The Mediating Effects of Organizational Learning on the Relationship between Knowledge Management and Organizational Performance : An Applied Study on the Egyptian Commercial Banks

This study investigates the mediating significant role of OL in the relationship between Knowledge Management (KM) and Organizational Performance (OP). It intends to explore the significant role of KM in achieving superior OP. It analyzes how KM creates OL and how OL contributes to OP. KM and OL should join forces and develop a unified discipline. KM needs OL and its expanding body of good research. OL needs base of practitioners of KM and its abiding interest in problems and practice. KM and OP are believed to be essential for the success in business. Organizations and researchers have turned their attention to KM recently. Despite the growing interest and investment of resources in KM, there are few empirical studies to demonstrate the relationship between KM and OP. Understanding these relationships is essential for managers if they hope to improve OP through KM. The purpose of this research is to fill the abovementioned gap by testing the relationships between KM and their impact on OP. This study was conducted on the Egyptian commercial banks. Of the 382 questionnaires that were distributed, 310 usable questionnaires were returned, a response rate of 81%. This survey-type research is descriptive in terms of the data collection. The finding reveals that KM affects OP through OL. Accordingly, the study provided a set of recommendations including the necessity to pay more attention to KM as a key source for organizations to enhance the competitive advantage which is of prime significance for OP through OL.


Introduction
Knowledge Management (KM) is a process that transforms individual knowledge into organizational knowledge (Rašul, et al., 2012).KM is a process that helps organizations to find important information, select, organize and publish them; and it is a proficiency that will be necessary for actions like solving problems, dynamic learning, decision making (Nazari & Emami, 2012).

Literature Review
2.1 The Relationship between KM and OL KM and OL are terms commonly used in today's business environment and usually associated with large budget projects pursued by firms convinced that the only competitive advantage the company of the future will have is its ability to learn faster than its competitors (DeGeus, 1988).OL has been regarded as one of the strategic means of archiving long-term organizational success (Senge, 1990).Recently, the analysis of OL has become an increasingly important area.OL has been considered, from a strategic perspective, as a source of heterogeneity among organizations, as well as a basis for a possible competitive advantage (Liao & Wu, 2009).
OL will develop well drawing on well structured knowledge in different organizations.Business could have OL capabilities underlying well individual learning (Nonaka & Takeuchi, 1995).KM discusses different influences on OL in different organizations.Some researchers find these two focuses as cause and effect simultaneously, and some researchers take OL is a cause, KM is an effect; or opposite.In these studies, researchers implicitly assume a perspective of OL -> KM effect in which the causal direction runs primarily from OL to KM.And a KM -> OL effect could also account for the associations between KM and OL (Su, et al., 2003).
In order to develop learning abilities, organization should complete well KM process.Without KM, one organization can't develop personal or group learning abilities (Garratt, 1990, Su, et al., 2004).From literature review, the researcher found that KM has a significant impact on OL (Su, et al., 2004;Darroch, 2005).
As a viewpoint of system, Ke & Wei (2006) identified KM as the antecedent and the base of OL.OL can be considered as a latent multidimensional construct including managerial commitment, systems perspective, openness and experimentation, and knowledge transfer and integration.Knowledge, along with its dissemination; has become a key strategic resource to OL. OL is seen as a dynamic process based on knowledge, which implies moving among the different levels of action, going from the individual to the group level, and then to the organizational level and back again.In this perspective, OL is viewed as a reaction to KM rather than an action that contributes to KM in the organizations (Liao & Wu, 2009).Therefore, this research adopts KM -> OL effect which view OL is a reaction to KM at the Egyptian commercial banks.OL and OP De Geus (1988) argues that the ability to learn faster than your competitors may be the only sustainable competitive advantage and organizational superior performance.

