Knowledge Creation Model in Creating Business Performance of Small and Medium Coffee Enterprises

Abstract

The purpose of this study is to examine the effect of knowledge creation on innovation and business performance of small and medium coffee enterprises. The study was conducted using a descriptive and verification approach involving a sample size of 98 respondents selected using the proportionate random sampling. Data were analyzed using PLS-SEM by means of SmartPLS. The results revealed that knowledge creation had a significant effect on innovation and that innovation had a significant effect on business performance. However, the effect of knowledge creation on business performance could safely be ignored as it was found insignificant. Based on the results of this study, it is suggested that small and medium coffee enterprises make various forms of innovations such as product innovation, process innovation, marketing innovation and organizational innovation to boost their business performance, but it takes ideas, creativity, and explicit knowledge for these coffee enterprises to make their innovations happen.