Human Resource Management - Organizational Culture & Organizational Leadership Effectiveness
Leadership behaviors, Organizational Culture, and Knowledge Management Practices: an Empirical
Investigation M. Birasnav, Alok Goel & Renu Rastogi
Knowledge management (KM) is a collection of systematic approaches to help information and knowledge flow to and between the right people at the right time, and so they can perform more efficiently and effectively to create value for organizations. These organizations operate through its human capital whose skills and knowledge need to be cultivated and leveraged to achieve competitive advantage that leads to organizational success. Studies that focus empirical perspectives on linkages between KM and organizational culture are scarce particularly in the Indian context. In this paper results from an empirical study on the above relationships are reported. This study analyses the extent, strategy and imperatives of knowledge management in Indian knowledge intensive service firms and examines at what extent organizational culture is established and leadership behaviors are executed for successful KM implementation.
Data were collected from a wide range of executives working in small, medium and large Indian knowledge intensive service firms through suitable instruments. Overall 220 valid responses were received. The results obtained from data analyses clearly show a strong positive influence of culture on certain practices (acquisition, conversion, application and protection) of knowledge management. The results of this study will be of interest to business managers and to any organization striving for successful KM implementation.
Keywords: Knowledge Management; Leadership, Organizational Culture, KM Processes
Introduction Organizational culture describes the collective perceptions, beliefs and values that individual employees develop through their work experiences. Culture is manifested in an organization’s climate- the behaviors and strategies that can be managed in support of organizational goals. Culture drives an organization’s formal and informal expectations of individuals, defines the types of people who will fit into the organization, and affects how people interact with others both inside and outside the organization. Knowledge cultures are particularly advanced organizational cultures, and require close alliance between the cultural values and the systems and processes in practice. Building a conducive knowledge culture within which people operate in an organization is a crucial requirement for effective knowledge management (Gupta and Govindarajan, 2000; Gummer, 1998). Knowledge management is a systematic and integrative process of coordinating organization-wide activities of acquiring, creating, storing, sharing, diffusing, developing, and deploying knowledge by individuals / groups in pursuit of major organizational goals (Rastogi, 2000). It is a process through which organizations
create and use their institutional and collective knowledge by incorporating organizational learning, knowledge production, and knowledge distribution. Knowledge exists and is shared at different levels in organizations. Knowledge acquires greater value when it forms part of a knowledge creation or knowledge transfer process. In this way, firms achieve success if they create new knowledge spread across the organization and incorporate it into new technologies and products (Nonaka and Takeuchi, 1995).
The organization’s success finally depends on the speed at which it can generate, capture and disseminate knowledge and then use this knowledge to develop capabilities that can not easily be copied by rivals. The ability to create knowledge and to continue to learn from it constitutes the competitive advantage as innovative knowledge developed today will be the core knowledge of tomorrow (Zack, 1999). While most managers recognize the importance of culture, many find it difficult to articulate the culture-knowledge relationship in ways that lead to action (De Long and Fahey, 2000). The purpose of this study is to
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present empirical findings that examine the culture- knowledge relationship in knowledge management that leads to action. This study aims to explore linkages of organizational culture and knowledge management processes within knowledge intensive service Industry.
Theoretical framework and literature review:
Knowledge management is an integrated, systematic approach for identifying, acquiring, transforming, developing, disseminating, using, sharing and preserving knowledge relevant to achieving specified objectives. It is a process of creating, structuring and leveraging collective know-how, experience and wisdom of an organization to improve its business performance. The knowledge sources encompass databases, documents, policies and procedures, as well as the un-captured tacit expertise and experience stored in individual workers’ heads. Knowledge Management (KM) refers to all systematic activities for creation and sharing of knowledge so that knowledge can be used for the success of the organization. KM processes provide a framework for connecting people with people and people with information to develop and share distilled learnings and formulate best practices. Knowledge is undoubtedly an indispensable resource to create value for the society. The importance of knowledge as a source of sustainable competitive advantage has been discussed by many authors (Drucker, 1993; Nelson, 1991; Prahalad and Hamel, 1990) but only few have articulated how organizations actually create and manage knowledge.
There are two kinds of knowledge; viz., explicit knowledge and tacit knowledge. Explicit knowledge can be expressed in words and numbers and shared in the form of data, scientific formulae etc. Explicit knowledge is stored in a mechanical or technological device, such as documents or databases. On the other hand, tacit knowledge is highly personal, hard to formalize, hence difficult to communicate or share with others. Subjective insights and intuitions fall into this category of knowledge. Difficult to codify, tacit knowledge remains deeply rooted in an individual’s action and experience, as well as in the ideals, values, or emotions a person embraces. These two forms of knowledge are complementary to each other, and both are crucial to knowledge creation. Knowledge
management involves individuals and groups both within and among firms managing tacit and explicit knowledge to make better decisions, take actions and deliver results to support the underlying business strategy.