The Relationship between
OL can be defined as a continuous testing of experience and its transformation into knowledge available to whole organization and relevant to their mission (Senge, 1990).OL is a combination of four processes: information acquisition, information distribution, information interpretation and organizational memory (Huber, 1991).
OL is a process of information acquisition, information interpretation and resulting behavioural and cognitive changes, which should in turn have an impact on OP (Dimovski, 1994).OL is considered to be one of the most promising concepts in the modern managerial literature.The concept of OL is confused with the concepts of Learning Organization (LO).LO is considered as an entity-an ideal form of organization, which has the capacity to learn effectively and hence to prosper (Tsang, 1997).
OL tends to be positive, and descriptive, the idea of LO tends to be normative and prescriptive.It is necessary to hold on to the idea of the LO as a direction while the process of OL is seen as descriptive or heuristic device to explain and quantify learning activities and events (Jones & Hendry, 1992).OL tends to focus more on internal concerns for performance and learning as part of condition of human beings within settings.OL tends to focus more on external threats as the reason for fostering learning (Kezar, 2005).
Many researchers consider OL as the fundamental aspect of competitiveness and link it with KM and OP.Jones (2000) emphasizes the importance of OL for OP defining it as a process through which managers try to increase organizational members' capabilities in order to understand better and manage an organization and its environment to accept decisions that increase OP on a continuous basis.Škerlavaj & Dimovski (2006) demonstrated the statistically significant positive impact of OL on OP from the employee perspective.Also, Škerlavaj et al (2007) established a statistically significant link between OL culture on OP, based on medium and large Slovenian companies.
The researches have long acknowledged the importance of OL to overall OP.An organization with a strong OL is not simply a collector or storehouse of knowledge but a processor of it (Liao & Wu, 2009).This research investigates the influence of OL on OP.It attempts to determine which OP is the most and the least predictable when the effectiveness of OL is in the view, and even further, to identify how a presence of OL and quality of its' practice influence OP.

The Relationship between KM and OP
KM literature adopts a technical approach directed towards disseminating and leveraging knowledge in order to enhance OP (Škerlavaj & Dimovski, 2006).
The roles of knowledge for OP have become clearer, that is, it must be organization result-driven (Gorelick & Monsou, 2005;Wiig, 2002).Organizations need to assess and understand how KM best contributes to OP. Performance must be integrated with systematic and systematized learning to sustain competitive advantage and KM can be a vehicle for achieving this desired result (Gorelick & Monsou, 2005).KM and OP are essential for the success in business.The different results in literatures that declare KM affects OP positively (Liao & Wu, 2009).KM process affects OP positively.Knowledge acquisition doesn't positively affect OP directly, and knowledge dissemination doesn't positively affect OP (Darroch, 2005).KM efforts were limited in their ability to yield significant OP.This limitation is further compounded by the fact that OP advantage is derived not from the knowledge resident in an organization but from how it is leveraged (Alavi & Leidner, 2001).KM practices are positively associated with OP as generally suggested by the KM literature, both qualitative (Massey et al., 2002) and quantitative (Schulz & Jobe, 2001;Choi & Lee, 2003;Darroch & McNaughton, 2003;Tanriverdi, 2005).KM practices are related to various intermediate measures of strategic OP, and those intermediate measures are associated with financial performance.Based on this evidence, it was concluded that as long as KM practices enhance intermediate OP, positive financial performance will result (Lee & Choi, 2003).
The practice of KM is that by locating and sharing useful knowledge, OP will improve (Davenport & Prusak, 1998).One might expect KM to influence many different aspects of OP.KM has been linked positively to financial performance measures (Tanriverdi, 2005) and non-financial performance measures such as quality (Mukherjee et al., 1998).KM makes a difference to OP.Not only did KM practices have a direct relationship with intermediate measures of OP, but OP also exhibited a significant and direct relationship to financial performance.Also, there was no significant relationship between KM practices and financial performance (Zack, et al., 2009).
Effective KM through the development of capabilities should contribute to key aspects of OP.Also, when firms develop greater KM capabilities, they can more effectively develop marketing offerings to meet customer needs.With greater KM capabilities, firms can obtain and use knowledge more effectively and efficiently, which results in above-normal performance (Liao & Wu, 2009).KM has been illustrated as a significant discipline in leading to positive performance in the organization.Without KM, the organization would not succeed in long-term survival and remain in competitive advantage.As an organization implements KM, its performance will be better, especially in a changing and unpredictable environment (Raja Suzana, 2004;2005;2008).
There has been a great deal of research explaining what makes KM the critical practices for OP (Gorelick & Monsou, 2005;Liao & Wu, 2009), but little research has been done on the association of KM to OP in the Arab environment.So, this study attempts to discover the relationship between KM and OP at the Egyptian commercial banks.

