Organizational knowledgeleadership

An empirical examination of knowledgemanagement by top executive leaders

Chandrashekhar LakshmanKondhwa, Pune, India

Abstract

Purpose – Knowledge management as a key top executive function has not been sufficientlyexplored in the leadership literature. This study seeks to examine the role of top executives inknowledge management by first building theoretical hypotheses and subsequently testing them.Hypotheses are developed through the integration of the knowledge management and leadershipliteratures and tested using CEO interviews published in Harvard Business Review.

Design/methodology/approach – Using the method of structured content analysis developed byJauch et al., this study uses these HBR interviews and develops questionnaire instruments throughwhich data are collected from respondents in a structured fashion. This innovative method involvesthe distribution of these published interviews with top executives of organizations (such as CEOs) tomultiple groups of respondents, who then carefully read the interviews and responded to thestructured questions developed for the purpose of assessing the relevant constructs in the study. Suchstructured content analysis allows for both the assessment of inter-rater reliability and testing thetheoretical relationships identified in the theory-building stage.

Findings – The major hypotheses, relating cause-effect beliefs held by the CEOs and their knowledgemanagement practices to performance measures and leadership perceptions, were supported.

Research limitations/implications – The CEOs included in the study were not randomly chosenbut chosen from a set of interviews (acquired) from a published source. The use of acquired interviewsmay also be the reason for not finding stronger relationships across the variables being examined here.

Practical implications – The paper has studied the importance of information acquisition,information use, and more generally information and knowledge management as key leader functionsor behaviors. Overall, the findings and the framework used here point to the importance of the role ofleaders (top executives) in information and knowledge management.

Originality/value – This is a seminal investigation of knowledge leadership by top executives. Suchwork has not existed in the literature to date, except in the qualitative mode.

Keywords Leadership, Senior management, Knowledge management

Paper type Research paper

The long tradition of leadership theory and research has only recently begun toaddress the role of leadership in knowledge management, despite its importance toorganizations in the information age. Consequently, with very few exceptions (e.g.Berson et al., 2006; Lakshman, 2007; Viitala, 2004) information and knowledgemanagement as key leader functions have not been systematically explored untilrecently (see also Bryant, 2003; Politis, 2001). Lord and Maher (1991) suggested that thedesign and building of management information systems is one way in which leadersat the top of the organization have an impact on organizational performance (see also

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Received May 2008Revised September 2008Accepted October 2008

Leadership & OrganizationDevelopment JournalVol. 30 No. 4, 2009pp. 338-364q Emerald Group Publishing Limited0143-7739DOI 10.1108/01437730910961676

Day and Lord, 1988). Fleishman et al. (1991) identified information search andstructuring, and information use in problem solving as two of the four super ordinatedimensions of leader behavior in organizations. However, only recently haveresearchers identified the role of leaders at multiple levels in the various organizationallearning processes (e.g. Berson et al., 2006) and the role of leaders in the processes ofmanaging knowledge in organizations (e.g. Lakshman, 2007). This study provides akey contribution to the leadership and knowledge management literatures by buildingon such efforts.

Recent developments in the organizational knowledge literature (e.g. Grant, 1996)stress the importance of knowledge management to building a sustainable competitiveadvantage (see for, e.g. Bogner and Bansal, 2007) and to the importance of leadershipfor the success of information and knowledge management projects. More specifically,the growing information systems literature on information and knowledgemanagement has repeatedly stressed the lack of leadership support for the failure ofmany knowledge management projects (e.g. Davenport et al., 1998). Moreover, thisliterature stresses the importance of leadership for the success of information andknowledge management projects. Thus, the potential for integrating the leadershipliterature with information and knowledge management literature is great, from thepoint of view of identifying relevant leadership roles in knowledge management. Suchan effort is likely to be beneficial for both theory and practice, and thereby to make akey contribution to our knowledge of leadership. This study is an attempt at suchintegration of the said literatures.

Although some of the early attempts in the literature on the functions of topmanagers have identified and emphasized the importance of the informational role oftop managers (Mintzberg, 1973), and the importance of information to creating a vision(Kotter, 1990), these attempts have not focused on a systematic examination of themanagement of information or the management of knowledge as key leadership roles.Later work on leadership (e.g. Day and Lord, 1988) suggests that one of the mostimportant roles of executive leadership is in achieving organizational performancethrough the design, building and management of information systems. More recently,researchers have addressed knowledge leadership at the micro level by focusing onleader behaviors and styles vis-a-vis subordinates (e.g. Politis, 2001; Viitala, 2004). Thisstudy makes a contribution at the macro (organizational) level (e.g. Lakshman, 2007,2008) by building on this work and suggesting that information and knowledgemanagement is a critical executive leadership role that can have a significant impact ontheir organizations.

The specific objectives of this study are twofold. First, this study builds a theory ofthe role of leadership in information and knowledge management through a review ofthe leadership, and knowledge management literatures. Second, this study tests thehypothesis developed using CEO interviews published in the Harvard Business Reviewover a period of more than a decade. Using the method of structured content analysisdeveloped by Jauch et al. (1980), this study uses these HBR interviews and developsquestionnaire instruments through which data are collected from respondents in astructured fashion. This innovative method involves the distribution of thesepublished interviews with top executives of organizations (such as CEOs) to multiplegroups of respondents, who then carefully read the interviews and responded to thestructured questions developed for the purpose of assessing the relevant constructs in

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the study. Such structured content analysis allows for the assessment of bothinter-rater reliability and testing the theoretical relationships identified in the theorybuilding stage. The independent variables are knowledge in the form of cause-effectbeliefs, knowledge management processes, and customer focused knowledgemanagement processes. The dependent variables are leadership perceptions andorganizational performance.

The dominant organizational behavior approach to leadership theory has focusedon the individual, dyadic and small group level of analysis as noted by Waldman andYammarino (1999) (see also Day and Lord, 1988; Lord and Maher, 1991). Thus, with theprobable exception of charismatic theories, leadership at the top managerial level inorganizations has not been systematically examined. Day and Lord (1988) argue thatthe theoretical frameworks used at the lower levels (e.g. Viitala, 2004) are notnecessarily applicable at the executive level in the organization (Lakshman, 2007,2008). Day and Lord (1988) point to the qualitatively different nature of leadership atthe executive level from that at other lower levels in the organization, and suggest thatapplying leadership theories developed at lower levels to explain upper-levelleadership assumes a construct isomorphism across levels that is probably not true.This study throws light on this critical issue of top executive leadership by empiricallyexamining their role in knowledge management. By examining the role played by topexecutives in managing knowledge in organizations, this study aims to identify someof the means through which top executives have an impact on organizationalperformance. The study also examines the processes through which top executivesmanage information and knowledge and their subsequent impact on organizationalperformance and leadership perceptions.

