Investigating the Effect of Implementing the Lean Six
Sigma on Organizational Performance Based on the Mediating Role of Strategic
Knowledge Management with Structural Equation Modeling Approach

Investigando o efeito da implementação do Lean Six Sigma
no desempenho organizacional com base no papel mediador da gestão estratégica
do conhecimento com a abordagem de modelagem de equações estruturais

Vahid Aramoon

Department of
Industrial Management, Islamic Azad University, Tehran,
[email-masked]

Erfan Aramoon

Department of
Industrial Engineering, Islamic Azad University, Tehran, Iran. [email-masked]

Ardeshir
Bazrkar

Department of
Industrial Management, North Tehran Branch, Islamic Azad University, Tehran,
Iran. [email-masked]

RESUMO

O principal objetivo deste estudo foi
investigar o efeito da implementação do Lean Six Sigma no desempenho
organizacional com a gestão estratégica do conhecimento como variável mediadora
em hospitais privados em Teerã-Irã. O método de pesquisa foi baseado no
objetivo da pesquisa aplicada e, em termos de coleta e análise de dados, o
método de correlação foi de pesquisa. A população estatística deste estudo foi
de 51 hospitais particulares em Teerã. Foram utilizados questionários para
coleta de dados. Utilizou-se a modelagem de equações estruturais para analisar
os dados. Os resultados mostraram que a implementação do Lean Six Sigma
não tem um efeito positivo e significativo no desempenho organizacional; no
entanto, é eficaz na gestão estratégica do conhecimento. Por outro lado, a
gestão estratégica do conhecimento tem um efeito positivo e significativo no
desempenho organizacional. Além disso, a implementação do Lean Six Sigma
tem um efeito positivo no desempenho organizacional por meio da variável
mediadora da gestão estratégica do conhecimento. Os resultados da pesquisa
podem ser usados ​​para melhorar o desempenho organizacional de centros médicos e hospitais privados através da implementação do Lean Six Sigma.

Palavras-chave: Lean Six Sigma.
Gerenciamento Estratégico de Conhecimento. Desempenho Organizacional. Modelagem de Equações Estruturais.

ABSTRACT

The main purpose of this study was to investigate the effect of
implementing the lean six sigma on organizational performance with the
strategic knowledge management as mediating variable in private hospitals in
Tehran- Iran. The research method was based on purpose of applied research and
in terms of data collection and the analysis method was survey-correlation. The
statistical population of this study were 51 private hospitals in Tehran.
Questionnaires were used for data collection. Structural equation modeling was
used to analyze the data. The results showed that the implementation of the
lean six sigma does not have a positive and significant effect on
organizational performance; however, it is effective on the strategic knowledge
management. On the other hand, strategic knowledge management has a positive
and significant effect on organizational performance. Moreover, the
implementation of the lean six sigma has a positive effect on the
organizational performance through the mediating variable of strategic
knowledge management.  The research
findings can be used to improve the Organizational Performance of Medical
centers and private hospitals through the implementation of Lean Six Sigma.

Keywords: Lean Six Sigma, Strategic Knowledge Management,
Organizational Performance, Structural Equation Modeling.

Recebido
em 26/05/2020.  Aprovado em 08/07/2020.
Avaliado pelo sistema double blind peer
review. Publicado conforme normas da ABNT.

