This paper aims to analyze the mediating role of the knowledge management (KM) process between collaborative culture and organizational performance at higher education institutions (HEI). A structured questionnaire survey was conducted with 236 faculties of quality accredited HEIs out of 580 fulltime faculties. The knowledge management process positively influenced organizational performance, mediates between collaborative culture and organizational performance but teamwork and diversity indirectly contribute to organizational performance. The findings enriched ideas to policy makers and authorities of HEI emphasizing the need to explore internal collaboration, leverage knowledge management processes for improved performance. The mediating role of the KM process through the application of knowledge-based view theory and system thinking theory has added value significantly in the context of developing economies of South Asia-Nepal.