This paper is organized as follows. The literatures in the knowledge managementand leadership areas are briefly reviewed first. This literature review is used as thebasis for developing a theory of the role of leaders in information and knowledgemanagement and developing hypotheses to be tested. The hypotheses are then testedusing a number of CEO interviews (37) published in Harvard Business Review over aperiod starting from 1989 to 2000. The method used is based on a structured contentanalysis technique developed by Jauch et al. (1980), that involves the use of structuredquestionnaires which multiple respondents complete based on a careful reading of theinterviews. The carefully designed questionnaire is a part of the structured contentanalysis that requires assessment of the concepts identified in the theory buildingstage. The questionnaires permit the evaluation of both reliability and validity that isusually not available from other content analysis techniques. The results of thereliability analyses and regression analyses conducted are then reported. Finally, adiscussion of the results is provided and the contributions of this study are detailedalong with limitations and directions for future research.

Literature reviewA review of the leadership literature suggests that the management of information andknowledge are important leader functions. The various approaches to the study ofleadership imply that information and knowledge management and knowledgepossessed by leaders are important for organizational performance accomplishment.The trait approach to leadership suggests that knowledge possessed by leaders is animportant component of leadership (e.g. Kirkpatrick and Locke, 1991). The behavioral

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and contingency approaches to the study of leadership suggest that information searchand acquisition, and information use (Fleishman et al., 1991) are core dimensions ofleader behavior that have an impact on performance. Moreover, information andknowledge requirements of situations are also key contingencies that impact leaderbehavior (e.g. Vroom and Jago, 1988). The behavior of the leaders in facilitating theexistence and availability of required information and knowledge through suchprocesses as knowledge management can have a significant impact on organizationaleffectiveness. The charismatic approach (e.g. Conger, 1991) implies that informationacquisition and analysis is important for the development of vision in organizations(e.g. Kotter, 1990).

Only recently have researchers begun to focus on the links between leadership andeither knowledge management (Lakshman, 2007) or organizational learning processes(Berson et al., 2006). Whereas organizational learning focuses on a strategic renewalprocess of change in thought and action embedded in and affected by the institutions ofthe organization (Berson et al., 2006), knowledge management focuses on the creation,sharing, leveraging, and dissemination of knowledge throughout the organization(Grant, 1996). However, there are a number of similarities among the 4I framework oforganizational learning (Berson et al., 2006) and the spiraling process through whichknowledge is created, shared, leveraged, and disseminated (Nonaka and Takeuchi,1995), discussed in the knowledge management literature. Although these literaturesare related and have parallels, this study builds on the base of the knowledgemanagement literature more so than the organizational learning literature.

For the purposes of this study, following Berson and colleagues (2006), leadership isdefined as a process of influencing others to understand why and how certain activitiesand goals need to be accomplished. Such leadership constitutes a process of facilitatingindividual, group, and organizational efforts to learn, manage knowledge, andaccomplish shared goals in organizations. Using this definition, this study builds onthe growing attention to knowledge leadership in the form of:

. importance of leadership to effective knowledge management (Bell De Tienneet al., 2004);

. differing impacts of transactional and transformational leadership on knowledgemanagement (e.g. Bryant, 2003) and organizational learning (Vera and Crossan,2004);

. linking leadership to organizational learning processes (Berson et al., 2006);

. leadership styles (Politis, 2001) and micro-level knowledge leadership (Viitala,2004); and

. processes through which knowledge management practices are instituted by topexecutives (Lakshman, 2007, 2008).

The unique contribution of this study is that it provides empirical evidence oforganizational knowledge leadership and its effectiveness that is hitherto not availablein the literature.

Knowledge managementDrawing from resource-based theories of the firm and knowledge-based theories of thefirm (e.g. Grant, 1996) the knowledge management literature has documented the

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importance of the management of information and knowledge to the effectiveperformance of organizations (see, for example, Bogner and Bansal, 2007; Davenportet al., 1998; Hedlund, 1994; Zack, 1999) and has also identified a number of conditionsunder which knowledge management can be successful in terms of its organizationalimpact. The knowledge-based theory of the firm argues that organizations can achievea competitive advantage by the processes of creating knowledge (Nonaka andTakeuchi, 1995; Sabherwal and Becerra-Fernandez, 2003) and through the processes ofintegrating organizational knowledge through coordination mechanisms. Grant’s(1996) knowledge-based theory of the firm explicitly focuses on the coordinationmechanisms through which firms integrate the specialist knowledge of their membersthrough appropriate organizational designs.

Drawing on the organizational learning, organizational memory and relatedliteratures (e.g. Huber, 1991; Walsh and Ungson, 1991), the knowledge managementliterature extends the core concepts, by discussing the location of knowledge vis-a-visinformation in a semiotic framework (Ramaprasad and Ambrose, 1999), and focusingon both the acquisition and distribution/sharing of knowledge and information inorganizations through both sociocognitive and technological routes (Hansen et al.,1999). Using the framework of semiotic levels, Ramaprasad and Ambrose (1999) drawa systematic connection between stimuli, data, information, and knowledge, withknowledge occupying the highest semiotic level. Knowledge, according to dictionaries,is the accumulation and understanding of facts, ideas, principles or skills. Knowledgehas also been referred to in terms of a set of beliefs about causal relationships betweenactions and their probable consequences (see Alavi and Leidner, 2001; Nonaka, 1991,1994; Saffady, 2000; Thompson, 1967). According to the semiotic framework proposedby Ramaprasad and Ambrose (1999), knowledge is information that has been placed inits context and thus has been formatted to make sense. Knowledge management can beseen as the process through which data and information are converted to knowledgeand subsequently disseminated throughout the organization.

For the purposes of this study, knowledge management is conceptualized as theoverall set of processes that are put in place for the purpose of identifying sources ofrelevant data and information in organizations, the eventual conversion of these dataand information to knowledge, and their subsequent dissemination to different pointsin the organization where they are needed (Alavi and Leidner, 2001).

Components of knowledge managementAs identified by Hansen et al. (1999), at a minimum, knowledge management can beoperationalized through the existence of social and technological networks. The use ofa team based organizational design, with extensive use of cross-functional andcross-divisional teams indicates the presence of the social component of theorganization-wide knowledge network (Grant, 1996). In addition, the development ofstrategic alliances for the purpose of learning, developing forums of interaction withdifferent groups of constituents, job rotation and personnel transfers, ongoing trainingand development efforts, sharing knowledge through written documents, are otherindicators of the social component of knowledge management in organizations (seeInkpen and Dinur, 1998 for evidence of the presence of all these indicators in jointventures for knowledge acquisition purposes).

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Extensive use of e-mail networks, the use of information systems, and knowledgemanagement systems are key components of the technological knowledge networkthat are instrumental in organizational knowledge management.

