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Company Culture, Knowledge Sharing and Organizational Performance. The Employee's Perspective Conference Paper · September 2017
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Kucharska, W. & Wildowicz-Giegiel, A. (2017). Company Culture, Knowledge Sharing and Organizational Performance: The Employee’s Perspective. In Proceedings of the 18th European Conference on Knowledge Management, Vol.1, pp 524-531.
Kucharska, W. & Wildowicz-Giegiel, A. (2017). Company Culture, Knowledge Sharing and Organizational Performance: The Employee’s Perspective. In Proceedings of the 18th European Conference on Knowledge Management, Vol.1, pp 524-531.
Company Culture, Knowledge Sharing and Organizational Performance. The Employee’s Perspective Wioleta Kucharska, Anna Wildowicz-Giegiel Gdansk University of Technology, Gdańsk, Poland University of Bialystok, Białystok, Poland
[email protected];
[email protected] Abstract: Knowledge sharing, as a basic prerequisite for knowledge creation, is a dynamic social process characterized by profound human interactions. The process of knowledge sharing can be supported by organizational culture which is a set of values and norms giving identity to each enterprise. As a valuable element of intellectual capital, organizational culture contributes to achieving strategic business goals. The purpose of this article is to explore the impact of organizational culture, and its axiological, and behavioural dimensions, on knowledge sharing and company performance from the employee’s perspective. Human resources are the most critical assets for organizational performance. Their utility under the conditions of network organization depends on to a very high degree of the organizational culture that enhances loyalty, commitment and job satisfaction of employees, encourages knowledge sharing, and as a result, improves the overall organizational performance. The article aims at better understanding the relation between organizational culture dimensions and knowledge sharing and company performance from the employee point of view. For this purpose, the authors conducted a study among Polish employees with different roles and experiences across different industries. The data collected during the study has been analyzed using the equal structural modelling method. Keywords: knowledge sharing, company culture, organizational performance, Hofstede’s culture dimensions Introduction During the past forty years, organizational culture has been a subject of growing interest of researchers and practitioners who analyze this phenomenon through the prism of different perspectives. The concept of organizational culture usually refers to the organizational structure which is embedded in values, beliefs, and assumptions that serve as a guide for its members. Each organization is characterized by a specific organizational culture. There are both cultures that contribute to the effective functioning of the company and those that hamper its effectiveness. It is generally acknowledged that organizational culture is an essential factor of organizational performance and a source of sustainable competitive advantage under the conditions of the contemporary economy (Lee and Gaur 2013; Idris, Wahab and Jaapar, 2015). Thanks to the suitably shaped organizational culture the members of a given organization can work in harmony with others to achieve some shared goals. Moreover, organizational culture is more often regarded as one of the basic prerequisites for the generation of innovation that is perceived as a social process (Büschgens, Bausch and Balkin, 2013; Lin, Donough, Lin and Lin, 2013). It may encourage or deter knowledge sharing and learning which are decisive for innovation. For instance, symptoms such as knowledge hoarding, apprehension about failures, and the “not-invented-here” syndrome are hostile to knowledge sharing. In turn, incentives related to knowledge management efforts are crucial in creating a knowledge sharing culture (Sundaresan and Zhang, 2013). The article aims to explore the impact of different dimensions of organizational culture on knowledge sharing and organizational performance. Despite the importance given to the organizational culture as a factor which contributes to company performance and competitiveness, empirical research in this scope is still necessary. Taking it into consideration, the identification of which cultural dimensions are crucial influencers is required to easy recognise fast changes in business environment and have the ability to adapt to them. In opinion of authors, the results of empirical research based on the case of Polish enterprises certainly enriched the existing knowledge on the company culture and its mutual links
Kucharska, W. & Wildowicz-Giegiel, A. (2017). Company Culture, Knowledge Sharing and Organizational Performance: The Employee’s Perspective. In Proceedings of the 18th European Conference on Knowledge Management, Vol.1, pp 524-531.
