**6. Organizational thought leadership – A path of transformation**

The learning organization has moved from a concept, written and talked about in the 1980s, to a practical application based mostly on behavioral management theories (Drucker, 1995). Behavioral theories pioneered by Follett (1918) and developed further by other researchers and practitioners are mainly concerned with leadership behaviors, contingencies, and transformation. In order to develop sustainable competitive advantage, one needs to look at knowledge management as a long term transformation rather than just a simple daily

that knowledge management theory has been overly addressed and that real effects start

Clarity in managerial decision-making mechanisms is often credited to hierarchy. This concept started with Max Weber's administrative management theory (Weber, 1947). But clarity in lines of authority should serve another purpose; gravitating towards those who have the most relevant knowledge about the managerial or technical problem at hand. We coin this concept as knowledge-based role distribution. Although seemingly simple, it is not easy to apply. In most organizations, and in most national cultures, personal or prior social relationships, informal networks of friends and family, are a few examples of how appointments are made in many high level positions (McDermott and O'Dell, 2001). These appointments are often followed by exchange of favors. It is believed that such factors exist in many regional or national cultures and several models have been developed to account for power distance and its effect on behaviors in society and in business dealings (Hofstede, 1985). Hofstede (1985) uses five dimensions to describe the extent to which power differentials within society and organizations are accepted. More recent studies established some level of relationship between power distance, societal traditions, and personal value systems and beliefs (Basabe and Ros, 2005). Nevertheless, many studies have shown that the positive role of knowledge-sharing in employee growth and organizational performance transcends national boundaries and societal norms, is driven by globalization trends, and is influenced by a global convergence in the use of quality and business standards (Chalhoub, 2009). We propose that, for multinational organizations, knowledge creation and sharing be the prerequisite for business performance, while we maintain that these other relational factors – local societal traditions and national cultures – would certainly be important

The role of culture becomes even more important in fostering the use of objective and factual decision-making processes. It becomes a matter of culture and conviction to let problem-solving gravitate toward those best equipped with relevant knowledge (Hatch and Schultz, 1997). It is culture that presents knowledgeable people as an opportunity to the business owner or senior manager, and not as a threat. This approach provides access to different realms of ideas, different groups of people, and offers different opportunities for utilizing resources for the competitiveness of the firm. It was argued that culture makes a great difference as to how knowledge management initiatives evolve within the organization ranging on a spectrum of a simple repository of information all the way to a highly collaborative system among employees and across organizational boundaries

The learning organization has moved from a concept, written and talked about in the 1980s, to a practical application based mostly on behavioral management theories (Drucker, 1995). Behavioral theories pioneered by Follett (1918) and developed further by other researchers and practitioners are mainly concerned with leadership behaviors, contingencies, and transformation. In order to develop sustainable competitive advantage, one needs to look at knowledge management as a long term transformation rather than just a simple daily

when those ideas are put to practice (Anantatmula and Kanungo, 2010).

**5. Role of culture in managerial decision-making** 

including e-communities of practice (Leidner et al., 2006).

**6. Organizational thought leadership – A path of transformation** 

checkpoints.

process. Designing and driving the knowledge management process in daily operations becomes part of a larger, strategic transformational program that can be amended and improved. Compare and contrast this concept to the Ford model mostly based on scientific management theory, on efficiency, and on applying process rules with little departure from the status quo (Taylor, 1911 ; Ford and Crowther, 1922). Scientific management surely has its advantages in terms of cost avoidance, risk minimization, reaching business targets quantitatively, and predictability of the final product. But it may be misused within the organization to a point where it stifles creativity. Further, processes and company policies could be used sometimes by those who do not encourage change, or who have reached a comfort zone, or those who have managerial power and do not wish to relinquish it.

This leads us to the second framework related to transformational leadership in the organization. The basic hypothesis that we test is that companies that approach knowledge management from a transformational leadership perspective are better positioned to innovate and launch new products successfully than the ones that do not.

Leadership behaviors result in very specific capabilities that are not easy to translate into a physical or codified form. The first reason is that such leadership capabilities require tacit knowledge. Tacit knowledge is demonstrated only in its direct use and application as opposed to representing it through media such as company intranet, e-mail, or technical reports. The second reason is that knowledge management is based on people (Drucker, 1999). Practically, you will always find a gap between what people actually do on the job to excel in fulfilling their roles, and what is documented in company manuals – if at all.

Performance Innovation Through Applied

**7. Conclusion and recommendations** 

culture that is conducive to knowledge sharing.

Knowledge Management: Thought Leadership in Organizations 107

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

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

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

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

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

Adva, D. (2011), "Tacit Knowledge Taxonomy and Transfer: Case-Based Research," Journal

Ahuja, I. P. S., (2011) "Managing Research and Development for Core Competence Building

Anantatmula, V. S. & Kanungo, S. (2010), "Modeling Enablers for Successful KM Implementation," Journal of Knowledge Management, 14(1), pp. 100-113. Basabe, N., Ros, M., (2005), "Cultural Dimensions and Social Behavior Correlates:

Brand, A. (1998) "Knowledge Management and Innovation at 3M", Journal of Knowledge

Chalhoub, M.S., (1997) "Knowledge: The Timeless Asset that Drives Individual Decision-

in an Organization," Journal of Technology Management & Innovation, March

Individualism-Collectivism and Power Distance," Revue Internationale de

Making and Organizational Performance," Journal of Knowledge Management,

about the correlation between decision-making, intellectual capital, and leadership.

one hand, and stable slower-paced movements on the other hand.

account for group dynamics rather than just inner and outer groups.

of Behavioral and Applied Management, May 2011.

Psychologie Sociale, Vol. 18, No. 1, pp. 189-225.

Management, Vol. 2, Issue 1, pp.17 – 22.

leaders comes in to protect and nurture innovation.

2011, Vol. 6, No. 1, pp. 58-65.

Cap Gemini, Cambridge.

**8. References** 

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 Vries and Miller, 1984).

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 formation.

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 leadership.
