INTRODUCTION:

In a volatile environment, firm’s competitive advantages rely on its capability to effectively and constantly deliver innovative products to its customers; the global business environment has been changing as the speed of innovation increases by the day coupled with evolving technologies and short product life cycles (Stephen, 2014).

Organizations are required to apply new technologies and to innovate timely in anticipation of changes in the market place rather than as a reaction to business decline. Knowing when, how and what to innovate therefore is a key competence for organizations Knowledge is the key resource that must be managed if improvement efforts are to succeed and businesses are to remain competitive in the global markets Knowledge management is about supporting innovation, the generation of new ideas and the exploitation of the organization’s thinking power. The essence of knowledge management (KM) with respect to innovation is that it provides a framework for management in their attempt to develop and enhance their organizational capability to innovate) Ebrahim et al, 2017). previous studies used knowledge management as one dimension (Coling, 2017) used tacit knowledge, other used knowledge management as two dimensions (Muhammad et al, 2017) used (knowledge acquisition and knowledge diffusion) and (Maleeha and Tayyab, 2016), other studies addressed knowledge management as three dimensions (Rose et al, 2017) used: knowledge acquisition, knowledge sharing and knowledge application, (Lemlem, 2017) used: organization culture, organization knowledge and information technology. Eugenie et al, (2016) used: knowledge acquisition, knowledge sharing and responsiveness knowledge. According to Ran (2017) knowledge management used as four dimensions (acquisition, sharing, storing, application) which were used in this study.

Pervious scholars have showed that successful application of knowledge management (Rose et al, 2017), (Mohammed et al, 2017), (Samina et al, 2015). In contrast, there are limited studies which addressed the knowledge management and relationship innovation capabilities (Eugenie et al, 2016), (Ebrahim et al, 2017), (Marianne and Danny, 2017), (Dinesh et al, 2017), (Maleeha and Tayyab, 2016), the previous studies used innovation capabilities as two dimensions, (Vafaeid et al, 2017) and others researchers used three dimensions (Titus et al, 2017, Maleeha, 2016). In this study used innovation capabilities as two dimensions namely: radical innovation and incremental innovation. In contrast and to some extent there is little study that explicitly addressed the innovation capabilities related to knowledge management.

Therefore, the theoretical significance of this study is try to fill the gap through the innovation capabilities (radical and incremental) and KM processes, then attempt to build a conceptual framework that will contribute to the theories, also the study will provide scientific guideline and devices through the industrial firms operating in Sudan to achieve the efficiency and the effectiveness. This study will make the mangers aware about the change and complexity of business environment.

LITERATURE REVIEW:

KNOWLEDGE MANAGEMENT:

Knowledge management is defined as helping the organization to detect, select, organize, distribute and transfer of knowledge and experience successfully for activities such as problem solving, strategic planning and decision making (Ehsan, 2017).

Knowledge management considered strategy helps the organizations to face the competition, globalization, economy and the rapid technological development through creating the effective knowledge that contributes the raising the organizational intellectual capabilities and achieving competitive advantage (Mohammad and Fayez, 2016).

Knowledge management can be defined as a combination of border experience, contextual information, norms and values that give a base for investigating and integrating new information and experiences. It prevails in the mind of individuals but from organization perspective it not only exists in the repositories but also in the daily routine activities of the organization practices (Sana, 2017).

KNOWLEDGE MANAGEMENT PROCESS:

Most of the concepts and the management schools see that knowledge management represents processes, and knowledge information come from internal and external sources do not mean anything without these processes. Knowledge management processes define as the degree to which the company creates in them the knowledge and participate in it, distribute and benefit from it in the job limits (Mohamed and Fayez, 2016).

Knowledge management process is the process of converting data into right information and delivery it to the right person in the right time. It’s the process of putting information into action in ways that will improve the company performance (Nada, 2015).

Knowledge management is the process of capturing the collective expertise and intelligence in an organization and using them to foster innovation through continued organizational learning. Effective knowledge management allows knowledge sharing and provides easy access to knowledge, know how, experience and expertise (Rose et al, 2017).

