**7. Conclusion and recommendations**

106 New Research on Knowledge Management Models and Methods

Further, this gap is often difficult to close. There are other reasons related to real life situations at work; employees with superior knowledge often get subjected to office politics. As a result, those who occupy positions of authority are not always those with the highest levels of knowledge. Literature makes a clear distinction among sources of power, namely the difference between position or legitimate power on one hand, and expert power on the other hand (Yukl, 2002). Simply put by one of the managers whom we interviewed in our sample, "those who are too busy with internal politics hardly have time to evolve intellectually … but those who are good at acquiring knowledge and excelling on the job, have too little time to engage in office politics." As a result, those who are good at politics survive over those who are busy at work, unless there is transformational leadership that reestablishes the balance and sets direction. Yukl (2002) interprets Schein's work on how a transformational leader influences organizational culture (Schein, 1992). Attention, reaction to crises, role modeling, rewards, and clarity of criteria for evaluation, are all measures that Schein (1992) presents as factors that influence culture. Whether instilling culture in a newly created organization, or changing culture in an existing organization, leaders would need a mechanism to embed knowledge transfer in daily operations and be able to dismantle dysfunctional and counterproductive styles of management (Kets De

One of the theories that shed light on click formation within the organization is the leadermember exchange (LMX) theory, rooted in the Vertical Dyad Linkage (VDL) theory (Dansereau et al., 1975). It describes the inner versus outer group within the organization whereby the inner group is formed based on the quality of the exchange between the leader and the follower. However, in most practical situations those high performers who, by nature, seek knowledge continuously could be part of the outer group for reasons other than performance. This is the critical point that upper management needs to carefully identify and handle (Truckenbrodt, 2000). Follett (1924) argued that organizational authority should gravitate towards those with knowledge. If this were to apply, then the organizational culture would be the integrator between expertise and authority rather than encourage click

Figure 2 shows an expanded model that uses dimensions similar to the ones used in the LMX theory. The x-axis represents the employee's eagerness to join the inner group, from low to high. Employees who rank high on the x-axis are typically interested in being part of an inner group close to the manager or the person in charge, try to influence outcomes, or be aware of decisions before they are announced. Managers who rank high on the y-axis are the ones interested in including an employee or a group of employees in that inner circle. One of the strengths of the LMX approach is that if the manager plays a leadership role, he or she becomes a facilitator and a coach who knows how to create a dynamic group exchange while moving employees to the upper right part of the model. In this case, individual knowledge creation becomes an integrated part of organizational knowledge management (Gao et al., 2008). One of the weaknesses of the LMX approach is that it may create uneven distances between the leader and the followers; the leader would not be at equal distance from his or her employees. Nevertheless, leadership has been often described as an organizational quality recognizing that leadership has to flow through networks of people, and would be carried through knowledge sharing (Ogawa and Bossert, 1995). In that regard, knowledge management is considered as a prerequisite for transformational

Vries and Miller, 1984).

formation.

leadership.

For knowledge management to become a competitive edge, it requires a balance between creativity and systems-orientation at the same time. This paradoxical relationship, challenging as it may be, can be managed successfully in the presence of an organizational culture that is conducive to knowledge sharing.

A theoretical model is presented to describe the relationship between business performance and four innovation drivers. The model is then discussed in light of empirical evidence about the correlation between decision-making, intellectual capital, and leadership.

It is also shown that managing internal knowledge systematically is critical to individual and organizational performance provided there is a company culture that encourages and drives participation. Therefore, it is important to reach a culture where employees proactively engage in knowledge sharing, and particularly exchange tacit knowledge, in a selfsustained manner. Processes that are designed for systematic intelligence gathering make it possible to create a balance between innovation and speed in moving in new directions, on one hand, and stable slower-paced movements on the other hand.

In organizations that are not culturally prepared, innovators may be perceived as causing disturbances or discontinuities. In such environments, managers that are often selected on the basis of hierarchy may engage in thwarting the innovators or causing them to flee the organization. If company culture is not ready for knowledge management, the more innovators contribute to radical departures from the status quo, the more they may be subjected to resistance and internal politics. This is where the role of transformational leaders comes in to protect and nurture innovation.

Establishing the culture of a learning organization is driven by transformational leadership behaviors to make deliberate decisions and take actions. An organizational leadership diagnosis could, in this case, be performed with a modified LMX model which would account for group dynamics rather than just inner and outer groups.