Figure 1 Conceptual diagram of SECI process
Source: Adapted from Nonaka and Takeuchi (1995); I=Individual; G=Group; Org=Organization
Nonaka (1990) described four knowledge conversion processes in the form of SECI model as depicted in figure 1; viz. socialization, externalization, combination, and internalization. Each process involves converting one form of knowledge (tacit or explicit) into other (tacit or explicit). This model focuses on the important issue of knowledge creation through organizational sharing, and can help identify and evaluate certain key activities in KM practices.
Bhatt (2001) identified five steps in KM process activities: knowledge creation, knowledge validation, knowledge formatting, knowledge distribution, and knowledge application. This model covers the full range of activities involved in organizational knowledge flow. From an organizational capabilities’ perspective, Gold et al (2001) argued that the KM process consists of four dimensions, viz. knowledge acquisition, knowledge conversion, knowledge application, and knowledge protection. This model is sufficiently broad to permit complete analysis of organizational KM capabilities.
The knowledge acquisition process refers to
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the business process involving accumulation of knowledge and creation of new knowledge from the existing knowledge (Gold et al, 2001). Organizational learning influences knowledge acquisition in two ways. First, it facilitates rapid collection of know-how to solve specific problems based on the existing knowledge. Second, firms use organizational learning to create new premises (such as paradigms, mental modes, or perspectives) to override existing knowledge. Once these two kinds of learnings have been encouraged, the firm can obtain knowledge from both internal and external sources. The knowledge conversion process represents a business process that renders the existing knowledge useful. Knowledge conversion involves organizing, structuring, storing, combining, and linking digital storage such as documents and images with knowledge units.
The knowledge application process is the process of making knowledge active and relevant for the firm in creating value. For example, it is argued that knowledge application involves retrieving and using knowledge in support of decisions, actions, and problem solving and thus generates and sustains competitiveness (Bose, 2002). Using knowledge entails interaction between tacit and explicit knowledge, leading to adjusted strategic direction, problem solving, and improved efficiency (Gold et.al., 2001). The knowledge protection process is the ability to protect organizational knowledge from illegal or inappropriate use or theft. Protecting a firm’s knowledge is necessary to preserve its competitive advantage (Liebskind, 1996).
Knowledge resting in the minds of organizational members is the greatest resource. Therefore knowledge management is not only about managing knowledge assets, but also managing the interpersonal and organizational processes through which these assets are manipulated (Malhotra, 2000). In this study we examine key factors of organizational culture that support or hinder effective knowledge management, and present a selected compilation of these cultural factors that can help an organization create, share, and use knowledge effectively. The intended outcome of this study is a list of factors that can be used to assess organizational culture, and its ability to foster and sustain a knowledge management initiative. This study also examines cultural factors that best
support the flow and management of knowledge within an organization.
1. Objectives: This study attempts to examine key factors of organizational culture, as evidenced in the literature that supports or hinders effective knowledge management. This research addresses the following questions: How does an organization manage knowledge resources to gain and sustain competitive advantage? It seeks to answer the question: Is there a significant and positive relationship between KM practices and organizational culture and leadership in Indian knowledge intensive service firms?
2. Methodology: This study first examines the theoretical understanding of linkages of knowledge management with organizational culture followed by review of qualitative and quantitative studies to uncover the manifestation of knowledge management processes and reveal its antecedents and consequences.
Data has been collected through a survey wherein 220 valid, complete responses were received from executives working in large, medium and small Indian knowledge intensive service firms through a suitable instrument. The online survey tools were also used in addition to personal interviews with respondents for data collection. The survey instrument comprises module of organizational culture, leadership and four modules of KM processes which are concerned with knowledge management processes viz. Knowledge acquisition, knowledge conversion, knowledge application and knowledge protection by an organization. The scores in the scale range from values 1=strongly disagree to 5=strongly agree. The reliability co-efficient of the scale is 0.886. SPSS was used to perform the computations. In addition to the survey conducted, this analysis draws upon three sources of data: (1) in-depth interviews; (2) public documentation; and (3) direct observation.
3. Results: Analysis and Findings: The primary goal of this investigation is to assess the relationship between KM, leadership and organizational culture. To determine the extent of the relationship between KM, leadership and
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organizational culture, several correlations were computed. They are detailed in Table 1 and Table 2. It was found out that knowledge application has the highest rating i.e. 3.65. It was closely followed by knowledge acquisition (3.59), Leadership (3.57), knowledge conversion (3.47), knowledge protection (3.46) and organizational culture (3.23).
Table 1
Mean and Standard Deviation of Organizational Culture,
Leadership and KM dimensions (N=220)
S.No. Dimensions of Org.
Culture and Knowledge Management
Mean Standard Division
1. Organizational Culture 3.23 0.72
2. Leadership 3.57 0.82
3. Knowledge Acquisition 3.59 0.71
4. Knowledge Conversion 3.47 0.78
5. Knowledge Application 3.65 0.76
6. Knowledge Protection 3.46 0.83
It is evident from the data analysis that knowledge management and organizational culture are strongly and positively correlated to each other. Table 2 and Figure 2 (scatter plots) shows the association and importance of organizational culture and leadership in knowledge management processes.