KNOWLEDGE ACQUISITION:

When the organization determines the needed level of knowledge, it determines the cognitive gap that should be reached that requires the look inside, and the organization some time demands help from external companies in developing its capabilities to attain the needed knowledge, or buys the advanced technology from the market, also can cooperate through combining its resources by the emerging processes or unification, this can help the organization attains its need of knowledge (Mohammed and Fayez, 2016). Knowledge acquisition is the creation of knowledge within the organization through a learning process, and also the acquisition of external knowledge, originated in associative action with other organizations, business consulting, and universities (Rodrigo and Manoel, 2017).

KNOWLEDGE SHARING:

Knowledge sharing techniques have been a subject of interest for many scholars of strategy with majority of companies analyzed indicating that beneficial consequences of their use had been realized (Lillian, 2018).

Knowledge sharing is exchange of employee’s knowledge, experience, and skills across the whole organization. Employees share knowledge by talking to their colleagues, by helping one another and by seeking the way to get something done better, more quickly and efficiently (Eugenie, 2016).

There are many definitions for the knowledge sharing some named it as knowledge dissemination, knowledge transfer or knowledge distribution among employees. Knowledge transfer requires a group or individuals desire to work with others, and share knowledge is mutual interest, thus if there was not involved in the knowledge sharing it is almost impossible for the knowledge that passed from one person to another person. So knowledge participation is essential condition of knowledge building (Mahmoud and AS ad, 2016).

KNOWLEDGE STORING:

The creation of new knowledge is not efficient, having mechanism to store and retrieve the knowledge when needed is more important. This give rise to organization memory concept, which simply means the existence of knowledge in various structures and formats (i.e., electronic databases written documentations, individual and team tacit knowledge and codified knowledge (Abubaker et al, 2017).

Knowledge storage means the process of keeping the knowledge in the organizational knowledge based and it’s measured by the extent of the availability of database and information system to store information and take necessary procedures to protect this knowledge from misuse or theft (Laith et al, 2015). The knowledge storage refers to the organizational memory formation process, in which knowledge is formally stored in physical memory systems and in formally retained as values, rules and beliefs that are associated to culture and organizational structure (Rodrigo and Manoel, 2017).

KNOWLEDGE APPLYING:

Knowledge application includes applying knowledge action, problem solving and for decision-making protection which can ultimately result in knowledge creation. The created knowledge needs to be captured, shared and applied; hence, the cycle ensues (A bubaker et al, 2017). This process also means to put knowledge into practice, where employees should apply lessons learn from previous experience or mistake Knowledge application also defined as organization response of knowledge, and that reflect the organization ability to respond to different types of information that has access to it (Lee et al, 2013). Knowledge application includes the application of decision – making protection, action and problem solving which final lead to knowledge creation (Allamah and Zare, 2011).

This process involves the usage of knowledge in adjusting the strategic direction, solving the problems, making decision, improving the efficiency and reducing costs. The individual can make use of the knowledge possessed by other individuals without actually learning that knowledge, if the organization wants to capitalize the knowledge they should know how the knowledge is created, disseminated and used as these processes are the basic for an effective organizational knowledge management (Colin, 2017).

THE CONCEPT OF INNOVATION CAPABILITIES:

The concept of innovation is central to economic growth, and it can lead to sustained competitive advantage, which is something that firms should strive to achieve. Innovation is intentional and it requires that individuals are motivated (Tobias, 2017).

Innovation is integrating capacity of a firm about bringing out new implementations from current knowledge. At the same time innovation capacity is the capability to develop new versions and make necessary changes in the direction of market demand. Innovation capacity is factor that can be the improved by working. Innovation capacity is the method and capacity of a firm to produce innovative output (Fikret, 2018). Innovation in general the implementation of a novel or drastically improved product, process, marketing or organizational methods in workplace organization, business practices, or external relations, Innovation is recognized as one of growth strategies to enter new markets, to increase market share and to provide the company with competitive edge.(Seyed et al, 2018).