with knowledge sharing and organizational performance. The formulated conclusions may both inspire future research and find its application in practice. 1. Conceptual Framework Organizational culture is one of the important issues in theory and practice. There are various definitions of organizational culture being proposed by various researchers over the years. For example, Schein (1986) perceives ’culture’ as a pattern of basic assumptions – invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration. According to Hofstede et al. (2010) organizational culture is a collective mind programming that helps us distinguish members of one organization from another. Mc Manus et al. (2016) describe company culture as the norms, beliefs, values and practices adhered to by organisational members, in order to sustain and develop the firm's goals and objectives without adversely affecting the welfare of the organisation or its members. Within which, sub-cultures can develop. In turn, the Frost’s (1985) definition is: “talking about company culture seems to mean talking about the importance for people of symbolism, rituals, myths, stories and legends and about interpretations of events, ideas, and experiences that are influenced and shaped by the groups within which they live.” It suggests that national culture influences company culture (Hofstede, 1980; Alvesson, 2012). In the literature, at least a few models of organizational culture can be found, such as Hofstede (1980), Trompenaars, Hampden-Turner (2002) or House, Hanges and Javidan (2004). The authors mentioned above identified different measurements of organizational culture. For example, Hofstede (1980) proposed the five-dimensional measurement of organizational culture which is used as a set of variables: power distance, uncertainty avoidance, individualism/collectivism, masculinity and long-term orientation. The first dimension identified with power distance is defined as: “the extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally.” People in some cultures accept a higher degree of unequally distributed power than do people in other cultures. Social hierarchy is a part of the culture. Leaders are therefore expected to resolve serious problems and make the difficult decisions. Inferiors avoid conflicts with bosses. On the other hand, in lower power distance cultures there is a preference for consultation and subordinates will quite readily approach and contradict their bosses. The second company cultural dimension, according to Hofstede (1980) is uncertainty avoidance defined as: "the extent to which the members of a culture feel threatened by the uncertain or unknown situation.” Cultures whose members are not keen on uncertainty are planning everything carefully, doing that they try to avoid the uncertainty. The third dimension refers to Individualism that is defined by Hofstede as: "pertains to societies in which the ties between individuals are loose: everyone is expected to look after himself or herself or his or her immediate family.” Conversely, collectivism means that people identify with groups and are willing to work as a team which protects them in exchange for loyalty and compliance. The next dimension Masculinity represents: "the dominant male sex role pattern in the vast majority of both traditional and modern societies” as Hofstede defined. A masculine society has traits that are categorized as male's, such as strength, dominance, assertiveness, and egotism. A feminine society is traditionally thought of as having conventional traits, such as being supportive, caring, and relationship oriented (Ting-Toomey, 2012). The last dimension Long-term orientation is when the company is focused more on the future than for the present. Yoo et al. (2011) developed the Hofstede’s concept of organizational culture to directly measure the culture at the company level. Referring to Kathiravelu et al. (2014), company culture is considered as an important influencer affecting a knowledge sharing process. The significant influence of Collaborative Culture on Knowledge Sharing has also been pointed out by Mueller (2014) and Arpaci and Baloglu (2016). Al Saifi (2015) suggests that organisational culture has the most critical input into general all knowledge management initiatives, an important component of which is knowledge sharing. It is also claimed that organisational culture can have a positive impact on whether employees are willing to
Kucharska, W. & Wildowicz-Giegiel, A. (2017). Company Culture, Knowledge Sharing and Organizational Performance: The Employee’s Perspective. In Proceedings of the 18th European Conference on Knowledge Management, Vol.1, pp 524-531.