Customer-focused knowledge managementIn addition to the social and technological components of knowledge managementwithin organizations described above, for the purpose of coordination, the knowledgemanagement literature also indicates that organizations manage the process throughwhich they acquire, and organize knowledge from outside the organization (e.g. fromcustomers) and disseminate such knowledge and information within the organization(e.g. Lakshman and Parente, 2008; Teigland and Wasko, 2003). These and otherresearchers (e.g. Zack, 1999) suggest that the processes that are set up for the specificenhancement of the data and information obtained from various entities in theenvironment such as customers (and/or suppliers) constitute a key component ofknowledge management. Some researchers label theses processes as customer-focusedknowledge management (e.g. Lakshman, 2007). Customer-focused knowledgemanagement can manifest itself in such practices as locating employees on the shopfloor of customer organizations (e.g. Magretta, 1998), key executives spending asignificant amount of time with their customers (e.g. Tichy and Ram Charan, 1990),obtaining information from customers through electronic networks and informationsystems (e.g. Howard, 1990), and through the use of knowledge management systemswithin organizations that are focused especially on customers (e.g. Rifkin, 1996),among others such as customer meets and conferences (Magretta, 1998). All of thesepractices and other similar ones can serve as vital sources of accurate information andknowledge that is of use to the focal organization, and can be termed customer-focusedknowledge management. Moreover, the concept of customer-focused knowledgemanagement is similar to the construct of market orientation in the marketingliterature (e.g. Kohli and Jaworski, 1990), which provides evidence of the positiveimpact of such orientation on the part of organizational executives on performance.

The knowledge management literature (e.g. Grant, 1996; Nonaka, 1994) and theorganizational knowledge literature (e.g. Osterloh and Frey, 2000) have repeatedlystressed the importance of knowledge and knowledge management for an organizationto build a competitive advantage. The positive impact of knowledge management onorganizations has been supported by empirical evidence in a number of studies (e.g.Armstrong and Sambamurthy, 1999; Hansen et al., 1999; Lakshman and Parente, 2008;Zack, 1999).

The role of leadership in knowledge managementThe taxonomic approach to the classification of leader behavioral dimensions(Fleishman et al., 1991) clearly emphasizes the dimensions of information acquisitionand structuring, and use of information in problem solving as super ordinatedimensions of leader behavior. Moreover, given the importance of knowledgemanagement to organizations implied by the knowledge-based theory of the firm, therole of upper-level leaders in organization-wide knowledge management becomes evenmore significant.

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Day and Lord (1988) and Lord and Maher (1991) built a theoretical framework thatspecifies the three means through which leaders make an impact on organizationalperformance. These three means are:

(1) leader actions that are internally directed and attempt to increase efficiency orproduct quality;

(2) leader actions that affect an organization’s adaptation to external environments;and

(3) actions that change the nature of external environments.

These researchers argue that a basic requirement of executive leaders is to managethese exchanges through both internal and external actions. This perspective of leaderactions directed towards internal and external targets includes such things as thedesign and implementation of management information systems in organizations.More recently, using a grounded theory approach, Lakshman (2007) identified anddelineated the role of leaders in knowledge management. Lakshman (2007) suggeststhat the leader’s role in knowledge management starts with the leader’s own realizationof the importance of knowledge management to the performance of the organization.Lakshman (2007) further suggested that this realization of the importance ofknowledge management needs to manifest itself along two dimensions, one internaland the other external. Internally, the leader’s realization of the importance ofknowledge management is instrumental in the leader’s establishment of bothtechnological and sociocognitive routes for managing knowledge in theirorganizations. Externally, the leader’s realization of the importance ofcustomer-focused knowledge management is instrumental in the leader’sestablishment of both technological and sociocognitive routes for managing suchknowledge. This grounded theory study (Lakshman, 2007) forms much of the basis ofthe hypotheses developed next. Other researchers have focused on knowledgeleadership at micro levels (Viitala, 2004) and the role of leaders in guiding both theexploration and exploitation processes of organizational learning (Berson et al., 2006).

HypothesesIn a review and reinterpretation of the CEO succession literature, Day and Lord (1988)found that the relationship between a change in the CEO and organizationalperformance was higher when leaders’ ability was included in the models. Pointing toresearch that has found a more positive impact of leadership on performance whenleader ability is included in the regression model, they argue that leader ability is one ofthe more important variables that impacts organizational performance. The knowledgepossessed by leaders in the form of cause-effect beliefs can form a key component ofthis ability.

Based on the organizational and strategic management literature, Lord and Maher(1991), in the context of their model of leadership and information processing, suggestthat the cognitive structures of executives can provide a basis for strategic decisionmaking. They argue that these cognitive structures provide the CEOs with the“metastrategies” for strategic decision making and that these can be thought of as the“implicit theories” of top executives. Knowledge in the form of cause-effect beliefs, assuggested by the knowledge management literature is very similar to the notion ofimplicit theories of leaders discussed by Lord and Maher (1991).

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Although the work of Burns (1978) is commonly associated with the field oftransformational leadership (e.g. Bass, 1990), addressing the topic of executiveleadership and decision making, Burns has emphasized the crucial importance ofleaders’ understanding of past and future decisions and their consequences forachieving organizational objectives. Burns’ work suggests that leaders need to possessknowledge in the form of cause effect beliefs and that they need to learn from both thepast and the present in the continuous formation and refining of their “implicittheories.” Burns (1978) also suggests that the ambiguity surrounding executivedecisions and their uncertain acceptability on the part of subordinate executivesnecessitates that executives have clarity and evidence for their belief structures forthese to be effectively understood and accepted by others in organizations. Thompson(1967) refers to this aspect of cause-effect beliefs using a dimension that ranges fromincomplete to complete, thereby implying that the completeness of cause-effect beliefsand the clarity with which these are held hold important consequences for attainingorganizational effectiveness. Thompson suggests that the stability of executives’beliefs is likely to be important in obtaining acceptance and consensus that are crucialfor implementation of key decisions. Group pressures on executive beliefs have verylittle impact on the stability of those beliefs when the individual has empiricalconfirmation for them readily at hand. When such empirical anchorage is lacking, thestability of those beliefs is also lacking due to group pressures. In the context of thetrait approach to leadership which suggests that self-confidence on the part of leadersis of crucial importance to effectiveness, Lakshman (2007) suggested that confidenceand clarity or firmness in the beliefs held by executive leaders is likely to be veryimportant for organizations to achieve effectiveness, through the implementation ofdecisions that follow from the cause-effect beliefs. Thus, the possession of a clear set ofcause effect beliefs by the leader is likely to be related to the performance of theorganization. This is formally stated as a hypothesis as follows.

H1. The extent to which chief executive officers possess knowledge in the form ofclear cause-effect beliefs is positively related to the effectiveness of theirorganizations.

Both the leadership and knowledge management literatures point to the importance ofknowledge management and its role in achieving organizational objectives. Further,such management of information and knowledge can be accomplished through twobroad routes viz., socio-cognitive, and technological. The knowledge based theory ofthe firm and some empirical evidence from the information systems literature onknowledge management systems suggests that knowledge management can providean organization with a competitive advantage. The socio-cognitive route to knowledgemanagement identified in the literature includes the extensive use of teams, face-to-faceinteraction of decision makers throughout the organization, the use of meetings,conferences, taskforces and committees, and through such processes as internalbenchmarking, among others. The use of teams, committees, taskforces, meetings andconferences etc., can be seen as part of the overall socio-cognitive network thataccomplishes knowledge management (see Lakshman, 2007 for a detailed list ofoperational indicators). Technological networks, including information systems,knowledge management systems etc., form the other broad route to managinginformation and knowledge in organizations. Thus, it follows that leaders’ use of

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knowledge management networks, both sociocognitive and technological, will have asignificant impact on organizational effectiveness. This is formally stated as ahypothesis as follows.

H2. The extent to which chief executive officers manage information andknowledge is positively related to organizational effectiveness.

