Knowledge leadership to improve project and organizational performance

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Knowledge leadership to improve project and organizational performance

Li-Ren Yang

a,

, Chung-Fah Huang

b

, Ting-Jui Hsu

a

aDepartment of Business Administration, Tamkang University, New Taipei City, Taiwan

bDepartment of Civil Engineering, National Kaohsiung University of Applied Sciences, Kaohsiung, 807, Taiwan

Received 30 August 2012; received in revised form 16 January 2013; accepted 22 January 2013

Abstract

Conceptualizing knowledge leadership and customer knowledge management (CKM) in the project context is still rudimentary. Thus, the

first

objective of this study is to assess the associations among knowledge leadership, customer knowledge management, the performance of a precision

instrument sales (PIS) project, and organizational performance. The second objective is to determine whether project performance may mediate the

effect of customer knowledge management on organizational performance. The third objective is to examine the moderating role of data

complexity in the relationship between customer knowledge management and project performance. This study empirically investigated a sample of

precision instrument sales projects in Taiwanese high-tech industry. The

findings indicate that adoption of knowledge leadership is associated with

customer knowledge management. In addition, these analyses suggest that implementation of customer knowledge management influences

organizational performance via project performance. The results also show that the positive relationship between customer knowledge management

and project performance depends on data complexity.

© 2013 Elsevier Ltd. APM and IPMA. All rights reserved.

Keywords: Knowledge leadership; Customer knowledge management; Data complexity; Project performance; Organizational performance

1 . Introduction

Understanding customers and their needs is important.

Many companies attempt to align its processes and products

to develop stronger customer relationships. Although some of

the companies have knowledge of their customers, most of the

knowledge exists in fragmented form. In addition, it is difficult

to share the knowledge with the organization because it is

usually incomplete. Thus, customer knowledge management

(CKM) is becoming an important strategic issue. Customer

knowledge concerns not only understanding the customer's

viewpoints, but also collection of information and insight that a

company needs to have to build greater customer relationships.

The role of customer knowledge management is to acquire and

organize the data and allows them to be shared and applied

throughout the organization. A company needs to develop

processes and systems to gather comprehensive data and

information about the customers.

Leaders have a significant position of influence within their

organizations. Knowledge leadership has increasingly been

recognized as an essential element for organizations to enhance

customer knowledge management. While many studies have

promoted knowledge leadership and CKM as a means to

enhance organizational performance, conceptualizing

knowl-edge leadership and CKM in the project context is still

rudimentary. Previous studies have not examined the role of

project leaders in knowledge management, and their effect on

project and organizational performance. Thus, developing such

support will illustrate the benefits of knowledge leadership and

CKM adoption. The analysis of this study also shows the

relationship between CKM and project performance for

different levels of data complexity.

The analyses of knowledge leadership and CKM and

relationships with project and organizational performance are

based on an industry-wide survey performed between December

2011 and April 2012. A data collection tool was developed to

⁎ Corresponding author. Tel.: +886 2 26215656; fax: +886 2 26209742. E-mail address:iry@mail.tku.edu.tw(L.-R. Yang).

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http://dx.doi.org/10.1016/j.ijproman.2013.01.011

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assess knowledge leadership and CKM levels on precision

instrument sales (PIS) projects in the Taiwanese high-tech

industry, yielding 216 project responses. The data analyzed in

this study are project-specific, meaning the data are

represen-tative of the levels of knowledge leadership and CKM used in

projects.

2. Conceptual framework and research hypotheses

Knowledge is the appropriate collection of information, such

that its intent is to be useful (

Ackoff, 1989

). It pertains to

information given meaning and integrated with other contents

of understanding (

Bates, 2005

).

Davenport and Prusak (1998)

defined knowledge as

“a fluid mix of framed experience,

contextual information, values and expert insight that provides

a framework for evaluating and incorporating new experiences

and information.” The knowledge management literature has

shown that knowledge management plays an important role in

the performance of organizations (

Alavi and Leidner, 2001;

Cameron, 2004; Sabherwal and Becerra-Fernandez, 2003;

Srisa-ard, 2006; Zack, 1999

).

In recent years, companies have integrated their customer

relationship management (CRM) and knowledge management

(KM) efforts because they realize that KM plays a key role in

CRM success (

Garrido-Moreno and Padilla-Meléndez, 2011

).

The relationship between CRM and KM is an important issue

(

Campbell, 2003; Shi and Yip, 2007; Stefanou et al., 2003

). Such

is the synergy potential of both concepts that have emerged

theoretical models from the integration of both concepts: the

models of customer KM (

Gebert et al., 2003; Morgan, 2007

).