RADICAL INNOVATION:

involves creation of new markets or making deeper changes that destroy existing positions on the market today and make obsolete current products. However the result of radical innovation is uncertain to assume greater levels of risk and harder to put into practice (Marcelo et al, 2016). Radical innovation is offering of new-to-the-world performance features, or significant improvements in known ones. Radical innovation provides substantially higher customer benefits compared to previous products in the industry. Based off the model, radical innovation provides the highest degree of newness technology and the highest degree of customer fulfillment (Tobias, 2017).

Radical innovation is ground breaking, frame breaking, discontinuous, disruptive change in technology, product or process. These cause profound organizational and market changes. Radical innovation is seen my many as critical future success of organizations (John, 2018).

INCREMENTAL INNOVATION:

are minor improvements or simple adjustments in current technology, and that improve price/or performance advance at a rate consistent with existing technical trajectories (Patrick et al, 2018).

Incremental innovations can easily be defined as products that provide new features, benefits, or improvements to the existing technology in the existing market. An incremental new product involves the adaptation, refinement and enhancement of existing products and /or production and delivery system (Rosanna and Roger, 2018).

Incremental innovation is the most common type of innovation in most companies in general companies spends around 80precent of their total innovation investment. Incremental innovation usually causes changes in one or two levers of the business model or technology change. It’s the way to obtain much value from the products or services that the firm already has without making hug changes of important or strong investment (Boris, 2013).

KNOWLEDGE –BASED VIEW OF KM AND INNOVATION:

The essence of knowledge management (KM) with respect to innovation is that it provides a framework for management in their attempt to develop and enhance their organizational capability to innovate. Cohen and Levinthal (1990) label this as absorptive capacity. It defines the ability of an organization to recognize the value of new external information and knowledge, assimilate, and apply them, and this ability is critical in determining an innovative result. Extending this idea, Fiol (1996) argued that the potential of organizations to generate innovation capabilities is dependent on the previous accumulation of knowledge that they have absorbed.

HYPOTHESES DEVELOPMENT:

1. Knowledge management processes and innovation capabilities:

In accordance ith the findings in literature knowledge management processes were posited to have a significant and positive relationship with innovation capabilities, (Samina et al ,2015) states that the role of knowledge management in the implementation with the help of knowledge management process and strategies which eventually leads to innovation ,(Eugenie et al,2016) indicates a significant effect of innovation in the relationship between knowledge management and business performance ,(Jeevan et al,2015) investigates that significant relationship between knowledge management and innovation capacity,(Ebrahim et al,2017) emphasizes the importance of knowledge management and links it with innovation ,positive impact of knowledge management and knowledge management strategy on innovation. Therefore, based on the above discussions the following hypotheses are generated:

H1. Knowledge managementprocesses are positively relates to innovation capabilities.

H1.1. knowledge acquisition is positively related to radical innovation

H1.2.knowledge sharing is positively related to radical innovation.

H1.3. knowledge storing is positively related to radical innovation

H1.4. knowledge application is positively related to radical innovation.

H1.5.knowledge acquisition is positively related to incremental innovation

H1.6. knowledge sharing is positively related to incremental innovation.

H1.7. knowledge storing is positively related to incremental innovation.

H1.8. knowledge application is positively related to incremental innovation

RESEARCH METHODOLOGY:

The study relied on the descriptive approach through the use of the tools of descriptive analytical statistics, and relied on the two types of data being primary data and secondary data. The questionnaire was relied upon as a main data-collection tool, as it was designed according to the five-point Likert scale which consists of five levels as follows: strongly agree, agree, neutral, disagree, and strongly disagree, as numbers were assigned for these phrases in the process of analysis, as follows: No. (1) Strongly disagree, number (2) disagree, number (3) neutral, number (4) agree, number (5) strongly agree.In order to verify the validity of the content of the study tool and to ensure that it serves the objectives of the study, it was presented to a group of (5) competent arbitrators in the area of business administration, and after the questionnaire was retrieved from all the experts, their observations were taken intoaccount and the proposed amendments were made.