Day and Lord’s (1988) framework suggests that leaders use both internally directedand externally directed actions in leading their organizations to effectiveness.Although Day and Lord (1988) did not specify or conceptualize information orknowledge management on the part of leaders in their externally directed actions, theknowledge management literature (Alavi and Leidner, 2001) points to the possibility ofsystematically managing knowledge vis-a-vis customers, which has been identifiedhere as customer-focused knowledge management (see also Lakshman and Parente,2008; Teigland and Wasko, 2003). Such knowledge can be managed through severalmeans identified in the literature such as setting up technological networks facilitatingthe sharing of information between customers and the focal organization and throughsocial networks such as customer meets, executives and other organizational membersspending time with customers, locating employees on the premises of customers etc.The role of leadership in establishing processes that enhance customer focusedknowledge management, which is of interest in this study, involves explicitly realizingthe role of knowledge management in enhancing customer focus, actually establishingprocesses that enhance customer focused knowledge management, and moreimportantly, personal participation of the leader in such effort (see Lakshman, 2007).Such a process of knowledge management focused specifically on customers canprovide organizations with a competitive advantage. This is formally stated as ahypothesis as follows.

H3. The extent to which chief executive officers establish processes of customerfocused knowledge management is positively related to organizationaleffectiveness.

Leadership perceptionsLord and Maher’s (1991) model of leadership and information processing rests onfollower and subordinate perceptions of executives as leaders. Their very definition ofleaders is based on the extent to which executives are perceived as leaders. Usingexamples of CEOs from different companies, and empirical studies, these researchersestablish the importance of follower perceptions of leaders as an important componentof leadership. Research on leadership perceptions has a long history, starting from thework of Hollander and Julian (1969), which suggests that leaders in groups emerge onthe basis of acceptance and positive perceptions on the part of other group members(see also Hollander, 1974). These researchers suggest that early in the tenure of leadersin organizations, follower perceptions are very important in gaining their acceptability.Moreover, executives in formal positions can gain legitimation and power from suchacceptance by followers (Hollander, 1974). Lord and Maher (1991) argue that beingperceived as a leader affects social and self-evaluations, creates or limits future jobopportunities, and enhances the ability of top leaders to garner the resources needed bytheir organizations.

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Lord and Maher (1991) suggest that traits and behaviors, and events and outcomesconstitute the key data that form the basis of follower perceptions of leadership.Consistent with this study’s focus on knowledge, and knowledge management, it issuggested here that beliefs (cause-effect) are sources of data that are used as the basisfor forming leadership perceptions. The trait literature on leadership does suggest thatleaders with business knowledge are more effective. The work of Burns (1978) andThompson (1967) on cause-effect beliefs suggests that when leaders’ cause-effectbeliefs are clear, firm, and stable, they are perceived positively and not subject topressure by followers and subordinate executives and outside observers. Thus, topexecutives who possess a clear set of cause effect beliefs are more likely to be perceivedas leaders than others who do not possess a clear set of cause-effect beliefs. This isformally stated as a hypothesis as follows

H4. The extent to which chief executive officers possess a clear and reasonable setof cause effect beliefs is positively related to leadership perceptions.

Top executives engaging in the establishment, building, and functioning of knowledgenetworks are more likely to be perceived as leaders, and more positively than otherswho are not engaged in such activities. The latter would especially be true of the peopleapproach to building knowledge management networks through the use of teams atmultiple levels in the organizations, among other things. Following from Lord andMaher’s (1991) suggestion that those traits and behaviors that lead to positiveorganizational outcomes are likely to be perceived positively, and, from the recognizedimpact of knowledge management on firm performance and competitive advantage, itcan be reasoned that perceivers will see these behaviors as those that lead to positiveorganizational outcomes. Moreover, leaders using knowledge management behaviorsand actions are likely to facilitate the availability of information and knowledgethrough such mechanisms as internal benchmarking and socio-cognitive networks.These facilitate fast decision making and enable organizations to adapt to theircompetitive environments (Eisenhardt, 1989), which can also be seen by followers,subordinate executives, and outside observers as leading to positive organizationaloutcomes. Thus, leaders’ use of knowledge management networks will be positivelyrelated to leadership perceptions. This is formally stated as a hypothesis as follows.

H5. The extent to which chief executive officers manage information andknowledge is positively related to leadership perceptions.

MethodThe hypotheses developed from the literature review were tested using an innovativestructured content analysis approach developed by Jauch et al. (1980). This structuredcontent analysis was performed on 37 published interviews with top executives oforganizations, such as CEOs (all published in the Harvard Business Review). All of theCEOs interviewed were heading MNCs from around the world, yielding a globalsample. Structured content analysis involves the use of a content analysis schedule,which consists of a structured questionnaire that respondents answer based oninformation in cases. Although Jauch et al. (1980) described the technique to be used oncases, it has been applied here to published executive interviews. The responses ofthese executives were assessed systematically along theoretical construct dimensionsand the relationships between them were tested along the lines suggested by Jauch et al.

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(1980). The major advantage of using a structured questionnaire (content analysisschedule) is the ability to assess reliability and validity of the constructs, in terms ofnot only inter-rater agreement but also Cronbach’s internal consistency coefficient. Byusing multiple raters and multiple interviews, we provide both inter-rater reliabilityand internal consistency coefficients for the constructs used in the study, in addition toa factor analysis. Because these interviews are available to the public, such researchcan be replicated using similar or different questionnaire schedules to test theoreticalvariations. Thus, the innovative method of structured content analysis possesses anumber of advantages such as allowing for testing reliability and facilitatingreplication.

All interviews with CEOs in the Harvard Business Review since 1989 were used inthis study, subject to the selection criteria listed below. Several criteria were used inselecting the studies to be included in the study. They are as follows:

. the interview must have been with the CEO or some other top official with broadorganizational responsibilities, and not someone with functional responsibilitiessuch as the CFO or CIO;

. the interview with the CEO or other top official must pertain to the CEO’s tenureat one organization and should not be about his/her general experience withmany companies; and

. the interview must address broad organizational concerns including knowledgeand information management and should not be focused exclusively on the CEOor exclusively on one or few functions within the organizations.

Based on these criteria, several interviews were not included in the study. Table Iprovides a list of all the CEO interviews included in the study.

Use of interviews as data sourcesFinding measures of the constructs to be examined in this study is a difficultproposition because of limited access to CEOs of corporations and the resourceconstraints involved in such study. Jauch et al. (1980) argue that published cases(interviews in this case) provide a wealth of data that provides a unique opportunity tocreative researchers to longitudinally examine issues of interest. The use of materialpublished by companies such as annual letters to stockholders (e.g. Bettman andWeitz, 1983; Osborne et al., 2001) and acquired interviews such as the ones used in thisstudy has been fairly common in the investigation of issues in executive and politicalleadership (see Hermann and Milburn, 1977). Despite impression managementlimitations of such sources several authors have argued that they are subject togovernment regulations and hence valuable sources of information (e.g. Osborne et al.,2001; Winter and Stewart, 1977). Winter and Stewart (1977) provide a set of criteria foruse in the systematic study of leadership issues, as listed below for help in performingsuch research in a systematic and scientific fashion. The criteria suggested by theseresearchers include, representativeness of the verbal output of the sample, cleardefinition of the categories or constructs to be assessed from the interview content toensure that independent judgments are similar, assessment of theory-based constructs,comparability with other actors (executives in this case), and standardized contentsamples to ensure comparability of sources of content. All of these criteria have beensatisfied by developing careful selection criteria for the interviews used, developing

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Wil

liam

Tay

lor

Mar

ch-A

pri

l19

9111

Lee

P.

