Systematic Review of Determinants of Organizational Performance of Craft SMEs in the Era of Industry 4.0: The Mediation Role of Digital Knowledge Management
Keywords:
Digital Knowledge Management, Organizational Performance, Craft SMEs, Innovation, Knowledge Management.
Abstract
This study examines the determinants of Organizational Performance in Small and Medium Industries (SMEs) of crafts by highlighting the role of Digital Knowledge Management (DKM) as the main mediator in the digital era. Using the Systematic Literature Review (SLR) approach referring to Kitchenham (2004) and PRISMA guidelines, 35 relevant articles were analyzed to identify key factors such as innovation, human resources, digitalization, and operational management that contribute to organizational performance. The findings show that DKM functions as a bridge connecting internal and external factors, strengthening organizational processes and driving long-term sustainability. This study also emphasizes the importance of digital knowledge management in supporting organizational adaptation to rapid changes in the business environment and increasingly fierce global competition. The practical implications of this study provide direction for SMEs to integrate DKM strategies into daily operations to improve effectiveness and competitiveness. These findings enrich the literature on knowledge management and Organizational Performance, especially in the context of developing countries. This study contributes to an in-depth understanding of the relationship between digital technology and business sustainability, opening up opportunities for the development of more adaptive and innovative policies and managerial practices.
References
1. Adamik, A., & Sikora-Fernandez, D. (2021). Smart organizations as a source of competitiveness and sustainable development in the age of industry 4.0: Integration of micro and macro perspective. Energies, 14(6), 1572.
2. Al Koliby, I. S., Mehat, N. A. B., Al-Swidi, A. K., & Al-Hakimi, M. A. (2024). Is knowledge management a missing link? Linking entrepreneurial competencies and sustainable performance of manufacturing SMEs. The Bottom Line, 37(1), 71–97.
3. AlMulhim, A. F. (2023). Knowledge management capability and organizational performance: a moderated mediation model of environmental dynamism and opportunity recognition. Business Process Management Journal, 29(6), 1655–1679.
4. Baral, M. M., Rao, U. V. A., Rao, K. S., Dey, G. C., Mukherjee, S., & Kumar, M. A. (2023). Achieving sustainability of SMEs through industry 4.0-based circular economy. International Journal of Global Business and Competitiveness, 18(2), 128–144.
5. Bawono, H. T., Winarno, W., & Karyono, K. (2022). Effect of Technology, Organization, and External Environment on Business Performance Mediated by the Adoption of Technology 4.0 in SMEs. Jurnal Manajerial, 9(02), 228–248.
6. Bertassini, A. C., Ometto, A. R., Severengiz, S., & Gerolamo, M. C. (2021). Circular economy and sustainability: The role of organizational behaviour in the transition journey. Business Strategy and the Environment, 30(7), 3160–3193.
7. Bettiol, M., Capestro, M., Di Maria, E., & Grandinetti, R. (2023). Leveraging on intra-and inter-organizational collaboration in Industry 4.0 adoption for knowledge creation and innovation. European Journal of Innovation Management, 26(7), 328–352.
8. Cardoni, A., Zanin, F., Corazza, G., & Paradisi, A. (2020). Knowledge management and performance measurement systems for SMEs’ economic sustainability. Sustainability, 12(7), 2594.
9. Cerchione, R., Centobelli, P., Oropallo, E., Magni, D., & Borin, E. (2023). Knowing what you don’t know: a tertiary study on knowledge management. Journal of Knowledge Management, 27(9), 2548–2578.
10. Dambiski Gomes de Carvalho, G., Resende, L. M. M. de, Pontes, J., Gomes de Carvalho, H., & Mendes Betim, L. (2021). Innovation and management in MSMEs: A literature review of highly cited papers. Sage Open, 11(4), 21582440211052556.
11. Durst, S., Edvardsson, I. R., & Foli, S. (2023). Knowledge management in SMEs: a follow-up literature review. Journal of Knowledge Management, 27(11), 25–58.
12. Harini, S., Gemina, D., & Yuningsih, E. (2020a). Leveraging SMEs performance of sustainability: Creativity and innovation based on HR competency and market potential in the era of IR 4.0. International Journal of Entrepreneurship, 24(1), 1–12.
