Thursday, August 22, 2019Canada's Leading Online Business Magazine

Building a Strong Culture, Structure and Strategy To Effectively Manage Organizational Knowledge

By Mostafa Sayyadi

Executives today are under a tremendous amount of pressure in today’s global economy. This is due to the technology age and expansion of the easy access to information and knowledge due to the internet and new software expanding communication and expediting tasks more effectively. The drawback is that executives today feel overwhelmed with the amount of ease of technology coupled with twenty-four hour access with the internet technology.

Companies in general confront challenging situations in which they need to proactively respond to every environmental demand. The only thing we know is the organizational change is on the rise.

With the inception of new technology while products become obsolete so quickly today, executives are staid with managing the future that is somewhat evasive. Executives are, therefore, faced with challenging economic conditions today. Herein, leadership is the new competitive advantage and the organizations that embrace it will survive while those that do not will find their organizations facing possible acquisition. Thus, executives must understand that leadership can effectively lead organizational change to successfully implement the projects of knowledge management and, therefore, remain competitive.

Reading all the books on leadership today will cover the gamut of Shakespeare to Geronimo. Not to say that these authors, leaders, and thinkers do not have anything good to say about leadership. It is just that the plethora of leadership literature has sent mixed signals to corporate leaders.

This article, in fact, explores leadership and the core competencies for improving the use of organizational factors. I do this by influencing knowledge management practices in a new and adaptable way. I also indicate that to improve knowledge management effectiveness, leaders, and for the sake of my study Change Leaders, act as change agents who have developed competencies to better deploy organizational culture, structure and strategy. Better use of these organizational factors mediates the relationship between leadership and knowledge management to include aspects that have not been considered by previous studies. I offer a new and unique approach that can be easy adaptable in the workplace

Organizational Knowledge

Leaders play a critical role in developing interactions and relationships needed for creating social capital, social networks, and opportunities for employees to explore new ideas and knowledge. Scholars by the name of Eom, Kahai, and Yayla have found that leaders improve knowledge integration to enhance knowledge sharing. More scholars, such as Liu and Phillips and Lin and Hsiao found that leaders build a climate that inspires followers to share knowledge in a productive and prosperous manner. Thus, I suggest that leaders can positively affect knowledge management and this is how competitive advantage can become a distinctive resource that opens up opportunities while avoiding possible threats such as but not limited to take-overs and acquisitions.

Collaboration

Organizational culture includes three dimensions: collaboration, trust, and learning. Leaders facilitate collaboration to develop relationships in organizations. As Podsakoff, Mackenzie, Moorman and Fetter argue, a leader contributes to the cultural aspect of trust, through considering both employee’s individual interests and company’s essential needs. Also, leaders identify individual needs of their employees and develop a learning culture to generate new knowledge and share it with others. Leaders can, therefore, manipulate a firm’s culture (collaboration, trust and learning) to conform to the needs and expectations of strategic goals and objectives.

Organizational structure can be also reshaped by leaders when they develop knowledge sharing and inspire employees to create new ideas for a better environment among business-units and departments. Jarvenpaa and Staples maintain that informal structure could facilitate new idea generation to build a more innovative climate within organizations.

Leaders are known to implement organizational changes that develop better collaboration among subordinates and managers. Centralized versus decentralized decision making is a topic that leaders must deal with. Scholars found that more emphasis on formalized and mechanistic structures can negatively impact the leader’s ability to exert such changes.

On the contrary, a more decentralized and organic structure may enable leaders to improve departmental and managerial interactions. The mechanical or centralization at the commanding level of leadership impairs the opportunity to develop relationships among managers, business units, and departments. Thus, leaders are top management executives who enhance decentralized and organic structures to develop relationships and interactions within organizations.

Organizational strategy includes four dimensions: analysis, pro-activeness, defensiveness, and futurity. The first aspect, “analysis,” focuses on identifying the best solutions for the organizational problem. Leaders apply this strategy to create more innovative solutions for organizational problems.