Research Model
There have been little empirical studies to demonstrate the relationship between KM and OP.Understanding this relationship is essential for managers if they hope to improve OP through KM (Asoh, 2003).There are studies focusing on the OP results of KM (Argote & Ingram, 2000).The underlying assumption one might assume is that all new knowledge is good knowledge that automatically brings improved OP (Kalling, 2003).Gold et al. (2001) and Mohrman, et al., (2003), suggested that OP is improved when the organization creates and uses knowledge.OP is improved through locating and sharing useful KM (Davenport & Prusak, 1998).One might expect KM to influence many different aspects of OP.KM has been linked positively to OP (Tanriverdi, 2005;Francisco & Guadamillas, 2002;Lapre & Wassenhove, 2001).Becerra-Fernandez, et al., (2004) discussed the impact of KM processes on people, processes, products and OP.KM could affect organizations in two main ways: (1) KM can help create knowledge, which can then contribute to improve OP; and (2) KM can directly cause improvements in people, processes, products and OP.KM affects OL positively (Su, et al., 2004).KM had more indirect than direct influence on OP (Darroch, 2005).
OL has a significant impact on OP from the employee perspective (Škerlavaj & Dimovski, 2006).KM and OL go hand in hand.It took several hundred years for the most advanced nation of the world that continue to challenge organizations to improve OP (Su et al., 2003;2004;Ke & Wei, 2006;Liao & Wu, 2009).Salina & Wan Fadzilah (2008) suggested that KM processes have a significant relationship with OP.
There is a lack of systematic study in the Egyptian context, especially public service sector.KM is still in its early stages and the contribution of KM is still a debatable issue.This research attempts to examine the relationship between KM, OL and OP.
From the above discussion, the researcher noticed that KM contributes significantly to OP, and the existence of OL helps improve OP.In another words, organizations which develop their learning processes congruently will increase their performance.However, if OL fully mediates the relationship between KM and OP, it shows that the relationship between KM and OP is insignificant with the presence of OL.The research model is as shown in Figure 1 below.This study attempts to test the following hypotheses: H1: There is no relationship between KM and OL at the Egyptian commercial banks.H2: There is no impact of OL on OP at the Egyptian commercial banks.
H3: There is no relationship between KM and OP at the Egyptian commercial banks.

Population and Sample
In this study population was all employees at the Egyptian commercial banks.The total population is 66.536 employees.The stratified random sample was used while selecting items from the different employees.Determination of respondent sample size was calculated using the formula (Daniel, 1999) as follows: So the number of samples obtained by 382 employees as presented in Table 1.

Method of Data Collection
A survey-based descriptive research design is used.The study was carried out at Egyptian commercial banks.
The questionnaire included four questions, relating to recognizing KM, OL, OP and biographical information of employees at Egyptian commercial banks.
Few employees completed 25 questionnaires but some changes took place.The questionnaires were completed anonymously during group administration.Data collection took approximately two months.About 382 survey questionnaires were distributed by employing diverse modes of communication such as in person and post.Multiple follow-ups yielded 310 statistically usable questionnaires.Survey responses were 81%.

Research Variables and Methods of Measuring
This research studied the relationship between KM, OL, and OP from the point of employees at the Egyptian Commercial Banks.In referencing exiting literature, the study established a basic research model.Figure 1 shows that KM is independent variable; OP is the dependent variable; OL is the mediator variable.The study of data collected through questionnaires with four: KM, OL, OP, and basic respondent demographic data.

Methods of Data Analysis and Testing Hypotheses
The researcher has employed the following methods: (1) Cronbach's alpha, (2) Multiple Regression Analysis (MRA), and (3) F-test and T-test.All these tests are found in SPSS.

Evaluating Reliability
Data analysis was conducted in there major phases.All scales were first subjected to reliability analysis.Cronbach's alpha was used to assess the internal consistency reliability of the scales.Item analysis indicated that dropping any items from the scales would not significantly raise the alphas.Table (3) presents the reliability of KM, OL, and OP at the Egyptian commercial banks.According Table 3, the overall reliability of KM is 0.92.The overall reliability of OL is 0.96.The overall reliability of OP is 0.92.All the measures of these scales were sufficiently reliable.