http://dx.doi.org/10.22279/navus.2020.v10.p01-16.1302

1 INTRODUCTION

The
importance of Six Sigma and its effects on organizational performance in
various services and industries has been considered by many organizations in
the last decade and knowledge management has been deemed as an influential
factor in organizational performance by many organizations and managers.
Managers in the field of quality are constantly concerned that controlling
production conditions and reducing waste would cause the least dissatisfied
customers (Youssouf, Rachid, & Ivon, 2014). Given the existing competitive
market and the need to increase product quality at the lowest cost, six Sigma
has become a very effective solution to increase the quality of processes in
the organization (Parsana & Desai, 2016) and a solution to production problems
and business processes (Smętkowska & Mrugalska, 2018), which would help to
meet customer needs by combining organizational wisdom and statistical methods
(Dubey, Gunasekaran, Childe, Fosso Wamba, & Papadopoulos, 2016). The lean
six sigma is a business improvement method that enhances shareholder value by
increasing the quality of production (Laureani & Antony, 2019). It helps
the organization to achieve its goal by adding efficient processes (Vinodh
& Swarnakar, 2015) and by eliminating flaws and reducing variance, it leads
to business success (Antony, Forthun, Trakulsunti, Farrington, McFarlane,
Brennan, & Dempsey, 2019). Six sigma is an effective way to speed up the
quality of products and services (Bazrkar, Iranzadesh, Feghhi Farahmand, 2017).
In fact, Six Sigma is a tool used to minimize process changes (Manville,
Greatbanks, Krishnasamy, & Parker, 2012) to ensure the desired results with
optimal improvements at the right time by focusing on the root causes of
changes and defects (Desai & Prajapati, 2017). By reducing the rate of
change and defects to 3.4 per million cases (Reosekar & Pohekar, 2014), it
is able to have a positive impact on organizational performance (Sin, Zailani,
Iranmanesh, & Ramayah, 2015). Six sigma allows the organization to achieve
strategic goals and consequently increase organizational performance (Uluskan,
Godfrey, & Joines, 2017). Organizational performance is defined as
measuring an organization's output relative to that organization's expected
output (Almatrooshi, Singh, & Farouk, 2016), which includes financial and
non-financial indicators that have the ability to evaluate, to measure the
achievement of the organization's goals (Singh, Darwish, & Potocnik, 2016).
On the other hand, knowledge management enables the organization to identify
the knowledge that exists in the organization and then use it to help the
organization (Kianto, Vanhala, & Heilman, 2016). In fact, the capacities
and tools that the knowledge management entails enable the organization to
acquire, store, and use knowledge (Ferraris, Santoro, & Dezi, 2017) and
provide a platform for the organization to offer new solutions and products
while increasing the productivity of business processes and improving product
quality for the organization's customers (Donate & de Pablo, 2015).
Knowledge management acts as a tool of power for organizations and individuals
and it is used to promote organizational goals to find, store, retrieve and
adapt to the organization (Karamitri, Talias, & Bellali, 2017) and the lean
six sigma plays a positive role in knowledge management activities (Corbett,
2011). The focus of knowledge management is on the optimal implementation of
knowledge creation and collection processes in the organization, sharing that
knowledge and using it to bring the organization to appropriate organizational
performance (Al Ahbabi, Singh, Balasubramanian, & Gaur, 2019). Strategic
knowledge management makes knowledge management a competitive advantage and
enables the firms to create value from their knowledge assets (Archer-Brown
& Kietzmann, 2018). In fact, strategic knowledge management is a distinct
approach that allows people, systems and responses emerging in a chaotic
environment manage and improve organizational performance (Sousa & Rocha,
2019). This study, considering the importance of strategic knowledge management
in improving the situation and performance of the organization and considering
the lean six sigma,  aims to find out how
the lean six sigma affects the organizational performance according to the
mediating role of strategic knowledge management among the private hospitals in
Iran. The use of lean six sigma methodologies in the healthcare sector has led
to an increase in patient satisfaction, quality of care and patient safety
(Trakulsunti & Antony, 2018). The six sigma approach is a good tool for
reducing risk and cost in healthcare institutions (Tagge, Thirumoorthi, Lenart,
Garberoglio, & Mitchell, 2017). The lean approach is a way to improve
production and reduce waste (Sari, Rotter, Goodridge, Harrison, & Kinsman,
2017). On the other hand, knowledge management in healthcare institutions leads
to improved service quality and cost reduction (Rezaei, Hosseinzadeh, &
Dehghan, 2018).

Here,
the variables related to lean six sigma, organizational performance and
strategic knowledge management are examined.