The second aspect “pro-activeness” emphasizes the effectiveness of long-term decisions. Leaders employ this kind of strategy to develop a vision of adopting more comprehensive information about the future.

The third aspect, “defensiveness” can also be applied by leaders by taking into account the objectives of strategic implication that seeks to decrease organizational costs and redundancies. While leaders focus on implementing changes, a defensive strategy can be used to modify the current processes to enhance organizational efficiencies.

The fourth aspect, “futurity” incorporates a pro-active strategy that identifies the opportunities that are available but not always addressed in the business, the global environment, and the political regulation changes. This kind of strategy can be also enhanced by leaders as they adopt a strategic posture that inspires employees to identify better opportunities in both the internal and external environment.

Impact of Change

Organizational culture plays a critical role in exploiting organizational knowledge. Collaboration provides a shared understanding about the current issues and problems among employees, which helps to generate new ideas within organizations. Lines, Selart, Espedal, and Johansen establish that trust towards their leader’s decisions is a necessary precursor to create new knowledge.

Moreover, the amount of time spent learning is positively related with the amount of knowledge gained, shared, and implemented. Therefore, leaders can reshape, and in some cases, manipulate organizational culture to create a more effective knowledge cycle within departmental and business units of organizations.

Organizational structure can be reshaped by leaders to be more effective when the command center of organizations can disseminate information in a decentralized and organic way as opposed to the mechanical and centralized command center. Decentralized structures shift the power of decision-making to the lower levels and subsequently inspire organizational members to create new ideas and even implement them while centralized structures may negatively impact interdepartmental communications and inhibit knowledge exchange. Ergo, leaders positively contribute to organizational knowledge management through building more decentralized and organic structures within organizations.

Organizational strategy can be employed by leaders to effectively manage organizational knowledge. For example, an analysis strategy could enhance the knowledge creation process through identifying new opportunities in order to provide better alternatives for managers to make a more effective decision.

Cohen and Sproull have indicated that the analysis strategy is highly associated with a company’s capacity to create new knowledge. In many ways, a proactive strategy could enhance knowledge transfer by developing interactions with both departmental units and the business environment.

When adopting a more futurity type strategy, leaders can enhance the knowledge utilization process, thereby developing guidelines for future pathways and determine future trends in the external environment and allocate their resources accordingly. Leaders can, therefore, exploit organizational knowledge through embracing the four strategic aspects of analysis, pro-activeness, defensiveness, and futurity.

My conclusion is that leadership has a strong association with organizational culture, structure and strategy and these organizational factors have a strong association with the effectiveness of knowledge management. Thus, I feel that organizational culture, structure and strategy can play a mediating role in the relationship between leadership and knowledge management.

Executives can now see how leadership not only can directly support knowledge management, but it can also cultivate a strong culture, structure and strategy, which will enable knowledge management processes within organizations. This is my experience of working with a team of top-level management consultants in the consulting industry.

My experience says that a firm’s ability to enhance knowledge management can be highly affected when executives adopt leadership as the primary form of managing people, resources, and profitability. This article, therefore, adds to a relatively small body of literature and develops our understanding of the direct impact of leadership on knowledge management as well as the indirect contribution of leadership in improving knowledge management through better use of culture, structure and strategy as the primary drivers of firm performance.

This study was designed to find if leaders indirectly influence knowledge management through affecting organizational factors. Further, this article highlighted the significant role of culture, structure and strategy in improving knowledge management and also confirmed the mediating effects of these organizational factors in the relationship between leadership and knowledge management.

In addition, executives can see that if organizational culture, structure and strategy are not completely in favor of supporting knowledge management, organizations cannot effectively implement knowledge management projects and may become obsolete, taken over, or acquired. The key here is that by channeling knowledge management efforts into organizational constructs, engaging in the practice of leadership, and employing a supportive culture, structure and strategy within organizations, that executives will continue to prosper.

Mostafa Sayyadi works with Institute of Management Consultants, Victoria, Australia

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