Bro

wn

Com

mis

sion

erof

Pol

ice

New

Yor

kC

ity

Pol

ice

Dep

artm

ent

Ala

nW

ebb

erM

ay-J

un

e19

91

12C

arl

Hah

nC

EO

Vol

ksw

agen

Ber

nar

dA

vis

hai

July

-Au

gu

st19

9113

Rob

ert

F.

McD

erm

ott

CE

OU

SA

AT

hom

asT

eal

Sep

tem

ber

-Oct

ober

1991

14A

rnol

dH

iatt

Ch

airm

anS

trid

eR

ite

Nan

Sto

ne

Mar

ch-A

pri

l19

9215

Ard

enC

.S

ims

CE

OG

lob

eM

etal

lurg

ical

Inc.

Bru

ceR

ayn

erM

ay-J

un

e19

9216

Ph

ilK

nig

ht

CE

ON

ike

Ger

ald

ine

E.

Wil

lig

anJu

ly-A

ug

ust

1992

17P

aul

All

aire

CE

OX

erox

Rob

ert

How

ard

Sep

tem

ber

-Oct

ober

1992

18T

omC

hap

man

CE

OG

reat

erS

outh

east

Com

mu

nit

yH

osp

ital

Nan

cyA

.N

ich

ols

Nov

emb

er-D

ecem

ber

1992

19N

icol

asH

ayek

CE

OS

MH

Wil

liam

Tay

lor

Mar

ch-A

pri

l19

9320

Ern

esto

Mar

ten

sC

EO

Vit

roN

ancy

A.

Nic

hol

sS

epte

mb

er-O

ctob

er19

93

(con

tinued

)

Table I.Names and positions of

executives included in thestudy

Organizationalknowledgeleadership

349

Nam

e(s)

ofin

terv

iew

ee(s

)P

osit

ion

inor

gan

izat

ion

Com

pan

yre

pre

sen

ted

Nam

e(s)

ofin

terv

iew

er(s

)D

ate

ofp

ub

lica

tion

inH

BR

21E

dw

ard

McC

rack

enC

EO

Sil

icon

Gra

ph

ics

Ste

ven

E.

Pro

kes

chN

ovem

ber

-Dec

emb

er19

9322

Dav

idW

hit

wam

CE

OW

hir

lpoo

lR

egin

aF

azio

Mar

uca

Mar

ch-A

pri

l19

9423

P.

Roy

Vag

elos

CE

OM

erck

Nan

cyA

.N

ich

ols

Nov

emb

er-D

ecem

ber

1994

24L

awre

nce

Bos

sid

yC

EO

All

ied

Sig

nal

Noe

lT

ich

yan

dR

amC

har

anM

arch

-Ap

ril

1995

25Jo

hn

Saw

hil

lC

EO

Nat

ure

Con

serv

ancy

Ali

ceH

owar

dan

dJo

anM

agre

tta

Sep

tem

ber

-Oct

ober

1995

26S

irC

olin

Mar

shal

lC

hai

rman

and

CE

OB

riti

shA

irw

ays

Ste

ven

E.

Pro

kes

chN

ovem

ber

-Dec

emb

er19

9527

Rob

ert

Sh

apir

oC

EO

Mon

san

toJo

anM

agre

tta

Jan

uar

y-F

ebru

ary

1997

28Jo

hn

Bro

wn

eC

EO

Bri

tish

Pet

role

um

Ste

ven

E.

Pro

kes

chS

epte

mb

er-O

ctob

er19

9729

Kri

ster

Ah

lstr

omC

EO

Ah

lstr

omJo

anM

agre

tta

Jan

uar

y-F

ebru

ary

1998

30M

ich

ael

Del

lC

EO

Del

lC

omp

ute

rsJo

anM

agre

tta

Mar

ch-A

pri

l19

9831

Fra

nco

Ber

nab

eC

EO

En

iL

ind

aH

ill

and

Su

zyW

etla

ufe

rJu

ly-A

ug

ust

1998

32V

icto

rF

un

gC

EO

Li

&F

un

gJo

anM

agre

tta

Sep

tem

ber

-Oct

ober

1998

33R

oger

San

tan

dD

enn

isB

akk

eC

hai

rman

and

CE

Ore

spec

tiv

ely

AE

SS

uzy

Wet

lau

fer

Jan

uar

y-F

ebru

ary

1999

34Ja

cqu

esN

asse

rC

EO

For

dS

uzy

Wet

lau

fer

Mar

ch-A

pri

l19

9935

Geo

rge

Con

rad

esC

EO

Ak

amai

Tec

hn

olog

ies

Nic

hol

asG

.C

arr

May

-Ju

ne

2000

36A

nd

yL

awC

EO

St.

Lu

ke’

sC

omm

un

icat

ion

sD

ian

eL

.C

outu

Sep

tem

ber

-Oct

ober

2000

37M

ich

ael

Eis

ner

CE

OD

isn

eyS

uzy

Wet

lau

fer

Jan

uar

y-F

ebru

ary

2000

Table I.

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constructs from the literature and linking them to theory, using multiple respondentgroups (such as undergraduate students and graduate students, and using astandardized source for interviews (viz., Harvard Business Review).

Variable measures and respondentsA detailed questionnaire developed for this study was given to respondents along witha photocopy of the interview. All of the scales used in the study have been newlydeveloped because such scales are not available in either the leadership or theknowledge management literature. The questionnaires contain questions that assessconstructs pertaining to the cause-effect beliefs held by the CEOs, the nature anddegree of knowledge management activities established by the CEOs, the nature anddegree of customer focused knowledge management activities established by theCEOs, and leadership perception ratings. The respondents were requested to carefullyread the interview and then respond to the scales provided. The graduate studentrespondents were paid for their participation, and the undergraduate respondentsreceived points towards their course grades.

All of the questionnaire items required responses on a five-point scale ranging fromstrongly disagree to strongly agree (see Table II for questionnaire items, factorloadings and scale reliabilities). The first set of nine items (a ¼ 0:78) assessed theclarity of cause-effect beliefs held by the CEOs. Sixteen items (a ¼ 0:83) assessed thenature and degree of knowledge management processes established by the CEO. Nineitems (a ¼ 0:82) assessed the nature and degree of customer focused knowledgemanagement processes established by the CEO. A six-item scale (a ¼ 0:90) wasprovided, on which respondents provided leadership perception ratings of the CEOs.

Dependent variables such as the average return on equity (ROE), average return onassets (ROA), earnings per share (EPS), and the return on sales (NIOS) were alsoindependently obtained. The financial measures of performance were obtained fromMoody’s industry manuals and from Moody’s international manuals. These measuresof performance were obtained for up to five years from the time of the interview,subject to availability. This is consistent with the suggestion of leadership researchersto use time lags (see Day and Lord, 1988).

