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For improving innovation and business performance, developing a robust knowledge management (KM) strategy is a pivotal step for firms. Still, literature pertinent to strategic knowledge management system alignment (SKMSA) is largely lacking and, unfortunately, offers a limited understanding of how SKMSA affects firms’ business performance. Thus, the study’s primary objective is to investigate the effects of SKMSA on performance indicators such as innovation and business performance. This study thus proposes a robust model to explore how the SKMSA, in the dimensions of reward, trust, knowledge map, and knowledge codification, impacts firms’ innovation and business performance using a partial least squares structural equation modelling (PLS-SEM) approach. Our analysis of survey data shows that SKMSA has a positive and significant impact on both KM performance and KMS performance. Further, KM performance and KMS performance are found to have a significant positive relationship with innovation performance and business performance. The study’s findings will help managers develop SKMSA strategies and improve innovation and business performance.

Aligning strategy with knowledge management system for improving innovation and business performance