13. Harini, S., Gemina, D., & Yuningsih, E. (2020b). Leveraging SMEs performance of sustainability: Creativity and innovation based on HR competency and market potential in the era of IR 4.0. International Journal of Entrepreneurship, 24(1), 1–12.
14. Hasani, T., O’Reilly, N., Dehghantanha, A., Rezania, D., & Levallet, N. (2023). Evaluating the adoption of cybersecurity and its influence on organizational performance. SN Business & Economics, 3(5), 97.
15. Huang, L., Liang, Q., Xu, L., & Khan, A. (2023). Mediating effect of sustainable development practices on the relationship between information management practices and green innovation in China. Economic Research-Ekonomska Istraživanja, 36(2).
16. Idrees, H., Xu, J., Haider, S. A., & Tehseen, S. (2023). A systematic review of knowledge management and new product development projects: Trends, issues, and challenges. Journal of Innovation & Knowledge, 8(2), 100350.
17. Iheukwumere-Esotu, L. O., & Yunusa-Kaltungo, A. (2021). Knowledge management and experience transfer in major maintenance activities: a practitioner’s perspective. Sustainability, 14(1), 52.
18. Jahanshahi, A. A., Adiguzel, Z., & Cakir, F. S. (2023). Knowledge management strategy as the key factor for Turkish firms’ innovation in the digital era. IEEE Engineering Management Review, 51(2), 166–181.
19. Kassa, E. T., & Ning, J. (2023). A systematic review on the roles of knowledge management in public sectors: Synthesis and way forwards. Heliyon, 9(11).
20. Kim, S., & Ha, T. (2023). Influential variables and causal relations impact on innovative performance and sustainable growth of SMEs in aspect of industry 4.0 and digital transformation. Sustainability, 15(9), 7310.
21. Kim, S.-S. (2021). Sustainable growth variables by industry sectors and their influence on changes in business models of SMEs in the era of digital transformation. Sustainability, 13(13), 7114.
22. Kim, S.-S. (2022). Influential indicators and measurements of mediating and moderating roles on SME performance. International Journal of Knowledge Management (IJKM), 18(1), 1–18.
23. Latifah, L., Setiawan, D., Aryani, Y. A., Sadalia, I., & Al Arif, M. N. R. (2022). Human capital and open innovation: do social media networking and knowledge sharing matter? Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 116.
24. Limsangpetch, V., Phayaphrom, B., Siripipatthanakul, S., & Limna, P. (2022). Modelling knowledge management on business performance through mediating role of organisational innovation among IT staff in Bangkok, Thailand. International Journal of Behavioral Analytics, 2(2), 1–17.
25. Llinás Sala, D., & Abad Puente, J. (2019). The role of high-performance people management practices in Industry 4.0: The case of medium-sized Spanish firms. Intangible Capital, 15(3), 190–207.
26. Mariani, M., & Borghi, M. (2019). Industry 4.0: A bibliometric review of its managerial intellectual structure and potential evolution in the service industries. Technological Forecasting and Social Change, 149, 119752.
27. Marlina, L., Senen, S. H., Yuniarsih, T., & Ahman, E. (2023). Human capital competitiveness model in the digital era of craft creative industry entrepreneurs. Journal of Competitiveness, 15(2).
28. Massa, S., Annosi, M. C., Marchegiani, L., & Petruzzelli, A. M. (2023). Digital technologies and knowledge processes: new emerging strategies in international business. A systematic literature review. Journal of Knowledge Management, 27(11), 330–387.
29. Nasution, M. D. T. P., Rafiki, A., Lubis, A., & Rossanty, Y. (2021). Entrepreneurial orientation, knowledge management, dynamic capabilities towards e-commerce adoption of SMEs in Indonesia. Journal of Science and Technology Policy Management, 12(2), 256–282.
30. Nyagadza, B. (2022). Sustainable digital transformation for ambidextrous digital firms: Systematic literature review, meta-analysis and agenda for future research directions. Sustainable Technology and Entrepreneurship, 1(3), 100020.
31. Oliinyk, O., Bilan, Y., & Mishchuk, H. (2021). Knowledge management and economic growth: The assessment of links and determinants of regulation. Central European Management Journal.