2 BACKGROUND
AND HYPOTHESIS DEVELOPMENT

2.1 Implementing
the lean six sigma and organizational performance

Today,
the use of lean six sigma methodologies is very useful for organizations operating
in a competitive world (Bazrkar & Iranzadeh, 2017). Six Sigma method
actually uses statistical methods to identify, reduce and eliminate deviations
and changes and it is used to improve processes (Wang & Chen, 2010). This
method improves performance in organized operations and increases customer
satisfaction with the organization's products and services (Chakravorty, 2009).
The lean six sigma was developed in 1990 with the combination of six Sigma and
the principles of lean production (Vinodh, Kumar, & Vimal, 2014). Six sigma
and lean six sigma are the same thing and end in the same situation. In fact,
the initial result of six Sigma is a uniform output and the result of lean six
sigma is a reduction in process time (Assarlind, Gremyr, & Bäckman, 2013)
and after the approval of some companies, organizations active in the
healthcare industry also used the lean six sigma. The lean six sigma in these
organizations focuses on direct care delivery, executive support, and financial
management (Laureani, Brady, & Antony, 2013). Performance management is
used as a way to evaluate and manage employees' work and guide and evaluate
their performance in the organization (Tweedie, Wild, Rhodes, &
Martinov-Bennie, 2019). Performance management is an important aspect of
organizational effectiveness through which the key work process is fulfilled
(Gruman & Saks., 2011). In this regard, six Sigma is a method to solve
problems related to performance in the organization (Parast, 2011).
Organizational performance is the comparison of an organization's actual
results or output with the its desired results (Tomal & Jones, 2015).

Shafer
& Moeller (2012) conducted a study entitled The Effect of Six Sigma on
Firm’s Performance. The results showed that six sigma has a positive effect on
performance. Alosani, Yusoff and Alansi (2018) in a study entitled “The Effect
of Six Sigma on Organizational Performance with the Mediating Role of
Innovation Culture” showed that organizational performance is affected by six
Sigma. Alkunsol, Sharabati, AlSalhi, & El-Tamimi (2019) investigated the
effect of six Sigma components on organizational performance in pharmaceutical
companies in Jordan. The results of this study showed that except for
additional processing and waiting time, all six sigma variables affect business
performance.

According
to Ahmed, Manaf and Islam (2018), in this study, with the components of
continuous quality improvement, lean innovations, Six-Sigma innovations,
patient safety, value-added activities, and group work the lean six sigma is
implemented.

Accordingly,
the first hypothesis of this research is defined as follows:

H1:
Implementing lean six sigma has a positive and significant effect on
organizational performance.

2.2 Implementation
of lean six sigma and strategic knowledge management

In
six Sigma more attention is paid to the amount of errors in the processes and
more improvement is achieved in processes in such a way that the errors are
removed or reduced (Cheng & Chang, 2012). Six sigma is an organized method
for advancing the strategic process, product development and new services that
relies on statistical and scientific methods to reduce customer error (De Mast
& Lokkerbol, 2012). As a management tool to increase efficiency, Six sigma
a systematic approach (Azis & Osada, 2013). Today, this method is used as a
comprehensive quality program that is able to manage the entire organization as
a management approach (Brun, 2011). DMAIC method is one of the important
methodologies of six Sigma, which includes the steps of definition,
measurement, analysis, improvement and control (Caiado, Nascimento, Quelhas,
Tortorella, & Rangel, 2018) and another important methodology of Six Sigma
is the DMADV method, which is used for new products and processes. This method
consists of five steps: definition, measurement, analysis, design and approval
(Murumkar, Teli, Jadhav, Dharmadhikari, & Nikam, 2018). Six Sigma and lean
six sigma are two approaches to increase quality that are used in healthcare
organizations (Mason, Nicolay, & Darzi, 2015). Lean six sigma increases
organizational performance and customer satisfaction (Sin et al., 2015) and it
is a method that increases the quality of products and services, eliminates
value-added activities and processes and speeds up quality improvement
effectively (Ferryanto, 2015). Six Sigma's importance and benefits are now
clear to many companies, which is why so much investment has been made in this
method (Krueger, Mellat Parast, & Adams, 2014). Knowledge management is a
managerial process to achieve competitive advantages in the organization
(Santoro, Vrontis, Thrassou, & Dezi, 2018). That is all the existing
processes, strategies and procedures to use the intellectual and knowledge
capacities within the organization are applied to achieve Value in the
organization (Hemsley & Mason, 2013) and improve the organizational
effectiveness as a regular operation. Using the knowledge of past decision
experiences, it improves the current and future decisions of the organization
(Dorasamy, Raman, & Kaliannan, 2013). These operations include the
processes of recording, storing, sharing, and ultimately using knowledge, which
helps to organize it for future use and retrieval by finding information
effectively (Al-Emran, Mezhuyev, Kamaludin, & Shaalan, 2018). Accordingly,
with the most valuable knowledge capabilities and processes, the strategic
knowledge management seeks to create a competitive advantage for the company
and it is focused on the strategic decision-making power of knowledge
production, allocation, sharing, maintaining and using the company's basic
knowledge (Cabrilo & Dahms, 2018). Rozo-Rojas, Díaz-Piraquive,
Ordoñez-Díaz, and Jesús Muriel-Perera (2019) in a study entitled “Quality
Assessment in Sterilization Processes at the Colombian Health Organization
using Six Sigma Criteria” showed that knowledge management is influenced by six
Sigma. Asif (2019) conducted a study entitled “Institutionalizing 6 Lean Sigma
and Creating Knowledge” and the results indicate the positive role of 6 lean
Sigma on knowledge creation. Gutierrez Gutierrez, Barrales-Molina and
Tamayo-Torres (2016) conducted a study to investigate the relationship between
six sigma and knowledge management and the results showed that six sigma
implementation has a positive effect on knowledge management and organizational
performance.

