Effect of Knowledge Management Process on Organizational Performance: a Moderated Mediation Model of Knowledge- Oriented Leadership Style and Employee Engagement in the Case Of Zemen Bank S.C.
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Date
2025-06-11
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A.A.U
Abstract
This study examines the effect of knowledge management processes on organizational
performance by considering the mediating role of employee engagement and the moderating
effect of knowledge-oriented leadership style within Zemen Bank S.C. in Ethiopia. Knowledge
management plays a vital role in enhancing organizational performance, particularly in
knowledge-intensive industries such as banking. In an era where businesses must continuously
adapt to dynamic market conditions, effective knowledge management processes serve as a
strategic tool for improving efficiency, fostering innovation, and sustaining competitive
advantage. The purpose of this study is to provide empirical insights into how structured
knowledge management process contribute to organizational success, particularly in the
Ethiopian banking sector, where knowledge management remains underdeveloped. In order to
achieve these objectives, data was collected from 203 employees of Zemen Bank S.C. using a
structured survey questionnaire. The study employed Partial Least Squares Structural Equation
Modeling (PLS-SEM) via SmartPLS 4.4 to analyse the relationships among the key variables.
The findings reveal that knowledge management processes significantly influences
organizational performance both directly and indirectly through employee engagement.
Furthermore, knowledge-oriented leadership style moderates the relationship between employee
engagement and organizational performance, although it does not moderate the link between
knowledge management processes and employee engagement. The study concludes that
organizations can improve their performance by implementing structured knowledge
management processes, fostering a knowledge-sharing culture, and promoting employee
engagement. However, leadership approaches must be carefully tailored to balance knowledgedriven
decision-making with employee needs to prevent unintended consequences on
engagement. While the findings are particularly relevant to Zemen Bank S.C., they offer valuable
insights for other private banks in Ethiopia seeking to optimize their knowledge management
strategies. Future research can explore this conceptual framework in different industries,
utilizing alternative analytical approaches to validate and expand these insights.