The study population was made up of the managers of industrial firms operating in Khartoum State, the questionnaire were distributed a total number of 230 questionnaire returned 208 represent of 90%, the two research relied in the process of the statistical data analysis, on the method of Structural Equation Modeling, whichis an assumed pattern of direct and indirect linear relationships between a range of underlying and observed variables, and the path analysis method has been used specifically since it has several advantages that are appropriate to the nature of this study. The questionnaire of this study consisted of four mains sections manly the profile of company secondly, specific questions designed to measure knowledge management and specific questions designed to measure innovationcapabilities knowledge management were measured by using four dimensions (knowledge acquisition, knowledge sharing, knowledge, storing and knowledge application), the KM acquisition and KM sharing are measured by using 8 items that are adopted from Rita Musa(2013), KM storing is measured by using 4items that are adopted from (Ram et al,2017), KM application is measured by using 4items that are adopted from(Samina et al, 2015); item for innovation capabilities were measured by using two dimensions (radical and incremental) are measured by using 7items adopted from( Regien et al, 2016) .

EXPLORATORY FACTOR ANALYSIS:

The exploratory factor analysis has been performed to extract the loadings of factors with promax rotation.In conducting factor analysis, this study followed assumptions that recommended by (Hair, Anderson, Black, 2010). Firstly, there must be sufficient number of statistically significant correlations in the matrix. Secondly, Kaiser-Meyer-Olkin measure of sampling adequacy should be at least 0.6. Thirdly, Bartlett’s test of sphericity should be significant at 0.05. Fourthly, communalities of items should be greater than 0.45. Fifthly, the minimum requirement of factor loading 0.45 (since the sample size of this study 370 industrial firms managers) based on a 0.05 significant level, with value of cross loading exceeds 0.45. Also to provide a simple structure column for interpretation, the factors were subjected to promax rotation. Finally, eigenvalues should be more than 1 for factor analysis extraction.

Table (1) factor loading of observed variables

Observable variables	Factorial loading
Knowledge management process (KM)
Acquisition/in our company employees use the internet to obtain the information necessary to perform their duties	.719
our company has the ability to convert the information available from competitors to new products	.813
our company has stored information that can be converted into data that helps employees perform their tasks	.789
Sharing/Our company provides technology systems supported by internet network	.549
The business environment encourage the sharing of information	.825
The company shares information with suppliers and customers	.983
Storing/ My firm utilizes various print materials (such as newsletters, handbooks, annual reports, manuals and etc…..) to store the knowledge	.932
My firm utilizes audios, videos to store the knowledge	.547
My firm has good IT infrastructure to store the knowledge	.826
The company can provide information systems for available knowledge	.732
Application/ My firm applying experiential knowledge	.883
My firm uses available knowledge to improve it is productivity	.902
My firm undertakes a set of activities designed for using the available knowledge to solve new problems	.897
Radical innovation/The products offered by the company are entirely new	.902
The products offered by the company are new compared to competitors	.903
The company's new products are innovative	.845
Incremental innovation/my firm continuously improves the maintenance processes	.817
my firm improves the efficiency of the products and services that are delivered	.858
my firm contributes to a higher degree of usage and effectiveness of the asset	.847
In our company there is a change in the concrete aspects using modern technology	.832

Source: By researchers (2018)

CONFIRMATORY FACTOR ANALYSIS:

The statistical analysis software package was used (AMOA) to perform the process of confirmatory factor analysis for the model, as this package is uses to test the hypotheses relating to the existence or non- existence of relationship between the variables and underlying factors. The confirmatory factor analysis is also uses to assess the ability of the factor model to change from the actual dataset and also to compare several models of factors in this area. Figure 2: below show the confirmatory factor analysisfor study variables