According
to López-Nicolás & Meroño-Cerdán (2011), in this study, strategic knowledge
is managed using the components of knowledge development in the hospital,
knowledge acquisition through official documents and manuals, recording the
results of projects and meetings, sharing knowledge through codified forms,
acquiring personal knowledge through professionals and colleagues, getting
advice from experts, sharing knowledge through informal conversations and
meetings, and gaining knowledge by personal advise.

Accordingly,
the second hypothesis of this research is defined as follows:

H2:
Implementing Lean six sigma has a positive and significant effect on strategic
knowledge management.

2.3 Strategic
knowledge management and organizational performance

The
ability to manage knowledge in the organization actually enables the
organization over time to manage the knowledge base, configure it, and confirm
the processes of knowledge discovery and maintenance as well as future uses in
the internal and external environment of the organization (Martinez-conesa,
Soto-Acosta, & Carayannis, 2017). Therefore, the goal of knowledge
management is the effective and maximum use of organizational knowledge and
individual or public knowledge of this knowledge (Chang & Lin, 2015). If
knowledge management is implemented properly, it is able to create new
opportunities and competitive advantages for customers and improve the
performance of the organization (Huang, Quaddus, Rowe, & Lai, 2011). The
main components of knowledge management include knowledge acquisition,
knowledge creation, knowledge storage and knowledge sharing (Liu, 2011).
Strategic knowledge management can define the organization's approach in such a
way that the organization could coordinate all available resources of knowledge
and ability with its strategy and achieve sustainable competitive advantage
(Ferreira, Mueller, & Papa., 2018). It includes various skills and
techniques, which align human resource capabilities with the organization's
strategic goals (Marques, Leal, Marques, & Cardoso, 2016). Contrary to many
people's beliefs, performance management is not a modern concept, and the New
York City Council sought data analysis and forecasting in the early 1970s.
However, the term "performance management" was not used until the
1970s (Fryer, Antony, & Ogden, 2009) and in the twentieth century the
concept of organizational performance was created to help managers plan,
implement and control changes and quality of operations (Markos, & Sridevi,
2010). Measuring organizational performance is essential to achieve
organizational goals, and this is achieved by performance indicators.
Therefore, determining these indicators, their relation to goals and their
dependence on operations for each organization is very important (Popova &
Sharpanskykh, 2010). Reducing the organization's costs, the profit of the
organization, the amount of sales, the turnover, the turnover of the
organization's assets and the turnover of the organization's shares are the
most common performance indicators for this purpose (Choudhary, Akhtar, &
Zaheer, 2013). On the other hand, the balanced scorecard method for evaluating
performance is able to evaluate performance based on components beyond the
financial criteria (Hu, Leopold-Wildburger, & Strohhecker, 2017). Iqbal,
Latif, Marimon, Sahibzada and Hussain (2019) conducted a study entitled “From
Knowledge Management to Organizational Performance” and their results showed
that organizational performance is affected by knowledge management. Nisar,
Prabhakar, & Strakova (2019) conducted a study entitled “The Benefits of
Information in Mass Communication Websites, Knowledge Management, and Smart
Organization” and the results showed that knowledge management affects
organizational performance. Al Ahbabi et al. (2019) sought the relationship
between knowledge management processes and organizational performance in the
public sector and the results of this study showed that knowledge management
processes have a positive and high impact on organizational performance.

