Abstract
Purpose: The purpose of this was to analyze the influence of knowledge creation on organizational performance of state owned commercial enterprises in Kenya. Methodology: This study was based on explanatory and descriptive research designs since they were more appropriate to test the hypotheses. The target population comprised of 275 members of top management team of 55 state-owned commercial enterprises in Kenya, as at 31st October 2016. The study utilized simple random sampling to select a sample of 268 members of top management team in the 55 state-owned commercial enterprises.Results: Response rate of 71% was obtained and analytical tests conducted were Pearson correlation coefficients, One Way ANOVA, and Multiple linear regression. The correlation coefficients for return on equity was (r = -0.035, p=0.635) and return on asset was (r = 0.063, p = 0.388). One-Way ANOVA results was F (14, 173) = 2.483, p=0.003. The regression for coefficient based on return on equity for knowledge creation was: unmoderated models; β = -1.044, t (-1.657), p=0.1 and for moderated model; β = -7.317, t (-4.505), p=0.000 respectively. The regression coefficient based on return on asset model for knowledge creation was: unmoderated models; β=0.134 t (0.608) p = 0.544 and for moderated models; β = -0.335, t (-0.533), p = 0.595. The study concludes that there is no significant influence of knowledge creation on performance based on return on assets but there is significant influence of knowledge creation on organizational performance based on return on equity of state owned commercial enterprises in Kenya.Contribution to Practice, Theory and Policy: Based on the findings that knowledge creation influences the organizational performance of state owned commercial enterprises in Kenya, the study recommends that organizations should encourage the collaboration, practice, education, and interaction as ways of creating knowledge.