32. Paoloni, M., Coluccia, D., Fontana, S., & Solimene, S. (2020). Knowledge management, intellectual capital and entrepreneurship: a structured literature review. Journal of Knowledge Management, 24(8), 1797–1818.
33. Permatasari, A., Dhewanto, W., & Dellyana, D. (2023). The role of traditional knowledge-based dynamic capabilities to improve the sustainable performance of weaving craft in Indonesia. Journal of Enterprising Communities: People and Places in the Global Economy, 17(3), 664–683.
34. Philbin, S., Viswanathan, R., & Telukdarie, A. (2022). Understanding how digital transformation can enable SMEs to achieve sustainable development: A systematic literature review. Small Business International Review, 6(1), e473.
35. Rajbhandari, S., Khanal, G., Parajuli, S., & Karki, D. (2020). A review on potentiality of industry 4.0 in Nepal: does the pandemic play catalyst role? Quest Journal of Management and Social Sciences, 2(2), 366–379.
36. Ramadan, M., Bou Zakhem, N., Baydoun, H., Daouk, A., Youssef, S., El Fawal, A., Elia, J., & Ashaal, A. (2023). Toward digital transformation and business model innovation: The nexus between leadership, organizational agility, and knowledge transfer. Administrative Sciences, 13(8), 185.
37. Santhose, S. S., & Lawrence, L. N. (2023). Understanding the implementations and limitations in knowledge management and knowledge sharing using a systematic literature review. Current Psychology, 42(36), 32427–32442.
38. Setini, M., Yasa, N. N. K., Gede Supartha, I. W., Ketut Giantari, I. G. A., & Rajiani, I. (2020). The passway of women entrepreneurship: Starting from social capital with open innovation, through to knowledge sharing and innovative performance. Journal of Open Innovation: Technology, Market, and Complexity, 6(2), 25.
39. Sima, V., Gheorghe, I. G., Subić, J., & Nancu, D. (2020). Influences of the industry 4.0 revolution on the human capital development and consumer behavior: A systematic review. Sustainability, 12(10), 4035.
40. Singh, R., & Shethia, K. (2023). Effect of knowledge management practices on organizational and financial performance: a study on MSMEs (micro, small and medium enterprises) in India. Russian Law Journal, 11(5), 2797–2810.
41. Valmohammadi, C., Sofiyabadi, J., & Kolahi, B. (2019). How do knowledge management practices affect sustainable balanced performance? Mediating role of innovation practices. Sustainability, 11(18), 5129.
42. Wahjudewanti, A. S., Tjakraatmaja, J. H., & Anggoro, Y. (2022). Factors Influencing Knowledge Management Implementation in Creative Industries. Journal of Positive School Psychology, 10698–10712.
43. Wang, K., & Guo, F. (2022). Towards sustainable development through the perspective of construction 4.0: Systematic literature review and bibliometric analysis. Buildings, 12(10), 1708.
44. Yadav, U. S., Vyas, S., Kanchan, Ghosal, I., & Yadav, A. K. (2024). Impact of entrepreneurial leadership, social-media, digital technology, Entrepreneurial orientation and innovation on business performance in the handicraft sector: Talent management as mediating construct. Journal of Innovation and Entrepreneurship, 13(1), 72.
45. Yasir, M., Majid, A., & Khan, S. H. (2023). Role of inter-organizational knowledge acquisition in bringing green innovation in manufacturing SMEs: An investigation of green organizational culture and absorptive capacity. Pakistan Journal of Commerce and Social Sciences (PJCSS), 17(1), 92–114.
46. Zhen, Z., Yousaf, Z., Radulescu, M., & Yasir, M. (2021). Nexus of digital organizational culture, capabilities, organizational readiness, and innovation: Investigation of SMEs operating in the digital economy. Sustainability, 13(2), 720.
2. Al Koliby, I. S., Mehat, N. A. B., Al-Swidi, A. K., & Al-Hakimi, M. A. (2024). Is knowledge management a missing link? Linking entrepreneurial competencies and sustainable performance of manufacturing SMEs. The Bottom Line, 37(1), 71–97.