According
to Masha’deh et al. (2016), in this study, organizational performance is
assessed by the components of customer satisfaction, cost management,
organizational productivity, asset management, quality development, and
organizational responsiveness.

Accordingly, the third hypothesis of this
research is defined as follows:

H3:
Strategic knowledge management has a positive and significant effect on
organizational performance.

In
this study, it is attempted to examine the mediating role of strategic
knowledge management in the relationship between lean six sigma and
organizational performance. Accordingly, the fourth hypothesis of the research
is as follows:

H4:
Implementing lean six sigma has a positive and significant impact on
organizational performance through the mediating role of strategic knowledge
management.

According
to the variables studied and the proposed hypotheses, the conceptual model of
the research is shown as follows.

Implementation Lean Six Sigma

Organizational Performance

Strategic knowledge Management

H1

H4
H3

H2

Figure 1. Conceptual
Research Model

Source: Authors
(2020).

3 RESEARCH
METHODOLOGY

This
research is applied in terms of purpose and is descriptive-survey in terms of
data collection method. Library resources are used to collect information on
theoretical foundations and thematic literature, and field study and questionnaire
are used to collect data. In the end, structural equations and the third
version of Smart PLS software were used to measure and model the relationships
between the variables.

As
mentioned earlier, this study uses the method of partial least squares in
structural equations to test the hypotheses. This method is the best tool for
the studies in which the relationships between variables are complex, sample
size is small and data distribution is abnormal (Tenenhaus, Amato, &
Esposito Vinzi, 2004). Since the interactive effect of two variables with
normal distribution is often skewed, it is better to use the PLS method to
investigate the interactive effect that is not sensitive to normal distribution
(Davari & Rezazadeh, 2013). Descriptive data are analyzed and the fitting
of the model is examined in three parts of the fitting of the measurement
models, fitting of structural models and overall model fitting.

The
main tool for data collection in the present study is a questionnaire. To
collect information in this study, a questionnaire containing 30 measures of
five-point Likert scale was used. To measure the research variables, including
implementing lean six sigma, which includes 16 measures in the questionnaire,
the study of Ahmed et al. (2018) has been used. Eight items based on
López-Nicolás & Meroño-Cerdán (2011) were used to measure the strategic
knowledge management variable. Six items based on Masa'deh, Obeidat and Tarhini
(2016) research studies were used to measure organizational performance variable.

To
ensure the content and face validity of the questionnaire, its initial edition
was reviewed by experts and experts in this field, and according to their
comments and suggestions, the necessary corrections were made to the items and
it was used after their approval. Cronbach's alpha test was used to ensure the
reliability of the questionnaire and the obtained values showed that the
questionnaire had acceptable reliability. The results of this study are shown
in Table 1. The statistical population of this study consists of managers of
private hospitals in Iran. Due to the high volume of the statistical community
and the need to use the statistical sample, the managers of private hospitals
in Tehran are introduced as the sample size. According to 51 private hospitals
in Tehran, the managers of the statistical sample size are 255 managers. To
distribute the questionnaire among the statistical sample size, the managers of
hospitals (n=255) are selected as a member of the statistical sample size, and
finally 100 questionnaires with complete and valid answers were collected.

4
RESULTS

4.1 Checking the normality of data

Before
implementing the structural equation modeling steps, the normality of data is
examined with the Kolmogorov-Smirnov test and the results are displayed in
Table 1.

Variable

Mean

SD

Level of significance

Lean six sigma

3.18

1.071

0.020

Strategic knowledge management

3.17

1.044

0.038

Organizational
performance

3.37

1.067

0.018

Table
1. Checking the normality of the data

Source: Prepared
by the authors (2020)

Since
the significance level of the test of each of the studied variables is less
than 0.05, it can be said with 95% confidence coefficient that not all the
variables under study are normal. Given that, the data is abnormal and
considering that, the use of Smart PLS software does not require the normal
distribution and the possibility of solving models with fewer items as well as
fewer samples compared to other software, it is recommended to use Smart pls
software (Hair, Ringle & Sarstedt, 2011).

4.2 Description
of demographic characteristics

Here,
the demographic characteristics of the respondents are examined in terms of
gender, education, and experience and the results are displayed in Table 2.