Customer knowledge refers to structured information about

customers (

Campbell, 2003; Li and Calantone, 1998

), knowledge

about customers (

Rowley, 2002, 2004

), and knowledge from

customers (

Garcia-Murillo and Annabi, 2002; Gibbert et al.,

2002

). Customer knowledge has increasingly been recognized

within marketing as a significant resource that can be managed to

support research and development and to improve innovation

(

Gibbert et al., 2002

). It can facilitate sensing of emerging market

opportunities and support the management of long-term customer

relationships (

Darroch and McNaughton, 2003

). Managing

knowledge residing in customers requires collaborating with

customers (

Garrido-Moreno and Padilla-Meléndez, 2011

).

Gibbert

et al. (2002)

have compared the knowledge from customers and the

knowledge about the customers in order to receive an integrated

outlook for the knowledge transfer. Customer knowledge

management means creating a valuable leverage and direct

interaction with the customers (

Dimitrova et al., 2009

). The

main challenge for the development of CKM is to catch these

customers' perceptions which are innovative for the

enterprise's business future (

Dimitrova et al., 2009

).

The role of leaders in managing knowledge is important to

organizations (

Crawford, 2005; Davenport et al., 1998; Sarabia,

2007; Singh, 2008

). However, knowledge management as a key

leader function has not been explored (

Bell De Tienne et al.,

2004

). Many researchers have emphasized the lack of leadership

support for the failure of many knowledge management projects

(

Lakshman, 2007

). Thus, the potential for integrating the

leadership literature with information and knowledge

manage-ment literature is likely to be beneficial for both theory and

practice (

Bryant, 2003

). In addition, although

Mintzberg (1973)

identified the informational role of top managers, previous

studies have not focused on the management of knowledge as key

leadership roles (

Bell De Tienne et al., 2004; Bryant, 2003;

Lakshman, 2005; Politis, 2001; Viitala, 2004

). For the early

attempts on the role of leadership in knowledge management,

Fleishman et al. (1991)

focused on the information search and

acquisition, and information use in problem solving behaviors of

leaders.

Day and Lord (1988)

identified the building of

information systems as a key leader activity leading to improved

organizational performance. However, a review of the literature

suggests that systematic research on the role of leaders in

information and knowledge management is lacking (

Lakshman,

2007

).

Four approaches to the examination of leadership have

evolved over the past several decades: the trait approach, the

behavior approach, the contingency approach, and the

transfor-mational and charismatic approach (

Yukl, 1998

). Although some

of the approaches addressed the role of leaders in information and

knowledge management (

Cleveland, 1985; Lakshman, 2007;

Vroom and Jago, 1988

), previous studies did not stress the

knowledge management aspects of leadership. The trait approach

focused on leaders' traits, such as their physical appearance and

personalities. It identified business knowledge as an essential

quality of effective leaders (

Kirkpatrick and Locke, 1991

).

From another point of view, the behavioral and contingency

approaches suggested that leader behavior should involve

information search and acquisition and information use which

are critical to performance (

Fleishman et al., 1991

). In addition,

Vroom and Jago (1988)

contended that information and

knowledge requirements of situations are key contingencies

that influence leader behavior. The behavior of the leaders in

facilitating the existence and availability of required information

and knowledge can have a positive effect on organizational

effectiveness (

Lakshman, 2007

). For the charismatic approach,

information acquisition and analysis is critical to the development

of vision in organizations (

Kotter, 1990

).

In order for companies to succeed in business, knowledge

leadership and knowledge management capabilities are two of

the important components that companies must possess (

Earl and

Scott, 1999; Liebowitz, 2000; Saint-Onge, 1999

). Companies

worldwide have responded by creating or re-evaluating their

knowledge leadership development programs and knowledge

management initiatives (

Davenport and Prusak, 1998; Malhotra,

2000

). Knowledge leadership is an essential element for

organizations (

Brown and Duguid, 2000

). It is an important

business development activity (

KPMG, 2000

). The role of

knowledge leadership is to promote a positive cultural orientation

toward knowledge acquisition and knowledge sharing; one that

values continuous learning, where experience, expertise, and

innovation supersede hierarchy (

Davenport et al., 1998

). Human

resource executives are frequently the best candidates for

knowledge leadership positions within organizations (

Bukowitz

and Williams, 1999; Horibe, 1999; Koulopoulos and Frappaolo,

1999

). They are typically technologically advanced, having

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selected and implemented sophisticated human resource

information systems focused on aligning their organizations'

human, cultural, and structural capital with its business goals

(

Roberts-Witt, 2001

). Thus, knowledge leaders should possess

a broad range of interpersonal and organizational development

skills and need to enable cultural change, build relationship,

and facilitate knowledge transfer (

Ali and Yusof, 2006

).