Two groups of respondents were used in the structured content analysis. Twograduate students at a Midwestern university, and undergraduate students at twouniversities were used as the respondents.

Undergraduate students registered in two large sections of an introductorymanagement course at a Midwestern university (274 students) were given theseinterviews to be read and rated. In addition, undergraduate students from two courses(one marketing research course, and one strategic management course) at aSoutheastern university (69 students) were also given the interviews and providedanother set of responses. The second set of undergraduate students, at theSoutheastern University, were in classes that were of a longer duration than those atthe other university (1 hour and 15 mins. versus 50 mins.). Thus, each interview wasrated by approximately six or seven undergraduate students at the MidwesternUniversity and by two to three undergraduate students at the Southeastern University.

In addition, as is typical in content analysis studies, two doctoral students providedindependent responses to all the interviews included in the study. Thus the final set ofusable responses consisted of 407 responses from the different rater groups.

Organizationalknowledgeleadership

351

CE KM CKM LP

a 0.78 0.83 0.82 0.90

Scale A: cause-effect beliefs1. The CEO has clear beliefs about what works in

the organization 0.7042. The CEO has clear beliefs about what does not

work in the organization 0.5433. The CEO has a clear understanding of why

things that work actually work 0.6434. The CEO has a clear understanding of why

things that don’t work are not working 0.6045. The CEO has clear knowledge of the factors that

lead to organizational effectiveness 0.6436. The CEO has clear knowledge of the factors that

lead to effective leadership 0.6927. The CEO has clear knowledge of the factors that

impact good decision making 0.6818. The CEO has a good understanding of the factors

that influence employee productivity 0.5839. The CEO has a good understanding of the factors

that influence the meeting of customer needs 0.417

Scale B: knowledge management1. This CEO uses teams and committees to share

information with people throughout theorganization 0.612

2. This CEO uses task forces to share informationand knowledge to make key decisions 0.581

3. This CEO manages information and knowledgethrough the use of training and development 0.549

4. This CEO manages knowledge by transferringbest practices within the organization 0.551

5. This CEO manages knowledge by transferringknowledgeable people to positions where theyare needed 0.421

6. This CEO uses information/communicationtechnology in managing information andknowledge by sharing it with people in theorganization 0.590

7. This CEO uses strategic alliances to acquireknowledge 0.367

8. This CEO modifies the organizational structureto better manage information and knowledge 0.450

9. This CEO uses written documents to shareinformation throughout the organization 0.342

10. The CEO and other top executives travel to meetand interact with people to share information andknowledge in the organization 0.417

11. This CEO organizes meetings/conferences toshare information and knowledge throughout theorganization 0.635

12. The CEO has put processes in place to facilitatesharing of information throughout theorganization 0.699

(continued )

Table II.Questionnaire (principalcomponents analysisresults)

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CE KM CKM LP

13. The information-sharing processes establishedby the CEO are ongoing and continuous 0.667

14. The CEO actively manages information andknowledge in the organization 0.580

15. The CEO participates in the processes thatfacilitate the sharing of information throughoutthe organization 0.662

16. The CEO implements various knowledge-sharingactivities in the organization 0.666

Scale C: customer-focused knowledge management1. This CEO uses employees with good customer

knowledge in key organizational positions 0.5582. This CEO modifies the organizational structure

to obtain and share information about customerneeds 0.559

3. The CEO and other top executives travel to meetand interact with customers to obtaininformation about their needs 0.484

4. This CEO uses information/communicationtechnology to share and manage informationwith customers 0.675

5. The CEO has put processes in place to increasethe flow of information from customers to theorganization 0.762

6. The CEO has put in place processes that enhancethe distribution of information obtained fromcustomers to the relevant points in theorganization 0.710

7. The CEO participates in the process of obtainingand distributing information from customers 0.693

8. The processes of obtaining information from thecustomers are ongoing and continuous 0.722

9. The processes of distributing customerinformation within the organization are ongoingand continuous 0.710

Scale D: leadership perceptions1. This CEO provides good leadership to his

organization 0.8502. This CEO’s behaviors provide leadership to the

organization 0.8783. This CEO’s actions provide leadership to the

organization 0.8914. This CEO’s approach to leadership should be

followed in other companies 0.6535. The values held by this CEO provide leadership

to the organization 0.8306. This CEO has the appropriate leadership

attitudes 0.832Eigen value 3.436 5.027 3.903 4.094Proportion of variance explained (%) 38.18 31.42 43.37 68.23 Table II.

Organizationalknowledgeleadership

353

ResultsTable III presents the reliability coefficients for each of the scales used in the study,within each of the subsamples and in the overall sample. As shown in Table III, thereliability coefficients for all of the scales used in the study provide a reasonable degreeof confidence of the internal consistency and the reliability of the scales. Further, as canbe seen from the appendix, each of the scales and its items seem to provide areasonable factor structure when subjected to a principal components analysis with norotation. Each set of items load clearly on their own factor with no cross-loadings onother factors. The Eigen values and the proportion of variance explained by the factorsare also at satisfactory levels.

Inter-rater correlationsAn evaluation of the correlations across respondent types on each of the scales wasperformed. Tables IV-VI present the correlations across respondent types for each ofthe scales measuring cause-effect beliefs (CE), knowledge management (KM), andcustomer-focused knowledge management (CKM) respectively. The broad pattern ofcorrelations in these three tables suggests that there is a reasonable degree ofconvergence across measures on two of the three scales being examined here, with thecause-effect beliefs variables showing less than desirable convergence across raters(Fiske and Campbell, 1959). This may be because the assessment of the clarity of

CE UG2 CE UG1

CE UG2

CE UG1 0.35 *

CE grd 0.16 0.22

Note: *p , 0.05, * *p , 0.01

Table IV.Correlations acrossrespondent types forcause-effect beliefs

Scale UG1a UG2b Grads Overall

n 69 274 64 407Cause-effect beliefs 0.78 0.76 0.85 0.78Knowledge management 0.80 0.76 0.94 0.83Customer-focused knowledge management 0.83 0.77 0.94 0.82Leadership perceptions 0.86 0.88 0.96 0.90

Notes: a UG1 refers to the Southeastern University undergraduate student group; and b UG2 refers tothe other undergraduate group

