Perceived Importance of Innovation, Knowledge Management Maturity, Returns Management Knowledge and Internal Integration

The aim of this paper is to determine relationships between the perceived importance of innovation (PII) by managers, knowledge management maturity (KMM), returns management knowledge (RMK) and internal cross-functional integration and coordination (CFIC) among Czech firms. Returns management (RM) used to be the most neglected process in business (Norek, 2002) due to the dominance of forward-based thinking in value creation processes (de Brito, 2004). Innovative practices are highly recommended for managing returns and reverse logistics (RI) especially owing to many specific features of RM and limited space for making foresights (Richey et al, 2005; Bernon, Rossi and Cullen, 2011). High variability and complexity of tasks and, more difficult coordination of processes inside and across the firms related to manage returns requires increased information management needs, proper knowledge sharing and adequate KM (Meade and Sarkis, 2007). Schoenherr and Swink (2012) proved that CFIC is positively associated with the ability to transform and exploit knowledge obtained from the external partners (what is extremely important in the case of RM). In our model we test relationships between the PII, existed RMK, KMM and the level of the internal CFI. Based on a survey of 232 managers from the same number of firms from various industries and sectors in the Czech Republic, this study applies the structural equation modelling (SEM) to investigate proposed research model. Results show that the perceived importance of innovation has a positive link with KMM, RMK positively influences KMM, KMM has a positive link to the CFIC and the CFIC has a positive link to the PII.