The Relationship between KM and OL
The relationship between KM and OL are studied.The first hypothesis to be tested is: H1: There is no statistically significant relationship between KM and OL at the Egyptian commercial banks.According to Table 4, there is a significant correlation between KM and OL.The following section will discuss the relationship between the aspects of KM and OL.
6.2.1 The Relationship between KM (Knowledge Creation) and OL According to the results of MRA, there is a relationship between knowledge creation and OL in significance level of 0,000.Moreover, the value of R 2 , knowledge creation can explain 34% of the total differentiation in OL level.
For the results of a structural analysis of the MRA, the direct effect of knowledge creation and OL is obtained.
Because MCC is 0.59, then it is concluded that there is enough empirical evidence to reject the null hypothesis.6.2.2The Relationship between KM (Knowledge Acquisition) and OL Regarding to the results of MRA, there is a relationship between knowledge acquisition and OL in significance level of 0,000.As a result of the value of R 2 , knowledge acquisition can explain 32% of the total differentiation in OL level.
The results of a structural analysis of the MRA model directly influence knowledge acquisition variable toward OL.Because MCC is 0.56, then there is enough empirical evidence to reject the null hypothesis.6.2.3The Relationship between KM (Knowledge Organization) and OL Concerning the results of MRA, there is a relationship between knowledge organization and OL in significance level of 0,000.As a result of the value of R 2 , knowledge organization can explain 25% of the total differentiation in OL level.
According to the results of MRA, the there is a fundamental relationship between knowledge organization and OL.Because MCC is 0.51, then it is concluded that there is evidence to reject the null hypothesis.6.2.4The Relationship between KM (Knowledge Distribution) and OL According to the results of MRA, there is a relationship between knowledge distribution and OL in significance level of 0,000.As a result of the value of R 2 , knowledge distribution can explain 26% of the total differentiation in OL level.
For the results of a structural analysis of the MRA model, the direct effect of knowledge distribution and OL is obtained.Because MCC is 0.51, then it is concluded that there is enough empirical evidence to reject the null hypothesis.

6.2.5
The Relationship between KM (Use of knowledge) and OL Regarding to the results of MRA, there is a relationship between the use of knowledge and OL in significance level of 0,000.As a result of the value of R 2 , the use of knowledge can explain 31% of the total differentiation in OL level.
The results of a structural analysis of the MRA model directly influence the use of knowledge variable toward OL.Because MCC is 0.56, then there is enough empirical evidence to reject the null hypothesis.

The Relationship between OL and OP
The relationship between KM and OL is determined.The second hypothesis to be tested is: H2: There is no statistically significant relationship between OL and OP at the Egyptian commercial banks.According to Table 10, there is significant correlation between the aspects of OL and OP.The following section will discuss the relationship between the aspects of OL and OP.Concerning the results of MRA, there is a relationship between AOL and OP in significance level of 0,000.As a result of the value of R 2 , AOL can explain 87% of the total differentiation in OP level.

The Relationship between OL (AOL) and OP
For the results of a structural analysis of the MRA model, the direct effect of AOL and OL is obtained.Because MCC is 0.93, then it is concluded that there is enough empirical evidence to reject the null hypothesis.6.3.2The Relationship between OL (GOL) and OP According to the results of MRA, there is a relationship between GOL and OP in significance level of 0,000.As a result of the value of R 2 , GOL can explain 94% of the total differentiation in OP level.
The results of a structural analysis of the MRA model directly influence the GOL toward OL.Because MCC is 0.97, then there is enough empirical evidence to reject the null hypothesis at the statistical significance level of 0.01.

