The product and process innovations through the strategic alignment of knowledge management

This study investigated the different types of innovations realized according to the alignment patterns of business strategies with knowledge management (KM) strategies in manufacturing firms. Based on the usage levels of the target costing systems and information technology infrastructure, four forms of KM strategies were proposed: explorative, exploitative, mixed, and negative. Using cluster analysis, we empirically showed four types of KM strategies and three kinds of business strategies (i.e. differentiation, low-cost, and composite business strategies). From the results of this study, it was found that when a low-cost strategy is aligned with the explorative strategy, knowledge creation is relatively more activated, and the degrees of process innovations are more enhanced. The empirical results also showed that if the alignment of a differentiation strategy with an exploitative strategy is achieved, the levels of knowledge transfer or sharing and storage, and the degrees of product innovations increase more. In the case of the alignment of the composite business strategy with the mixed strategy, it was observed that with tight alignment, the levels of KM activities as well as the degrees of process and product innovations are more enhanced.