Table III.Coefficient alphareliabilities of scaleswithin sub samples andoverall

KM UG2 KM UG1

KM UG2

KM UG1 0.50 * *

KM grd 0.42 * 0.55 * *

Note: *p , 0.05, * *p , 0.01

Table V.Correlations acrossrespondent types forknowledge management

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354

cause-effect beliefs is likely to be difficult and may vary from person to persondepending on a number of individual factors such as knowledge, personal cause-effectbeliefs etc. The scale correlations across raters for the other two scales (Tables V-VI)indicate that all of the correlations are significant at either the 0.05 level or better (0.01),with three of the six correlations being significant at the 0.01 level. Thus, theseinter-rater correlations show sufficient degrees of convergence across raters. Inaddition to these inter-rater correlations, inter-rater agreement percentages werecalculated, as suggested in the leadership content analysis literature (Insch et al., 1997).As shown in Table VII, there is an acceptable level of inter-rater agreement on allscales across all respondent groups, providing reasonable degree of confidence in theuse of the data in hypothesis testing. The agreement percentages within the graduatestudent group for two of the scales (viz., knowledge management, andcustomer-focused knowledge management) are slightly below the norm and providesome concern in the use of these data in hypothesis testing. However, since they arefairly close to the norm of 0.7 suggested by Insch et al. (1997), the data from these threegroups were aggregated for the purpose of testing the hypotheses. Additionally agroup of 16 faculty members at the Southeastern University also read and rated oneinterview each. Their ratings had acceptable levels of agreement with the two groupsof undergraduate students and the graduate student group respectively. For thecause-effect beliefs scale, the agreement percentages of the faculty group with the threestudent groups were 0.96, 0.96, and 0.96 respectively. For the knowledge managementscale, the agreement percentages were 0.97, 0.97, and 0.97 respectively. The agreementpercentages for the customer-focused knowledge management scale were 0.97, 0.98,and 0.97 respectively, with the agreements being at 0.93, 0.94, and 0.96 respectively forthe leadership perceptions scale. Thus, this reliability check with faculty membersyielded satisfactory results.

Tests of hypothesesThe means, standard deviations, and correlations of the independent and dependentvariables are shown in Table VIII. The table shows strong correlations betweencause-effect beliefs, knowledge management, and leadership perceptions. The tablealso shows some significant correlations between the independent variables and some

UG1 UG2 Grd

Cause-effect beliefs 0.91 0.85 0.83Knowledge management 0.87 0.81 0.65Customer-focused knowledge management 0.84 0.80 0.69

Table VII.Inter-rater agreement

percentages

CKM UG2 CKM UG1

CKM UG2

CKM UG1 0.40 *

CKM grd 0.49 * * 0.43 *

Note: *p , 0.05, * *p , 0.01

Table VI.Correlations across

respondent types forcustomer-focused

knowledge management

Organizationalknowledgeleadership

355

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Table VIII.Means, standarddeviations, andcorrelations

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356

of the measures of organizational performance. Cause-effect beliefs, aggregated acrossall respondents, grouped by individual CEO is correlated at a level of 0.46 (p , 0:05)with return on equity measure of performance. The Knowledge management measure,aggregated across respondent types, grouped by CEO, is correlated at a level of 0.43(p , 0:05) with the per share earnings measure of effectiveness.

Regression analysesSeveral regressions were performed using SPSS to examine the impact of the threeindependent variables on multiple measures of organizational performance and onleadership perceptions. Table IX presents the results of the regressions in theaggregated sample, providing the regression coefficients for each of the dependentvariables, the proportion of variance explained, and the significance levels. Theindependent variables were regressed on the average return on equity (ROE), averagereturn on assets (ROA), earnings per share (EPS), the return on sales (NIOS), andleadership perceptions (LP).

As shown in Table IX, the regression model is significant for three of the dependentvariables in the analysis, viz., return on equity, earnings per share, and leadershipperceptions. Return on Equity: The set of three independent variables are significantlyrelated to return on equity, as shown in Table IX (R 2 ¼ 0:23). Moreover, thecause-effect beliefs of the top executives are positively and significantly related to thereturn on equity measure of organizational performance. This provides some supportfor H1 that relates the cause-effect beliefs of top executives with the effectiveness oftheir organizations.

Earnings per shareThe set of independent variables are significantly related to the earnings per sharemeasure of organizational effectiveness, with a significant proportion of the varianceexplained (R 2 ¼ 0.39), and two of the variables being significantly related to thedependent variable. Knowledge management is positively and significantly related tothe earnings per share measure of organizational performance. However,customer-focused knowledge management is related negatively to the earnings pershare measure of organizational performance. Thus, this regression provides somesupport for H2 that relates the degree to which top executives manage knowledge andthe performance of their organizations, but fails to support H3 relatingcustomer-focused knowledge management positively to organizational performance.

ROE ROA EPS NIOS LP

Cause-effect beliefs 0.48 * * 0.14 0.14 20.17 0.48 * * *

Knowledge management 20.10 0.02 0.54 * * * 0.42 * 0.37 * * *

Customer-focusedknowledge management 0.13 20.02 20.47 * * 20.36 –Model

R 2 0.23 * 0.02 0.39 * * * 0.14 0.61 * * * *

(3, 23) (3, 22) (3, 20) (3, 24) (2, 29)p , 0:10 , 0:92 , 0:01 , 0:28 , 0:00

Notes: * p , 0.10; * * p , 0.05; * * * p , 0.01; * * * * p , 0.001

Table IX.Regression of

independent variables ondependent variables

(overall sample)

Organizationalknowledgeleadership

357

Leadership perceptionsThe set of two dependent variables, viz., cause-effect beliefs and knowledgemanagement are significantly positively related to the dependent variable ofleadership perceptions (R 2 ¼ 0:61). Each independent variable (cause-effect beliefs andknowledge management) is also related significantly to the leadership perceptions ofthe respondents. These results provide strong support for both H4 and H5.

Thus, the overall sample provides some support for the relationship betweencause-effect beliefs and organizational effectiveness (H1), some support for therelationship between knowledge management and organizational effectiveness (H2),and strong support for the relationships between the two independent variables ofcause-effect beliefs and knowledge management with perceptions of leadership (H4and H5). However, Table IX suggests that customer-focused knowledgemanagement may not be related to organizational effectiveness in the predictedmanner. Table IX does provide broad support for four of the five hypotheses of thestudy.

The results of the regression, however, do not support H3, which predicts a positiverelationship between customer-focused knowledge management processes establishedby the CEO and organizational effectiveness. Instead, there seems to be a negativerelationship of customer-focused knowledge management with some of the measuresof performance.

Regression of independent variables on perceptions of leadershipIn addition to testing the relationships between leadership perceptions and the twoindependent variables of cause-effect beliefs and knowledge management, H4 and H5were also tested by not grouping the responses by CEO. In this second approach,instead of aggregating the responses across respondents, the total number of 407responses were used as the basis for the regression. A regression performed this wayprovides the results of the relationship between perceptions of cause-effect beliefs, andperceptions of knowledge management, in terms of their impact on leadershipperceptions, without relating them to specific CEOs. The results of the regression fromthis second approach are presented in Table X.

The results in Table X strongly support both H4 and H5, with both the regressionmodel and the individual relationships being significant. These results suggest thatperceptions of cause-effect beliefs held by CEOs and the knowledge managementprocesses established by them are related to leadership perceptions of respondents.These results thus provide support and lend validity to the role of leadership inknowledge management, an aspect of leadership that has been under-addressed in theliterature. However, the study is not without its limitations.

R 2 Beta t Sig.