The Relationship between KM and OP
The statistical results for the relationship between KM and OL are investigated.The third hypothesis to be tested is: H3: There is no statistically significant relationship between KM and OP at the Egyptian commercial banks.13), there is a significant correlation between KM and OP.The following section will discuss the relationship between the aspects of KM and OP.
6.4.1 The Relationship between KM (Knowledge Creation) and OP According to the results of MRA, there is a relationship between knowledge creation and OP in significance level of 0,000.As a result of the value of R 2 , knowledge creation can explain 31% of the total differentiation in OP level.
For the results of a structural analysis of the MRA model, the direct effect of knowledge creation and OP is obtained.Because MCC is 0.55, then it is concluded that there is enough empirical evidence to reject the null hypothesis.
6.4.2The Relationship between KM (Knowledge Acquisition) and OP Regarding to the results of MRA, there is a relationship between knowledge acquisition and OP in significance level of 0,000.The value of R 2 , knowledge acquisition can explain 26% of the total differentiation in OP level.
The results of a structural analysis of the MRA model directly influence knowledge acquisition variable toward OP.Because MCC is 0.51, then there is enough empirical evidence to reject the null hypothesis.
6.4.3The Relationship between KM (Knowledge Organization) and OP Concerning the results of MRA, there is a relationship between knowledge organization and OP in significance level of 0,000.The value of R 2 , knowledge organization can explain 26% of the total differentiation in OP level.
For the results of a structural analysis of the MRA model, the direct effect of knowledge organization and OP is obtained.Because MCC is 0.42, then it is concluded that there is enough empirical evidence to reject the null hypothesis.6.4.4The Relationship between KM (Knowledge Distribution) and OP According to the results of MRA, there is a relationship between knowledge distribution and OP in significance level of 0,000.As a result of the value of R 2 , knowledge distribution can explain 18% of the total differentiation in OP level.
The results of a structural analysis of the MRA model directly influence knowledge distribution variable toward OP.Because MCC is 0.42, then there is enough empirical evidence to reject the null hypothesis.
6.4.5The Relationship between KM (Use of knowledge) and OP Regarding to the results of MRA, there is a relationship between the use of knowledge and OP in significance level of 0,000.As a result of the value of R 2 , the use of knowledge can explain 24% of the total differentiation in OP level.
For the results of a structural analysis of the MRA model, the direct effect of the use of knowledge and OP is obtained.Because MCC is 0.49, then it is concluded that there is enough empirical evidence to reject the null hypothesis.

Recommendations
Understanding the relationships among KM, OL, and OP is essential for managers if they hope to improve OP through KM.Therefore, the manager needs to take the following factors into account: 1) The managers at the Egyptian banks need to acquire more knowledge to generate greater OP because it is confirmed that knowledge creation, acquisition, organization, distribution and use of knowledge are the main contributors to better performance.
2) The managers at the Egyptian banks also need to acknowledge the importance of OL, which is observed to act as mediator between KM processes and OP in this study.In other words, although KM processes contribute significantly to OP, the existence of OL helps improve OP.However, if OL fully mediates the relationship between KM processes and OP, it shows that the relationship between KM processes and OP is insignificant with the presence of OL.
3) The researcher hopes and believes that the model developed and tested presents relatively well balanced relationship between complexity of OL process and OP in modern business environment, and simplicity of its formulation in the model.
4) The importance of systematic efforts to achieve strategic, generative or double-loop OL for strategic management of modern companies in their perpetual quest for competitive advantage is demonstrated.
5) The researcher hopes to clarify the important relationship among the variables leading to more comprehensive investigations.
6) The implication of the evolution of KM just described is clear.KM and OL should join forces and develop a unified discipline.KM needs OL and its expanding body of good research work.OL needs the practitioner base of KM and its abiding interest in problems and practice.Indeed, members of the KM and OL disciplines ought to be more actively involved in monitoring and evaluating each other's promising new theories and practices 7) Public service managers have many roles and responsibilities at the Egyptian banks, such as managing learning.Top management needs to have specific competencies knowledge, and ability to create and enhance the learning atmosphere in the organization.Also, top management need to understand and identify what factors contribute to the effectiveness of OP and what factors hinder such processes among the public service managers.
In addition, top management need to promote the creation of intelligent organizations where people develop personally and professionally.

Figure 1 .
Figure 1.The Framework of the relationship among the variables

Table 1 .
Distribution of the sample size

Table 2 .
Characteristics of the sample units

Table 3 .
Reliability of KM, OL, OP

Table 4 .
Correlation coefficients between KM and OL

Table 5 .
The relationship between knowledge creation and OL

Table 8 .
The relationship between knowledge distribution and OL

Table 9 .
The Relationship between the use of knowledge and OL ** P < .01.

Table 10 .
Correlation coefficients between OL and OP

Table 11 .
The relationship between AOL and OP

Table 12 .
The relationship between GOL and OP

Table 13 .
Correlation coefficients between KM and OP

Table 14 .
The relationship between Knowledge Creation and OP

Table 15 .
The relationship between knowledge acquisition and OP

Table 16 .
The relationship between knowledge organization and OP

Table 17 .
The relationship between knowledge distribution and OP

Table 18 .
The relationship between the use of knowledge and OP