Male

Female

64%

36%

Gender

28.125%

71.875%

30.555%

69.444%

Education

Master’s degree

PhD

15.63%

34.37%

50%

13.88%

22.24%

63.88%

Work experience

Less than 5
years

Between 5 and
10 years

More than 10 years

Table 2. Demographic characteristics

Source: Research results (2020)

According
to Table 2, a total of 64% of the respondents (100 people), equal to 64
subjects were male and 36%, or 36 subjects were female. 28.125% of men (n=18)
had master's degrees and 71.875% (n=46) of them had PhD. On the other hand,
30,555% (n=11) of women had master's degrees and 69,444% (n=25) of them had
PhD. 15.63% (n=10) of men had less than 5 years, 34.37% (n=22) had 5-10 years
and 50% (n=32) had over ten years of experience. 1.88% (n=5) of women had less
than 5 years, 22.24% (n=8) had 5-10 years and 63.88% had over ten years of
experience. To fit the model, three parts of measuring models, structural
equations and general model are used.

4.3 Fitting the
measurement models:

To
analyze the measurement model, 3 criteria of reliability, convergent validity
and divergent validity are used. To measure the reliability of the model, the
combined reliability and Cronbach's alpha are examined, which are shown in
Tables 3 and 4.

Question

Factor Loading

Cronbach's Alpha

CR

AVE

LSSE1

LSSE2

LSSE3

LSSI3

LSSLI1

LSSLI2

LSSLI3

LSSS1

LSSS2

LSSS3

LSST1

LSST2

LSST3

LSSV1

LSSV2

LSSV3

0.658

0.505

0.670

0.694

0.607

0.664

0.675

0.692

0.722

0.626

0.647

0.615

0.745

0.708

0.726

0.724

0.918

0.928

0.449

Implementation Lean Six Sigma

SKM1

SKM2

SKM3

SKM4

SKM5

SKM6

SKM7

SKM8

0.787

0.733

0.588

0.721

0.786

0.665

0.653

0.729

0.858

0.890

0.505

Strategic Knowledge Management

OP1

OP2

OP3

OP4

OP5

OP6

0.755

0.669

0.741

0.741

0.786

0.784

0.841

0.883

0.558

Organizational Performance

Table 3. Data validation
specifications

Source: Search
results (2020).

Strategic
Knowledge Management

Organizational Performance

Implementation

Lean

Six Sigma

0.640

Implementation
Lean Six Sigma

0.686

0.503

Organizational Performance

0.660

0.602

0.631

Strategic Knowledge Management

Table 4. Structure
correlation matrix and divergent validity analysis

Source: Search results (2020).

Given
that the index for Cronbach's alpha is at least 0.7 (Nunnally, 1978) and 0.6 is
also appropriate according to other sources (Moss, Rousseau, Parent,
St-Laurent, & Saintonge, 1998), Table 3 shows that these indicators are
achievable. The appropriate index for composite reliability (CR) should be
greater than 0.7 (Werts, Linn, & Jöreskog, 1974), which according to the
composite reliability values in Table 2, this criterion has been observed by
model structures.  Suitable indicator for
convergent validity (AVE) are the values higher than 0.5 (Fornell & Larcker,
1981) and according to Table 3, the obtained values indicate compliance with
this criterion. Confirmation of convergent validity depends on the fact that
the average variance extracted for each structure is greater than the common
variance of that structure with other structures. In fact, the mean square
variance extracted for each structure should be greater than the correlation
between structures (Fornell & Lacker, 1981) that the values obtained in
Table 4 confirm the divergent validity.

4.4 Structural
fitting of the model

Here,
the PLS or modeling structural equations is used to test the research
hypotheses. In this method, R2, T-Value, P-Value and GOF tests from the third
version of Smart PLS software are used and the VAF statistics and bootstrapping
methods are applied to investigate the mediating role.

4.4.1.     R2 test: To check the intensity of the
relationships between the structures, the R2 test is used, which is only valid
for the dependent variable, and the result of this test is shown in Figure 2.

Figure
2. R2 test and model with factor loads and standard
coefficients

Source: Prepared
by the authors (2020).

The
appropriate indicators for the R2 test are three values of 0.19, 0.33 and 0.67,
which indicate that the index is poor, medium and strong (Chin, 2010).
Therefore, according to Figure 2, the model at R2 level has an acceptable fit.
On the other hand, considering the value of the appropriate index for factor
loads, which is at least 0.4 (Hulland, 1999) and according to Figure 2, all
coefficients of factor loads are higher than the specified index, which
indicates the suitability of the model.