0.34 *

CE 0.459 10.348 * 0.000KM 0.206 4.641 * 0.000

Note: * p , 0.001

Table X.Regression ofindependent variables onleadership perceptions(not grouped by CEO)

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358

Discussion and conclusionThis study has developed a theory of the role of leaders in managing information andknowledge, based on a review of the leadership and knowledge managementliteratures. Building on Lord and Maher’s (1991) framework and using relevantinsights from Fleishman et al. (1991), it was argued that information and knowledgemanagement is an important role of leaders, especially at the top levels oforganizations. Specific hypotheses were developed based on both literatures and thehypotheses were tested using interviews with CEOs of 37 organizations, all of whichwere published in the Harvard Business Review. The method of structured contentanalysis developed by Jauch et al. (1980) was used to collect data and test thehypotheses developed in the study. Based on this method, structured questionnaireswere developed to be used in the data collection. Three groups of respondents read theCEO interviews and provided responses on the variables examined in the study. Thevariables of clarity of cause-effect beliefs possessed by the CEOs, knowledgemanagement processes established by the CEOs in their organizations, andcustomer-focused knowledge management processes established by the CEOs wereexamined in terms of their relationship to perceptions of leadership and organizationaleffectiveness.

The reliability analyses of the scales used in the study indicated that all of the scalespossessed high internal consistency coefficients, providing reasonable degree ofconfidence in the measures obtained. In addition, inter-rater reliability was establishedbased on an assessment of the inter-rater correlations and through the measurement ofinter-rater agreement, both of which yielded acceptable levels of reliability.

The results of the regression analyses generally supported the hypotheses tested inthe study, with the exception of customer-focused knowledge management, which wassignificantly related to organizational effectiveness, but in a direction opposite to thatpredicted by H3. The other four hypotheses were supported with moderate to stronglevels of significance. The knowledge management variable was significantly relatedto one objective measure of performance (EPS). Thus, although the results providesupport for H2, better measures of organizational effectiveness need to be used to testthis relationship in future research. However, the results do provide an indication of thepredictive capability of knowledge management processes initiated by CEOs inorganizations. The support for this hypothesis makes a contribution to leadershipresearch by revealing the important role of top executive leaders in managinginformation and knowledge in organizations. This set of findings related to knowledgemanagement extends the theoretical work of Lakshman (2007) that identified theimportance of organizational knowledge leadership behaviors by top executives. Thus,the establishment of knowledge management processes using teams of people,knowledge transfer practices, information technology, and strategic alliances havebeen found to be significant in terms of their impact on organizational performance.

Surprisingly, the study finds a negative relationship between customer-focusedknowledge management and organizational effectiveness as measured by earnings pershare and net income over sales. Excessive customer focused knowledge managementcould play negatively on the minds of investors who would like more attention given tothem rather than that which accrues through better customer focus. Also, suchcustomer focused knowledge management could be more expensive thereby reducingthe margin over sales. This could be one potential explanation for these surprising

Organizationalknowledgeleadership

359

findings. The concept of market orientation, in the marketing literature, which issimilar to customer-focused knowledge management, has been known to impactorganizational performance (Kohli and Jaworski, 1990). Thus, more careful researchneeds to reexamine this relationship to determine the actual reasons for this surprisingfinding.

Despite some of the above-mentioned problems, the positive findings forcause-effect beliefs and knowledge management processes in terms of their impacton certain measures of organizational effectiveness is promising. When this isconsidered in combination with the strong findings related to the impact of thesevariables on leadership perceptions, this study establishes the importance of these notonly for organizational performance but also for favorable perceptions of leadership.Several researchers argue for the importance of favorable perceptions for people inpositions of leadership to be effective in acquiring resources and getting thecommitment and acceptance for key decisions (e.g. Hollander, 1974: Lord and Maher,1991). The strong support for the hypotheses relating to perceptions are reinforced bythe support for the hypotheses relating cause-effect beliefs and knowledgemanagement processes to organizational effectiveness. This may indicate that leaderknowledge in the form of cause-effect beliefs and leader establishment of knowledgemanagement processes may be related to organizational performance through theprocess of favorable perceptions by key constituents in organizations. This mechanismneeds to be examined directly by using organizational executives and employees asrespondents, by examining their perceptions of the CEOs cause-effect beliefs andknowledge management processes established by the CEOs. Thus, this study points tosignificant opportunities for future research examining the mechanisms that determineperceptions of leadership of top executives in organizations.

Despite the valuable contributions made by this study, there are some limitationsthat need to be discussed. The CEOs included in the study were not randomly chosenand chosen from a set of interviews (acquired) from a published source. The use ofacquired interviews may also be the reason for not finding stronger relationshipsacross the variables being examined here. Thus, future research using directinterviews with CEOs for the specific purpose of examining the key variables outlinedin this study could lead to better results. In terms of measures, the acquired interviewslead to one other limitation with the measure of clarity of cause-effect beliefs. The pointin time at which a CEO or other top executive is interviewed and the state of knowledgethe CEO possesses at that point in time can have an impact on the accuracy of the testof the hypotheses. Executives may have more developed cause-effect beliefs at otherpoints in time and not all executives have been interviewed at the same point in time intheir tenures. Although this is a limitation, this is very difficult to overcome even usingalternative approaches to research design. In addition to these limitations, there is apossibility of impression management and memory biases in the use of interviews assources of data about top executives and organizations. The use of interviews assources of data are also limited by the accuracy with which the interviewees describetheir own behaviors and organizational practices related to the study.

The results of the study need to be interpreted with caution because of theabove-mentioned limitations and further theory building should be based on morerigorous empirical research that controls for and rules out other sources of variance inboth leadership perceptions and organizational performance. This study should be

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viewed in the context of being one of the earliest studies to explicate and testknowledge management practices initiated by top executives. The larger body ofstrategic management research identifies a number of variables affecting firmperformance and the leadership literature identifies a number of variables affectingleadership perceptions. This study makes a contribution by identifying thesimultaneous relationships between some of the independent variables and bothleadership perceptions and organizational performance. However, it is limited by thefact that it does not rule out other sources of variance in these dependent variables.

This study has studied the importance of information acquisition, information use,and more generally information and knowledge management as key leader functions orbehaviors. Overall, the findings of this study and the framework used here point to theimportance of the role of leaders (top executives) in information and knowledgemanagement and to the need for the leadership literature to address this in more detail,both theoretically and empirically. Much theoretical attention (e.g. Bell De Tienne et al.,2004; Bryant, 2003; Lakshman, 2007) has begun to be given to this topic in the leadershipliterature and some empirical attention in the micro-level knowledge leadership issues(e.g. Viitala, 2004). The macro-level organizational knowledge leadership issues,however, have been hardly empirically examined. This study presents initial evidence insupport of the grounded theory developed by Lakshman (2007) and points to the need formore attention in this domain.

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Further reading

Barney, J.B. (1986), “Strategic factor markets: expectations, luck, and business strategy”,Management Science, Vol. 32 No. 10, pp. 1231-41.

March, J.G. (1991), “Exploration and exploitation in organizational learning”, OrganizationScience, Vol. 2 No. 1, pp. 71-87.

Yukl, G. and Lepsinger, R. (2005), “Why integrating the leading and managing roles is essentialfor organizational effectiveness”, Organizational Dynamics, Vol. 34 No. 4, pp. 361-75.

Corresponding authorChandrashekhar Lakshman can be contacted at: clakshman2007@gmail.com

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