of competence and self-efficacy of service quality. Riset: Jurnal Aplikasi Ekonomi Akuntansi dan Bisnis, 5(1), 055-071.
Susanty, A. I., Budiharjo, E., & Winarto, W. (2024). Achieving an agile organisation in an Indonesian telecommunications company: investigation on leadership impact and mediation variables. Journal of Science and Technology Policy Management, 15(1), 6-30.
Swanson, E., Kim, S., Lee, S. M., Yang, J. J., & Lee, Y. K. (2020). The effect of leader competencies on knowledge sharing and job performance: Social capital theory. Journal of hospitality and tourism management, 42(1), 88-96.
Urbancová, H., & Depoo, L. (2021). Factors affecting strategic types of organizational culture: Evidencefrom organizations and managers operating in the Czech Republic. Management and Production Engineering Review, 12(1), 48-59.
Wavei, E. B. (2023). An investigation into the adoption of knowledge management processes in hotels’ customer relationship management value chain in Ghana. Kowloon: Hong Kong Polytechnic University.
Welch Jr, J. S. (2020). Leaving your mark: seven strategies for indelible leadership. The Journal of Values-Based Leadership, 13(2), 12-22.
Wu, S., Ding, X., Liu, R., & Gao, H. (2021). How does IT capability affect open innovation performance? The mediating effect of absorptive capacity. European Journal of Innovation Management, 24(1), 43-65.
Yusr, M. M., Othman, A. R., Mokhtar, S. S. M., & Don, M. S. (2014). How innovation capability can be a mediate between knowledge management and innovation performance?. International Business Management, 8(2), 118-125.
Zaied, A. N. H., Hussein, G. S., & Hassan, M. M. (2012). The role of knowledge management in enhancing organizational performance. International Journal of Information Engineering and Electronic Business, 4(5), 27–35.