Knowledge management has been promoted as a means to

enhance organizational performance. While the focus of

management is often on business issues, leadership tends to

concentrate more on people issues (

Bass, 1990

). When

organizations are viewed as learning systems, the manager's

role can be viewed as one of providing leadership in the learning

process (

Carlsson et al., 1979

). The roles of leaders in a learning

organization have been specified as being coaches, facilitators,

teachers, leaders of learning, and developers (

Macneil, 2001

). In

contrast to knowledge management, knowledge leadership refers

to constant development and innovation of information

re-sources, individual skills, and knowledge and learning networks

(

Skyrme, 2000

). Knowledge leadership is defined as a process

whereby an individual supports other group members in learning

processes needed to attain group or organizational goals

(

Stogdill, 1974

). On the other hand, customer knowledge

management means creating a valuable leverage and direct

interaction with the customers (

Dimitrova et al., 2009

). It is

defined as the acquisition and use of customer-related knowledge

to create value for the organization.

Cleveland (1985)

highlighted

the importance of the role of leadership in managing knowledge.

The study suggested that the use of teams and communities of

people is important for leaders in managing information and

knowledge. Prior research has also indicated that knowledge

leadership plays an important role in CKM (

Bukowitz and

Williams, 1999; Davenport et al., 1998; Horibe, 1999;

Koulopoulos and Frappaolo, 1999; Roberts-Witt, 2001

). The

literature on knowledge management has essentially described a

new context in which modern leaders operate (

Viitala, 2004

).

Knowledge leadership may help develop mechanisms for

accountability and control, as well as for customer knowledge

sharing. In addition, effective knowledge leadership may support

efficient customer knowledge integration, sharing, and

manage-ment. A knowledge leader is the catalyst for a knowledge-sharing

culture, owner of the infrastructure specifications that facilitate

customer knowledge transfer and storage, and maintainer of the

closed-loop learning system (

Rasmus, 2000

).

The study measured three knowledge leadership dimensions

identified in the literature as being potentially relevant to customer

knowledge management: leadership skills, cooperation and trust,

and knowledge integration and innovation. Leadership is the

ability to influence groups for purposes of goal accomplishment

(

Koontz and Weihrich, 1990

). The literature emphasized

devel-oping leadership skills that are required for most jobs or particular

occupations or job roles (

Delamare Le Deist and Winterton,

2005

). Many conceptions of leadership skill include knowledge

alongside attitudes, behaviors, work habits, and personal

charac-teristics (

Green, 1999

). Leadership skills are considered important

in being able to increase knowledge sharing among subordinates.

Prior research indicated that leadership skills may enhance levels

of knowledge management, as well as mutual influence, more

open and honest communication, and greater access to resources

(

Gerstner and Day, 1997

). On the other hand, cooperation and

trust plays a critical role in team operations (

Solomom, 2001

).

Cooperation and trust may result in uniformity of team members

and make the team more effective. In previous research, team

collaboration and trust is a highly influential factor in knowledge

acquisition, sharing, and application (

Gladstein, 1984

). Effective

knowledge management may derive from successful collaboration

and trust between team members (

Kotlarsky and Oshri, 2005

).

Finally, knowledge integration and innovation has been shown to

play an important role in knowledge management. In previous

research, knowledge integration was found to be associated with

a critical determinant of successful knowledge management

(

Davenport and Prusak, 1998

). It facilitates knowledge sharing

and application among team members. In addition, team

members' learning behavior and innovative ability are important

to create new knowledge and ideas (

Davenport et al., 1998

). Thus,

effective knowledge management requires effective knowledge

integration and innovation to support it. The literature supports

knowledge leadership adoption as a means to enhance CKM

activities. Additionally, knowledge leadership application may

positively relate to customer knowledge management. This study

extends previous research by addressing the effects of knowledge

leadership use on customer knowledge management of projects.

Based on the relevant literature, this study develops the following

research hypothesis:

H1. Knowledge leadership adoption positively influences

project levels of customer knowledge management.

Project performance is defined as the achievement of some

pre-determined project goals (

Lim and Mohamed, 1999

). On the

other hand, according to

Richard et al. (2009)

, organizational

performance comprises the actual output or results of an

organization as measured against its intended outputs (or goals

and objectives). Achieving the organization's long-term ultimate

objective (e.g., profits) will depend on the degree to which its

organizational performance is reached (

Katou and Budhwar,

2007

). Organizational performance is a multifaceted concept,

which is usually indicated by indices such as: 1) effectiveness: if

the organization meets its objectives, 2) efficiency: if the

organization uses the fewest possible resources to meet its

objectives, 3) development: if the organization is developing

in its capacity to meet future opportunities and challenges,

4) satisfaction: of all participants; stakeholders, employees,

and customers, 5) innovation: for products and processes, and

6) quality: percent of products of high quality (

Katou and

Budhwar, 2007

). In this study, organizational performance was

measured with six items that required respondents to indicate the

extent to which the company had improved its sales knowledge

and useful ideas, new market and product opportunities, cost

efficiencies, cost reduction, awareness of the firm's other

products, and sales and customer use of the firm's other products.

