Transforming Knowledge into Innovation: The Critical Role of TQM in Certified Family-Owned SMEs

DOI: https://doi.org/10.65967/cpbo.v2i2.60

Authors

  • Ilham Nuryana Fatchan Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto, Purwokerto, Indonesia
  • Meydy Fauziridwan Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto, Purwokerto, Indonesia

Knowledge Management Practices, Total Quality Management, Organizational Innovation, ; Small and Medium-Sized Enterprises, Innovation Performance

Abstract

This study examines the influence of Knowledge Management (KM) on innovation, encompassing both product innovation and process innovation, through the mediating role of Total Quality Management (TQM). Data were collected from 130 certified family-owned SMEs and analyzed using Structural Equation Modeling (SEM) to evaluate the proposed conceptual framework. The findings indicate that KM has a significant positive effect on TQM, while TQM positively influences both product and process innovation. However, the direct relationship between KM and innovation was found to be insignificant. In contrast, KM exerts a significant indirect effect on both product and process innovation through TQM, demonstrating that TQM fully mediates the relationship between KM and innovation. These results suggest that knowledge management practices alone are insufficient to generate innovative outcomes unless they are supported by a structured quality management system that facilitates the effective transformation of knowledge into innovation. Although the study provides valuable insights into the interaction among KM, TQM, and innovation, its generalizability is limited because the sample consists solely of family-owned SMEs. Future research is therefore encouraged to examine this framework across broader industrial and service-sector contexts. From a practical perspective, the findings highlight the importance of integrating KM initiatives with TQM practices to enhance organizational innovation capabilities. This study also contributes to the literature by demonstrating that the impact of KM on innovation is not direct but is fully transmitted through Total Quality Management, challenging the conventional assumption that KM independently drives innovation performance.

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2026-04-06

How to Cite

Transforming Knowledge into Innovation: The Critical Role of TQM in Certified Family-Owned SMEs. (2026). Current Perspective on Business Operations, 2(2), 180-193. https://doi.org/10.65967/cpbo.v2i2.60

How to Cite

Transforming Knowledge into Innovation: The Critical Role of TQM in Certified Family-Owned SMEs. (2026). Current Perspective on Business Operations, 2(2), 180-193. https://doi.org/10.65967/cpbo.v2i2.60

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