Applied process knowledge and market performance: the moderating effect of environmental uncertainty

Abstract

Challenges the idea of an unconditional and positive influence of knowledge on performance without regard to environmental uncertainty. Focuses on applied process knowledge spanning the supply chain (i.e. considers supplier, internal, and customer sources). A survey of 208 manufacturing firms found the association between applied process knowledge and firm market performance is positive and statistically significant when demand unpredictability is high (but not when low); statistically significant when product churning (uncertainty) is high (but not when low); and not moderated by core production or logistics process change. Firm size and production technology were also controlled. Firms that can determine the moderating effect of the different types of environmental uncertainty they face upon their knowledge‐performance relationship will perform better in terms of market performance indicators.

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