share knowledge regardless of the directives coming from senior management (Suppiah and Sandhu 2011). Similarly, Kucharska and Kowalczyk (2016b) indicate that organisational culture influences tacit knowledge sharing. Taking into consideration the above research, we assume that organizational culture dimensions proposed by Hofstede have an influence on knowledge dissemination. In general, the managers from the masculine culture are perceived as more assertive, decisive, and aggressive compared to the feminine culture. The existence of such kind of values and attitudes may discourage employees to knowledge sharing. A culture with a high level of uncertainty avoidance supports the process of knowledge sharing because of its formalization by laws, rules, access and distribution control and other safety measures. In the case of the high power distance organization employees feel totally dependent on their superiors and prefer to be instructed instead of implementing their own ideas during tasks performance. Moreover, they are usually reluctant to knowledge sharing. In turn, the members of a culture characterized by long-term orientation are more motivated to achieve long-term goals, and it should encourage them to knowledge sharing. In the same degree, in collectivism culture employees show the greater affiliation within the group, are more determined to achieve group goals, and it has a positive impact on knowledge sharing. Taking it into consideration, the following hypothesis were formulated: H1: A high level of masculinity negatively influences the process of knowledge sharing. H2: A high level of power distance negatively influences the process of knowledge sharing. H3: A high level of uncertainty avoidance positively influences the process of knowledge sharing. H4: A high level of long-term orientation positively influences the process of knowledge sharing. H5: A high level of collectivism positively influences the process of knowledge sharing. Many theoretical and empirical research confirmed that the effective knowledge management brings many positive outcomes, such as productivity growth and performance improvement (MesmerMagnus and DeChurch, 2009), leading to organisational success (Asrar-ul-Haq and Anwar, 2016). Among other processes of knowledge management, tacit and explicit knowledge sharing has been identified as the most vital one (Witherspoon et al., 2013; Asrar-ul-Haq and Anwar, 2016). Knowledge sharing, according to the research of Gemino et al. (2015), Park and Lee (2014), Yang and Farn (2009), Calvo-Mora et al. (2015), and Kucharska and Kowalczyk (2016a) affects project’s organisation performance. Bearing in mind all above we can assume that knowledge sharing has a positive influence on organisational performance what was formulated in hypothesis 6. H6: Knowledge sharing positively influences organisational performance. Figure 1 presents the theoretical model including the Hofstede’s five dimensions of culture and the presented hypotheses. Company Culture dimensions: control variables: company size, industry, position, gender Masculinity
H1 Power Distance
H2 Uncertainty Avoidance
H3 H4 H5
Long-Term Orientation
Collectivism
Knowledge Sharing
H6
Company Performance
Kucharska, W. & Wildowicz-Giegiel, A. (2017). Company Culture, Knowledge Sharing and Organizational Performance: The Employee’s Perspective. In Proceedings of the 18th European Conference on Knowledge Management, Vol.1, pp 524-531.
Figure 1: Conceptual framework Source: Authors’ own study based on Hofstede (1980), Rikowski (2007), Yoo et al. (2011), Tong et al. (2014), Rezaei et al. (2016). The article aims at better understanding the relation between organizational culture dimensions and knowledge sharing and company performance from the employee point of view. For this purpose, the authors conducted a study among Polish employees with different roles and experiences across different industries. The 366 cases collected from Jaunary to April 2017 has been analyzed. The analysis was conducted using the structural equation modeling method. For the theoretical model presented in Figure 2, both the Confirmatory Factor Analysis (CFA) models and the structural model were elaborated. The model was then estimated and assessed. Estimation was conducted according to a maximum likelihood method (ML). The evaluation of the data and next model quality was conducted based on tests such as: normality assessment, Average Variance Extraction (AVE), CR (Composite Reliability), Cornbach α and next: Root Mean Square Error of Approximation (RMSEA), CMIN/DF, Comparative Fit Index (CFI) with the use of SPSS AMOS 23 software. Table 1 presents test results of the model’s goodness of fit. Appendix 1 presents more details connected with the used scales and their reliabilities, whereas Appendix 2 shows more statistics connected with the achieved estimations of the structural model. A relatively positive evaluation of the model allows us to proceed to the presentation of test results. 3. Results Referring to the five Company Culture dimensions, it turned out that Uncertainty Avoidance is crucial for Knowledge Sharing in a company from the employee point of view. Masculinity and Long-Term Orientation have no significance referring to the study sample. Power distance dimension has a negative influence on Knowledge Sharing, while Collectivism has a positive impact through including additional controls such as company size and position held by the respondents. It seems evident that the lower position, the stronger collectivism is observed. Figure 2 shows a graphical presentation of the achieved results. Company Culture dimensions:
Masculinity
- 0,03 (ns) Power Distance
-0,26 Uncertainty Avoidance
0,60
Knowledge Sharing
0,74
Company Performance
-0,08 0,20 (ns) Long-Term Orientation
0,17 - 0,23
company size position
Collectivism
Figure 2: CFA Model p