Table 2
Relationship (Correlation Coefficient) of KM dimensions with Organizational Culture and leadership (N-220)
Dimensions of Org. Cul- ture, Lead- ership and K n o w l e d g e Management
K n o w l - e d g e A c u i s i - tion
(know1)
K n o w l - e d g e Conver- sion
(know2)
K n o w l - e d g e A p p l i - cation
(know3)
K n o w l - e d g e P r o t e c - tion
(know4)
O r g a n i z a - tional Cul- ture
0.52** 0.58** 0.56** 0.38**
Leadership 0.41** 0.40** 0.42** 0.31**
** Significant (p≤0.01)
Organizational members must be aware of the needs to manage knowledge and to recognize it as a key resource for the viability of an organization. Management leadership plays a key role in influencing the sharing of knowledge. Leaders are important in acting as role models to exemplify the desired behavior for KM. They should exhibit a willingness to share and offer their knowledge freely with others in the organization, to continuously learn, and to search for new knowledge and ideas (Goel et. al, 2010). Over time, as KM evolves and begins to reflect the values of the organization, KM can become a part of the organizational culture.
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Figure 2 Scatter plot of correlation with KM dimensions
4. Discussions: Based on the above analysis, this study found that organizational leadership and KM processes are positively related and will significantly affect
knowledge conversion and knowledge application in the organization. Leadership plays a very crucial role in bringing cultural transformation and determines the long term sustainability of organizations. Organizational culture emerged as one of the critical factor for sharing of knowledge. Many authors agree that more than other factors, organizational culture holds the key to the successful knowledge management (Rai, 2011; Gupta and Govindarajan, 2000; Martin, 2000; Knapp and Yu, 1999; Gummer, 1998). The key to effective management of knowledge is to create an organizational culture that understands how knowledge is important and then to create processes to put that knowledge into action (Martin, 2000).
Being service based entities these companies are knowledge-intensive which involve employees to working in teams and thus leadership plays an important role in empowering employees to take decisions. According to Singh and Soltani (2010) awareness level and commitment was found to be high in Indian IT companies but the role of leadership in allocating the necessary resource towards sustaining KM initiatives require attention. In essence, similar findings were obtained in previous studies involving knowledge intensive service companies (Chawla and Joshi 2010; Singh & Saltani 2010; Singh 2008; Pillania 2005; Chong 2006). They also found that individuals were not visibly rewarded for knowledge sharing and knowledge management was not given due importance in the performance appraisal system. Leadership plays an important role in defining the importance of KM in such organizations. Therefore role of leadership in making KM as an integral part of an organizational fabric is of utmost importance.
The findings suggest that organizational culture influences the KM approach initially chosen by an organization, the evolution of KM approach and the migration of knowledge. Moreover, the findings suggest that KM eventually can become an integral aspect of organizational culture. In essence, organizations having dominant bureaucratic cultures with traces of innovativeness, senior management support legitimizes KM, but the innovativeness of the culture enables it to expand far beyond an organization-wide KM repository. Specific KM behaviors such as sharing ownership and maintenance of knowledge, knowledge sharing,
M. Birasnaw, Alok Goel & Renu Rastogi
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and knowledge reuse seem to be influenced largely either by the individualistic or cooperative nature of the culture. Individualistic cultures inhibit sharing, ownership, and reuse, while cooperative cultures enable the creation of virtual communities. This dimension of organizational culture emerged as a critical factor in our examination of the influence of culture on KM initiatives.
Among the most specific findings in this research study are the factors influencing knowledge sharing behavior. This includes the leadership team, which must articulate and act on the same principles of sharing being preached to the employees as also stated by Rai (2011) who affirmed that culture was the largest obstacle faced by organizations in creating a successful knowledge-based enterprise. Reward management emerged as another important factor that should be designed to establish a more direct relationship between knowledge sharing, learning and performance.
Conclusions The results of this study provide ample support for the notion that knowledge management, leadership and organizational culture are significantly and positively related to each other. Many of the researchers who have theorized about this relationship have lacked empirical data on which to base their ideas, but this study clearly details this link. The study, however, attempts to present key cultural factors that appear to support effective knowledge management processes. Overall, the findings of this study and the framework used here point to the importance of the role of organizational leadership (top executives) in information and knowledge management and to the need for the leadership literature to address this in more details, both theoretically and empirically.
The results of this study will be of interest to business managers and to any organization wishing to implement knowledge management. There is scarcity of studies on the empirical perspectives on linkages of culture with knowledge management processes in the literature especially in the context of knowledge intensive service industry. This paper addresses this gap and represents a small step towards filling the void in the study of knowledge management in the Indian context. Finally, this study makes a significant contribution
in understanding the potential antecedents and consequences of knowledge components. Its intent is to provide a starting point from where senior executives can begin assessing their organizational culture, and its ability to develop and sustain a knowledge management initiative. This paper is part of a PhD research study being undertaken on a wider canvas and analysis done on other aspects like comparison of dimensions among respondents on the basis of age, gender, experience, status of the organization and level of the respondent could not be incorporated. The study does not attempt to analyze organizational psychology or why organizations behave the way they do. This study can be employed as a “springboard” for further empirical research.
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M. Birasnaw, Alok Goel & Renu Rastogi
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