Table (2.)Correlation and Reliability Analysis for study variables

Variables	Cronbach’s alpha	mean	Standard Deviation	1	2	3	4	5	6
1 acquisition	.649	4.13	.926	1
2 sharing	.768	3.87	0.998	.460	1
3storing	.813	4.18	1.097	.399	.826	1
4 application	.877	4.17	.88	.193	.539	.561	1
5 radical	.860	4.073	.913	.314	.491	.448	.378	1
6 incremental	.860	3.74	1.111	.277	.520	.469	.538	.557	1

Prepared by researchers (2018)

Table (3) path analysis for direct effect

	Relationship		Estimate	S.E.	C.R.	P
Incremental	<---	Knowledge application	.364	.089	4.082	***
Incremental	<---	Knowledge storing	-.025	.202	-.122	.903
Incremental	<---	Knowledge sharing	.276	.171	1.611	.107
Incremental	<---	Knowledge acquisition	.115	.142	.808	.419
Radical_	<---	Knowledge application	.199	.124	1.608	.108
Radical_	<---	Knowledge storing	.099	.290	.340	.734
Radical_	<---	Knowledge sharing	.367	.245	1.501	.133
Radical_	<---	Knowledge acquisition	.259	.206	1.257	.209

Source prepared by researchers (2018)

DISCUSSION AND CONCLUSION:

The results show that knowledge management processes (application) and innovation capabilities (incremental) significantly influence, also indicate that knowledge management processes relate positively to innovation capabilitieswhich in turn increases innovation in industrial firms. the findings consistence with previous studies (Coling, 2017, Samsir, 2017) indicate that knowledge management processes leads to innovation, while ( Mehdi and Abdolali, 2016) showed that there is a significant positive relationship between knowledge management processes and innovation, (Maleeha and Tayyab, 2016) suggest that knowledge management has a positive impact on innovation capability, (Laithet al, 2015) confirm a positive and strong effect of knowledge management processes on organizational innovation, the study found that knowledge management processes (acquisition, storing, sharing) not positive relationship to innovation capabilities (incremental) it differs between past studies and current study in cultural and environmental factors, the results show that knowledge management processes (application, sharing, acquisition, storing) not positive relationship to radical innovation, this result it different from previous studies (Samina, 2015) showed that knowledge management processes which are knowledge creation, knowledge organizing, knowledge storage, knowledge sharing and knowledge utilization have significant but indirect impact on banking industry, therefore, knowledge management processes inindustrial firms operate in Sudanese are not contributing in the enhancement of innovation capabilities.

This study has provided empirical justification for a framework that identifies four dimensions of knowledge management and describes the relationship among KM and innovation capabilities constructs within the context of industrial firms in the Sudan. Previous studies supporting the importance of KM in create innovation capabilities the major contribution of this study is the development of a dimension of KM constructs through comprehensive combination perspective; based on a survey data of 208 industrial firms, this study carries more weight especially for generalization purpose due to the limited quantitative philosophy and deduction approach in the extant literatures. This study offers a number of managerial implications. First, this study will help decision makers in firms to know the importance of KM and how KM influence the innovation capabilities Therefore, decision makers should focus on improve their KM. Second, the study highlights the importance of managerial emphasis on the creation of KM business environment and encouragement of innovative activities. Given that KM helps managers to be more connected to the business environment.

This study is subject to several limitations and leaves some areas in need of further research. First, this study tests the role of KM industrial context. Research in other settings (service) could expand the scope of KM. Second, this study use of only one respondent per company, which might be a cause of possible response bias, Thus, caution should be taken in results interpreting. Future research should endeavor to collect data from multiple members. Finally, this study focuses on industrial firms in Sudan. Future research may include firms from other service or regions to generalize the findings. It would provide valuable information for managers regarding the mapping of KM with innovation capabilities.

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Received on 12.12.2018 Modified on 14.01.2019

Asian Journal of Management. 2019; 10(2): 119-127.

DOI: 10.5958/2321-5763.2019.00020.9