THE EFFECT OF KNOWLEDGE MANAGEMENT AND EMPLOYEE TRAINING ON PERFORMANCE OF SMALL AND MEDIUM-SCALED ENTERPRISES (SMEs): EMPLOYEE TRAINING AS A MEDIATOR

The main purpose of this study is to examine whether owners of apparel sector Small and Medium-scaled Enterprises (SMEs) in Sri Lanka are practicing knowledge management and providing training opportunities to their employees and how those practices have an effect on performance of those SMEs. Also, the mediating role of employee training between knowledge management and performance of apparel SMEs has been analyzed. A new model was developed to explain the relationship between knowledge management and employee training on the performance of apparel SMEs and also to determine whether the mediating effect of employee training is a full or partial. A sample of 235 owners of export-oriented apparel SMEs in Sri Lanka was taken for the analysis. The outcome of SPSS statistics 21.0 established the relationships. The findings of the study highlight owners of apparel SMEs are currently practicing both knowledge management and employee training at workplaces in average level. The findings further reveal a strong relationship between knowledge management and employee training on performance of apparel sector SMEs and a partial mediating effect of employee training. Accordingly, key findings of the study are a) higher the knowledge management higher the performance of apparel sector SMEs b) higher the employee training higher the performance of apparel sector SMEs c) and the employee training partially mediates the relationship between knowledge management and performance of apparel sector SMEs. The outcome of the study confirms statistical significance of the proposed hypotheses.