These items represent organizational performance at the efficiency,

development, and innovation levels. Organizational performance

is a multifaceted concept. Although the success of one project may

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influence on organizational performance. Thus, the positive

relationship suggests that

H4

is supported. However, the results

of this research further prove that project performance fully

mediates the effects of customer knowledge management on

organizational performance, which supports

H5

. The findings

indicate that implementation of customer knowledge

manage-ment influences organizational performance via project

perfor-mance, which is one of the main contributions of this research.

This result also confirms the suggestion in literature that

mediators may exist between knowledge management practices

and final examined outcomes (

Chen et al., 2005; Schmidt and

Calantone, 1998; Tatikonda and Montoya-Weiss, 2001

).

In this study, knowledge leadership was measured by the

three dimensions of leadership skills, cooperation and trust, and

knowledge integration and innovation. The research findings

imply that cooperation and trust may not contribute significantly

to customer knowledge management. The results are not in

agreement with previous studies, which indicated that trust

stimulates the team members' learning behavior and allows one

member to understand skills or knowledge of one another (

Cross

and Baird, 2000; Davenport and Prusak, 1998

). The prior

research suggested that cooperation and trust may improve

customer knowledge sharing. However, based on the analysis

results, leadership skills and knowledge integration and

innova-tion are more closely associated with overall customer

knowledge management than is cooperation and trust. This

may be the reason why cooperation and trust does not contribute

significantly to customer knowledge management. In addition,

customer knowledge management was measured by the four

dimensions of knowledge acquisition, knowledge storage,

knowledge sharing, and knowledge application. The research

results show that knowledge acquisition and knowledge storage

may not contribute significantly to project performance, which

are not in line with previous research (

Vandaie, 2008

). Similarly,

knowledge sharing and knowledge application are more closely

associated with overall project performance than are knowledge

acquisition and knowledge storage. This may explain why

knowledge acquisition and knowledge storage do not contribute

significantly to project performance.

Because project success factors are not universal for all

types of projects, several studies have identified critical success

factors in certain fields or domains. For example, for

construction projects, weather conditions can be considered as

a critical factor for completing the project on time (

Belassi and

Tukel, 1996

). On the other hand, for product development

projects, the project life span and its cost are critical factors for

the immediate release of a product to the market (

Belassi and

Tukel, 1996

). While certain factors exist in one domain, they

may not be applicable to other fields. Thus,

Dvir et al. (1998)

argued that different projects exhibit different sets of success

factors, suggesting the need for a more contingent approach in

project management theory and practice.

According to the data analysis results, the influence of

customer knowledge storage on project delivery performance

increases in projects with a high level of data complexity, due

to the moderating effect of data complexity (

H6

is supported).

In other words, the influence of customer knowledge storage on

project delivery performance, for projects with a higher level of

data complexity, is more than the same effect in the case of

projects with a lower level of data complexity. It is also clear

that projects with a high level of data complexity are more

likely to be successful in training and education performance

when they experience a high level of knowledge sharing than

projects with a low level of data complexity. Projects with a

high level of data complexity may involve more complicated

tasks, uncertainty, and high risk. This type of project usually

involves diverse and complex information and knowledge. It is

not easy to manage the knowledge for projects with high

complexity and uncertainty. However, knowledge storage and

sharing is important to incorporate all the key knowledge and to

integrate the complicated tasks which are influential on project

performance. In addition, knowledge storage and sharing may

produce associations that create bridges between entities within a

project. It is also a key to team communication and an essential

element for integrating knowledge from different sources. These

may be the reasons why knowledge storage and sharing is more

closely associated with project performance for projects with a

high level of data complexity. On the other hand, projects with a

low level of data complexity are more likely to be successful in

delivery performance when they experience formal methods for

knowledge acquisition than projects with a high level of data

complexity. It is easier to improve project delivery performance

with formal knowledge acquisition approach for projects with a

low level of data complexity.

This study has clear implications for knowledge leadership

adoption. With respect to leadership skills, project managers

need to understand the importance of customer knowledge

acquisition and practice what they preach. They should try to

gain new knowledge to set an example to the others and

develop excellent knowledge leadership skills. For knowledge

integration and innovation, project managers must take action

to enhance team members' innovative ability and develop a

reward system to stimulate team members' learning behavior.

More importantly, project managers should integrate practical

experience from different departments to create new knowledge

and lead team members to execute innovative ideas.

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