Leveraging Knowledge Management to Achieve Principled Performance: The Mediating Roles of Risk and Compliance

This study examines the role of Knowledge (KM) as catalyst in realizing Principled Performance (PP) through the mediating effects of Risk Management (RM) and Compliance (CM). It elaborates on the specific nature of KM platform and aims to uncover the unique characteristics of PP in comparison to the conventional term of ‘performance. The study employs a quantitative approach, utilizing purposive sampling from 36 companies with a total of 252 managers from Indonesian airports, each representing seven observation units focusing on activities within Indonesian airport companies. Data were analysed using the Partial Least Squares Structural Equation Modelling (PLS-SEM) program. Initial findings indicated that KM had a significant direct effect on PP and an indirect effect through RM and CM. KM provided essential actions in addressing uncertainties through RM and increasing compliance awareness and commitment via CM. Furthermore, the direct relationship between CM and PP is significant due to the influence of compliance obligation, while RM and PP did not show a significant relationship. However, CM and RM had a notable simultaneous effect as mediating variables when KM influenced PP. These results positioned KM as a foundational element of PP, emphasizing its importance in promoting sustainable performance outcomes. This study significantly enhances theoretical understanding and enriches practical discourse by integrating insights from various disciplines through empirical methodologies. It clarifies the critical interplay among KM, RM, and CM, demonstrating how they promote a balanced approach that improves performance. The PP strengthens organizational resilience and ensures long-term sustainability. Moreover, the results introduce an alternative conceptual model that practitioners can explore and refine. The study highlights the pivotal role of knowledge in navigating risk and compliance to achieve PP, which can lead to positive outcomes and greater confidence in an organization's capabilities and success. This study positions KM as a fundamental aspect of PP, highlighting its significance in reinforcing sustainable performance outcomes. To the best of the authors’ knowledge about PP, no prior research has specifically used knowledge to enhance PP.