4.4.2.     T-value & path coefficients test: The
T-Value indicates the significance of the relationships between the variables
and expresses the values of the coefficient of the relationship path between
the variables and the results of this test are given in Figure 3.

Figure
3. T-value & path coefficients test

Source: Prepared
by the authors (2020)

The
appropriate index for the T-Value test is greater than 1.96. If the value of T
is greater than 1.96, it means a positive and significant relationship, and if
it is between -1.96 and +1.96, it means that there is no significant
relationship, and if it is less than -1.96. It means a negative but significant
relationship.  Also, values of path
coefficients greater than +0.6 indicate a strong relationship between the two
variables, values of path coefficients between 0.6 and 0.3 indicate a moderate
relationship between the two variables and values less than 0.3 indicate a poor
relationship between the two variables (Chin, 1998). Therefore, according to
T-value and Figure 3, values, there is a positive and significant relationship
between Implementation Lean Six Sigma/ Strategic Knowledge Management variables
and Strategic Knowledge Management /Organizational Performance. However, there
is no significant relationship between Implementation Lean Six Sigma and
Organizational Performance variables. On the other hand, according to the
values of path coefficients and Figure 3, there is a strong relationship
between Implementation Lean Six Sigma/ Strategic Knowledge Management and
Strategic Knowledge Management/ Organizational Performance variables; however,
there is a poor relationship between Implementation Lean Six Sigma and
Organizational Performance.

P-Value
test: This test is for deciding on the rejection or acceptance of the hypotheses.
The appropriate criterion for the P-Value test are values less than 0.05 (Kock,
2014). Therefore, P-Value results confirm the relationship between Lean Six
Sigma/Strategic Knowledge Management (P-Value = 0.000) and Strategic Knowledge Management/
Organizational Performance (P-Value = 0.000). However, the P-Value results do
not confirm the relationship between Implementation Lean Six Sigma and
Organizational Performance (P-Value = 0.893).

GOF
test: To evaluate the overall fitting of the model, the fitness index is used,
which was introduced by Tenenhaus et al (2004) and this index is obtained by
multiplying the product of the mean of commonalities of the dependent
structures multiplied by their mean R2. This index is examined through the values  0.01, 0.25 and 0.36 as poor, medium and
strong values  (Wetzels,
Odekerken-Schröder, & Van Oppen, 2009). Therefore, according to the
obtained value of 0.405 for this criterion, the model has a strong overall
fitting.

VAF
test and bootstrapping method: Due to the abnormality of the data, the use of
bootstrapping method is recommended to evaluate indirect relationships and
mediating role (Hayes, 2009) and VAF statistic is used to determine the
severity of indirect effect through mediating variable the value of which is
between 0 and 1. Its proximity to 1 indicates the strength of the mediating
variable effect. This value measures the ratio of the indirect effect to the
total effect and is obtained through Equation 1 (Doustdar, Mombini, &
Goodarzi et al., 2016).

Eq.1)
VAF =  (a×b)/((a×b)+c)

Where,
a is the value of the path coefficient between the independent and median
variables, b is the value of the path coefficient between the mean and
dependent variables, and c is the value of the path coefficient between the
independent and dependent variables.

Eq.2)
VAF = 3.072/3.864=0.795

A
value of 0.795 for VAF indicates a partial mediation. On the other hand, after
performing bootstrapping in Smart PLS 3 software with 500 samples, the results
of Table 5 were obtained.

P Value

T- Value

S.D

Sample
Mean

Original
Sample

0.000

6.714

0.105

0.693

0.703

ILSS →SKM →OP

Table 5.
Bootstrapping method results for the mediating variable

Source: Prepared
by the authors (2020)

Given
the P-Value and T-Value of 0.000 and 6.714, the mediating role of strategic
knowledge management in the relationship between the implementation of the lean
six sigma and organizational performance is confirmed.

4.5 Testing Research Hypotheses

In
this section, the results obtained for confirming or rejecting research
hypotheses are provided in Table 6.