3. AlMulhim, A. F. (2023). Knowledge management capability and organizational performance: a moderated mediation model of environmental dynamism and opportunity recognition. Business Process Management Journal, 29(6), 1655–1679.
4. Baral, M. M., Rao, U. V. A., Rao, K. S., Dey, G. C., Mukherjee, S., & Kumar, M. A. (2023). Achieving sustainability of SMEs through industry 4.0-based circular economy. International Journal of Global Business and Competitiveness, 18(2), 128–144.
5. Bawono, H. T., Winarno, W., & Karyono, K. (2022). Effect of Technology, Organization, and External Environment on Business Performance Mediated by the Adoption of Technology 4.0 in SMEs. Jurnal Manajerial, 9(02), 228–248.
6. Bertassini, A. C., Ometto, A. R., Severengiz, S., & Gerolamo, M. C. (2021). Circular economy and sustainability: The role of organizational behaviour in the transition journey. Business Strategy and the Environment, 30(7), 3160–3193.
7. Bettiol, M., Capestro, M., Di Maria, E., & Grandinetti, R. (2023). Leveraging on intra-and inter-organizational collaboration in Industry 4.0 adoption for knowledge creation and innovation. European Journal of Innovation Management, 26(7), 328–352.
8. Cardoni, A., Zanin, F., Corazza, G., & Paradisi, A. (2020). Knowledge management and performance measurement systems for SMEs’ economic sustainability. Sustainability, 12(7), 2594.
9. Cerchione, R., Centobelli, P., Oropallo, E., Magni, D., & Borin, E. (2023). Knowing what you don’t know: a tertiary study on knowledge management. Journal of Knowledge Management, 27(9), 2548–2578.
10. Dambiski Gomes de Carvalho, G., Resende, L. M. M. de, Pontes, J., Gomes de Carvalho, H., & Mendes Betim, L. (2021). Innovation and management in MSMEs: A literature review of highly cited papers. Sage Open, 11(4), 21582440211052556.
11. Durst, S., Edvardsson, I. R., & Foli, S. (2023). Knowledge management in SMEs: a follow-up literature review. Journal of Knowledge Management, 27(11), 25–58.
12. Harini, S., Gemina, D., & Yuningsih, E. (2020a). Leveraging SMEs performance of sustainability: Creativity and innovation based on HR competency and market potential in the era of IR 4.0. International Journal of Entrepreneurship, 24(1), 1–12.
13. Harini, S., Gemina, D., & Yuningsih, E. (2020b). Leveraging SMEs performance of sustainability: Creativity and innovation based on HR competency and market potential in the era of IR 4.0. International Journal of Entrepreneurship, 24(1), 1–12.
14. Hasani, T., O’Reilly, N., Dehghantanha, A., Rezania, D., & Levallet, N. (2023). Evaluating the adoption of cybersecurity and its influence on organizational performance. SN Business & Economics, 3(5), 97.
15. Huang, L., Liang, Q., Xu, L., & Khan, A. (2023). Mediating effect of sustainable development practices on the relationship between information management practices and green innovation in China. Economic Research-Ekonomska Istraživanja, 36(2).
16. Idrees, H., Xu, J., Haider, S. A., & Tehseen, S. (2023). A systematic review of knowledge management and new product development projects: Trends, issues, and challenges. Journal of Innovation & Knowledge, 8(2), 100350.
17. Iheukwumere-Esotu, L. O., & Yunusa-Kaltungo, A. (2021). Knowledge management and experience transfer in major maintenance activities: a practitioner’s perspective. Sustainability, 14(1), 52.
18. Jahanshahi, A. A., Adiguzel, Z., & Cakir, F. S. (2023). Knowledge management strategy as the key factor for Turkish firms’ innovation in the digital era. IEEE Engineering Management Review, 51(2), 166–181.
19. Kassa, E. T., & Ning, J. (2023). A systematic review on the roles of knowledge management in public sectors: Synthesis and way forwards. Heliyon, 9(11).
20. Kim, S., & Ha, T. (2023). Influential variables and causal relations impact on innovative performance and sustainable growth of SMEs in aspect of industry 4.0 and digital transformation. Sustainability, 15(9), 7310.
