The Impact of Knowledge Sharing on Organisational Innovation: The Mediating Role of Customer Knowledge Management
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Abstract
Background and Objectives: Organisational innovation is increasingly driven by the effective management and sharing of market knowledge, yet small and medium-sized enterprises (SMEs) often lack the resources to compete with larger multinational corporations on this front. Grounded in the Knowledge-Based View (KBV), this study examines how market knowledge derived from customers, competitors, and suppliers shapes organisational innovation through the mediating roles of Customer Knowledge Management (CKM) and Knowledge Sharing (KS). Specifically, the study investigates the relationships between customers and CKM, between competitors and KS, and between suppliers and KS, and tests the mediating effects of CKM and KS on the link between market knowledge and four dimensions of organisational innovation: product, process, market, and behavioural innovation.
Methods: A quantitative, cross-sectional research design was employed using a structured questionnaire adapted from prior studies and measured on a 5-point Likert scale. Stratified random sampling was used to distribute the survey to 410 SMEs registered with the National Innovation Agency of Thailand, yielding 210 responses, of which 204 were deemed valid for analysis. Partial Least Squares Structural Equation Modelling (PLS-SEM), performed using SmartPLS version 4.0, was used to assess both the measurement and structural models, including tests for common method variance, reliability, convergent and discriminant validity, and bootstrapped mediation analysis with 500 resamples.
Results: The measurement model demonstrated adequate reliability and validity, with all variance inflation factors below the 3.3 threshold, confirming the absence of common method bias. Structural model results showed that customers significantly influenced CKM (β = 0.436), while competitors (β = 0.249) and suppliers (β = 0.237), together with CKM (β = 0.328), significantly influenced KS, explaining 18.2% and 38.9% of the variance in CKM and KS respectively. KS, in turn, significantly predicted all four innovation dimensions, product (β = 0.291), process (β = 0.499), market (β = 0.398), and behavioural innovation (β = 0.421). Bootstrapped mediation analysis confirmed that KS significantly mediated the relationships between competitors, suppliers, and the four innovation outcomes, supporting all 17 proposed hypotheses (H1 to H17).
Application of this study: The findings offer practical guidance for SMEs seeking to strengthen innovation capacity with limited resources. Management should prioritise systematic collection and sharing of customer, competitor, and supplier knowledge, and invest in digital platforms that support CKM, as many SMEs currently underutilise such tools. Cultivating a culture that encourages employee collaboration and continuous knowledge exchange can help organisations translate market intelligence into new products, improved processes, stronger market positioning, and adaptive behaviours, thereby strengthening their competitive advantage.
Conclusions: This study confirms that organisational innovation is significantly shaped by market knowledge acting through CKM and KS, positioning both as critical mediating mechanisms rather than peripheral organisational functions. By demonstrating the comparable importance of customers, competitors, and suppliers as market knowledge sources, the study extends the KBV to the SME context and underscores CKM and KS as strategic resources that SMEs must actively manage, through structured data practices, digital platforms, and a supportive organisational culture, to sustain innovation and competitiveness.
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