Test result

P-value

t-value

Path coefficient

Path

Hypothesis

Direct Effect

Not supported

0.893

0.135

-0.019

ILSS →OP

H1

supported

0.000

38.662

0.866

ILSS →SKM

H2

supported

0.000

6.247

0.809

SKM →OP

H3

Mediator effect

supported

0.000

6.714

0.702

ILSS →SKM →OP

H4

Table
6. Research
Hypothesis Test

Source: Prepared
by the authors (2020)

According
to Table 6 and the amount of -Value between Implementation Lean Six Sigma and
Organizational Performance, which is 0.135 and less than 1.96, it is concluded
that that there is no significant relationship between these two variables.
According to Path Coefficients, which is -0.019 and this value is less than
0.3, it is concluded that that there is a poor relationship between these two
variables. On the other hand, the P-Value between these two variables is 0.893
and is more than 0.05, so the P-Value is not validated and the H1 hypothesis is
rejected. However, T-Value between Implementation Lean Six Sigma/ Strategic
Knowledge Management variables and Strategic Knowledge Management/
Organizational Performance variables are 38.662 and 6.247, which are higher
than 1.96, which means a positive and significant relationship between them. On
the one hand, the Path Coefficients values between these variables are 0.868
and 0.809, which are more than 0.6, and this means a strong relationship
between these variables. On the other hand, the P-Value between these variables
are 0.000, which is less than 0.05, and this confirms the P-Value for these
variables. Therefore, it is concluded that the H2 and H3 are confirmed.
According to Table 5 and the value of 6.714 for T-Value, which is greater than
1.96 and the value of 0.000 for P-value which Less than 0.05, the
implementation of the six lean segments through the mediating role of strategic
management has a positive and significant effect on organizational performance,
and the H4 hypothesis is confirmed.

5 DISCUSSION
AND CONCLUSION

The
results of this study show that the implementation of lean six sigma does not
affect organizational performance (H1), which is contrary to the results of
Shafer & Moeller (2012), Alosani et al. (2018) and Alkunsol et al. (2019).
Therefore, it is suggested that hospital managers make appropriate and serious
decisions to increase and improve the organizational performance along with the
implementation of six lean sigma to evaluate and manage the work of employees
and guide and evaluate their performance in the organization. On the other
hand, the implementation of lean six sigma affects strategic knowledge
management (H2), the results of which are consistent with Rozo-Rojas et al.
(2019), Asif (2019) and Gutierrez Gutierrez et al. (2016). Therefore, it is
suggested that hospital managers implement lean six sigma a to improve
strategic knowledge management processes in the organization to create a
competitive advantage and increase strategic power to help knowledge
generation, knowledge allocation, knowledge sharing and knowledge retention.
The results of this study also indicate that strategic knowledge management
affects organizational performance (H3) that the results obtained for this
hypothesis are in line with Iqbal et al. (2019), Nisar et al. (2019) and Al
Ahbabi et al. Therefore, it is suggested that hospital managers use strategic
knowledge management processes to improve organizational performance so that
key work processes can be done better and more organizational goals are
achieved. Finally, the results of this study showed that the implementation of
lean six sigma affect organizational performance (H4) through the mediating
variable of strategic knowledge management. Considering that, this research has
been done in private hospitals in Tehran- Iran., different results may be
obtained in other places and organizations. Researchers have always encountered
limitations and challenges in their research, some of the limitations of the
present study included the lack of awareness and knowledge of the research
community (managers of private hospitals) of the concepts of six-sigma lean
management, and as a result, some of them refused to complete the
questionnaire. Another challenge was managers' lack of discernment of the
differences between the Lean six sigma and other process improvement measures
and they considered their process improvement programs as lean Six Sigma.
Another limitation and challenge was the lack of familiarity of managers with
strategic knowledge management concepts that reduced the accuracy of their
responses.

Finally,
suggestions for further research are provided:

•             Using methods such as in-depth
interviews with experts and Delphi method to strengthen and improve hypotheses

•             Collecting data in all public and
private health centers and optimizing the proposed model

•             Investigating the effect of success
factors on the implementation of lean six sigma an on different dimensions of
organizational performance and strategic knowledge management

•             Investigating the effect of the
presence or absence of quality management approaches such as ISO on the
proposed model

•             Investigating risk factors and
crises against implementing lean six sigma  on the proposed model

•             Investigating all organizational
factors to have a better understanding of strategic knowledge management.

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