21. Kim, S.-S. (2021). Sustainable growth variables by industry sectors and their influence on changes in business models of SMEs in the era of digital transformation. Sustainability, 13(13), 7114.
22. Kim, S.-S. (2022). Influential indicators and measurements of mediating and moderating roles on SME performance. International Journal of Knowledge Management (IJKM), 18(1), 1–18.
23. Latifah, L., Setiawan, D., Aryani, Y. A., Sadalia, I., & Al Arif, M. N. R. (2022). Human capital and open innovation: do social media networking and knowledge sharing matter? Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 116.
24. Limsangpetch, V., Phayaphrom, B., Siripipatthanakul, S., & Limna, P. (2022). Modelling knowledge management on business performance through mediating role of organisational innovation among IT staff in Bangkok, Thailand. International Journal of Behavioral Analytics, 2(2), 1–17.
25. Llinás Sala, D., & Abad Puente, J. (2019). The role of high-performance people management practices in Industry 4.0: The case of medium-sized Spanish firms. Intangible Capital, 15(3), 190–207.
26. Mariani, M., & Borghi, M. (2019). Industry 4.0: A bibliometric review of its managerial intellectual structure and potential evolution in the service industries. Technological Forecasting and Social Change, 149, 119752.
27. Marlina, L., Senen, S. H., Yuniarsih, T., & Ahman, E. (2023). Human capital competitiveness model in the digital era of craft creative industry entrepreneurs. Journal of Competitiveness, 15(2).
28. Massa, S., Annosi, M. C., Marchegiani, L., & Petruzzelli, A. M. (2023). Digital technologies and knowledge processes: new emerging strategies in international business. A systematic literature review. Journal of Knowledge Management, 27(11), 330–387.
29. Nasution, M. D. T. P., Rafiki, A., Lubis, A., & Rossanty, Y. (2021). Entrepreneurial orientation, knowledge management, dynamic capabilities towards e-commerce adoption of SMEs in Indonesia. Journal of Science and Technology Policy Management, 12(2), 256–282.
30. Nyagadza, B. (2022). Sustainable digital transformation for ambidextrous digital firms: Systematic literature review, meta-analysis and agenda for future research directions. Sustainable Technology and Entrepreneurship, 1(3), 100020.
31. Oliinyk, O., Bilan, Y., & Mishchuk, H. (2021). Knowledge management and economic growth: The assessment of links and determinants of regulation. Central European Management Journal.
32. Paoloni, M., Coluccia, D., Fontana, S., & Solimene, S. (2020). Knowledge management, intellectual capital and entrepreneurship: a structured literature review. Journal of Knowledge Management, 24(8), 1797–1818.
33. Permatasari, A., Dhewanto, W., & Dellyana, D. (2023). The role of traditional knowledge-based dynamic capabilities to improve the sustainable performance of weaving craft in Indonesia. Journal of Enterprising Communities: People and Places in the Global Economy, 17(3), 664–683.
34. Philbin, S., Viswanathan, R., & Telukdarie, A. (2022). Understanding how digital transformation can enable SMEs to achieve sustainable development: A systematic literature review. Small Business International Review, 6(1), e473.
35. Rajbhandari, S., Khanal, G., Parajuli, S., & Karki, D. (2020). A review on potentiality of industry 4.0 in Nepal: does the pandemic play catalyst role? Quest Journal of Management and Social Sciences, 2(2), 366–379.
36. Ramadan, M., Bou Zakhem, N., Baydoun, H., Daouk, A., Youssef, S., El Fawal, A., Elia, J., & Ashaal, A. (2023). Toward digital transformation and business model innovation: The nexus between leadership, organizational agility, and knowledge transfer. Administrative Sciences, 13(8), 185.
37. Santhose, S. S., & Lawrence, L. N. (2023). Understanding the implementations and limitations in knowledge management and knowledge sharing using a systematic literature review. Current Psychology, 42(36), 32427–32442.
38. Setini, M., Yasa, N. N. K., Gede Supartha, I. W., Ketut Giantari, I. G. A., & Rajiani, I. (2020). The passway of women entrepreneurship: Starting from social capital with open innovation, through to knowledge sharing and innovative performance. Journal of Open Innovation: Technology, Market, and Complexity, 6(2), 25.
