Abstract

This research is being done in PT X, an oil and gas company in Indonesia. This study aims to examine some influencing factors on financial performance, which consist of cultural entropy and employee engagement, with knowledge management as the mediating variables. This research uses PLS (Partial Least Square) with a structural equation model (SEM). Results show a significant negative effect from cultural entropy on financial performance while employee engagement in financial performance has a significant positive effect. In addition, knowledge management affects mediating cultural entropy and employee engagement. This study has different variables and proxies of measurement that are part of Organizational Knowledge Management Creation theory dimensions, the Tacit Knowledge and Explicit Knowledge. The cultural Entropy variable is also a relatively new variable that needs to be studied.