39. Sima, V., Gheorghe, I. G., Subić, J., & Nancu, D. (2020). Influences of the industry 4.0 revolution on the human capital development and consumer behavior: A systematic review. Sustainability, 12(10), 4035.
40. Singh, R., & Shethia, K. (2023). Effect of knowledge management practices on organizational and financial performance: a study on MSMEs (micro, small and medium enterprises) in India. Russian Law Journal, 11(5), 2797–2810.
41. Valmohammadi, C., Sofiyabadi, J., & Kolahi, B. (2019). How do knowledge management practices affect sustainable balanced performance? Mediating role of innovation practices. Sustainability, 11(18), 5129.
42. Wahjudewanti, A. S., Tjakraatmaja, J. H., & Anggoro, Y. (2022). Factors Influencing Knowledge Management Implementation in Creative Industries. Journal of Positive School Psychology, 10698–10712.
43. Wang, K., & Guo, F. (2022). Towards sustainable development through the perspective of construction 4.0: Systematic literature review and bibliometric analysis. Buildings, 12(10), 1708.
44. Yadav, U. S., Vyas, S., Kanchan, Ghosal, I., & Yadav, A. K. (2024). Impact of entrepreneurial leadership, social-media, digital technology, Entrepreneurial orientation and innovation on business performance in the handicraft sector: Talent management as mediating construct. Journal of Innovation and Entrepreneurship, 13(1), 72.
45. Yasir, M., Majid, A., & Khan, S. H. (2023). Role of inter-organizational knowledge acquisition in bringing green innovation in manufacturing SMEs: An investigation of green organizational culture and absorptive capacity. Pakistan Journal of Commerce and Social Sciences (PJCSS), 17(1), 92–114.
46. Zhen, Z., Yousaf, Z., Radulescu, M., & Yasir, M. (2021). Nexus of digital organizational culture, capabilities, organizational readiness, and innovation: Investigation of SMEs operating in the digital economy. Sustainability, 13(2), 720.
Published
2025-05-26
How to Cite
Rianto, T., Nugroho, A., & Zulkifli. (2025). Systematic Review of Determinants of Organizational Performance of Craft SMEs in the Era of Industry 4.0: The Mediation Role of Digital Knowledge Management. International Journal of Science and Society, 7(2), 260-279. https://doi.org/10.54783/ijsoc.v7i2.1435
Section
Articles
Copyright (c) 2025 International Journal of Science and Society
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
The copyright in this website and the material on this website (including without limitation the text, computer code, artwork, photographs, images, music, audio material, video material and audio-visual material on this website) is owned by IJSOC and its licensors.
IJSOC grants to you a worldwide non-exclusive royalty-free revocable license to:
- view this website and the material on this website on a computer or mobile device via a web browser;
- copy and store this website and the material on this website in your web browser cache memory; and
- print pages from this website for your use.
- All articles published by Academic Journals are licensed under the Creative Commons Attribution 4.0 International License. This permits anyone to copy, redistribute, remix, transmit and adapt the work provided the original work and source is appropriately cited.
IJSOC does not grant you any other rights in relation to this website or the material on this website. In other words, all other rights are reserved.
For the avoidance of doubt, you must not adapt, edit, change, transform, publish, republish, distribute, redistribute, broadcast, rebroadcast or show or play in public this website or the material on this website (in any form or media) without appropriately and conspicuously citing the original work and source or ACADEMIC JOURNALS prior written permission.
You may request permission to use the copyright materials on this website by writing to compliance@ijsoc.goacademica.com.
IJSOC takes the protection of its copyright very seriously.
If IJSOC discovers that you have used its copyright materials in contravention of the license above, IJSOC may bring legal proceedings against you seeking monetary damages and an injunction to stop you using those materials. You could also be ordered to pay legal costs.
If you become aware of any use of IJSOC' copyright materials that contravenes or may contravene the license above, please report this by email to Compliance@ijsoc.goacademica.com.
If you become aware of any material on the website that you believe infringes your or any other person's copyright, please report this by email to Compliance@ijsoc.goacademica.com.
.png)
.jpg)
.png)
.png)
.png)
.png)
1.png)
.jpg)
-modified.png)
-modified.png)
-modified.png)
