Organizational learning through transformational

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232 Received 24 September 2015 Revised 2 December 2015 21 January 2016 22 March 2016 Accepted 20 April 2016

Organizational learning through transformational leadership Muhammad Kashif Imran, Muhammad Ilyas, Usman Aslam and Ubaid-Ur-Rahman Department of Management Sciences, Superior University, Lahore, Pakistan Abstract Purpose – The transformation of firms from resource-based-view to knowledge-based-view has extended the importance of organizational learning. Thus, this study aims to develop an organizational learning model through transformational leadership with indirect effect of knowledge management process capability and interactive role of knowledge-intensive culture. Design/methodology/approach – Different statistical analyses were done to check the direct, indirect and interactive effects on 204 valid responses. Findings – The results are clearly depicting that transformational leadership has significant positive impact on organizational learning and knowledge management process capability, and partially mediates the relationship between transformational leadership and organizational learning. Additionally, knowledge-intensive culture has strengthened the relationship between transformational leadership and knowledge management process capability. Originality/value – This is an overarching and unique conceptual model. After examining the importance of organizational learning in the context of innovative ability, competitive advantage, creativity and organizational performance, management has to initiate steps to induct transformational leaders, develop knowledge-intensive culture and introduce knowledge management processes to boost learning environment in organizations. Keywords Competitive advantage, Transformational leadership, Organizational learning, Knowledge intensive culture, Knowledge management process capability Paper type Research paper

Nomenclature OL TL KM KAC KAP KCN KMPC KIC

The Learning Organization Vol. 23 No. 4, 2016 pp. 232-248 © Emerald Group Publishing Limited 0969-6474 DOI 10.1108/TLO-09-2015-0053

⫽ ⫽ ⫽ ⫽ ⫽ ⫽ ⫽ ⫽

Organizational learning Transformational leadership Knowledge management Knowledge acquisition Knowledge application Knowledge conversion Knowledge management process capability Knowledge-intensive culture

Introduction The transformation of firms from resource-based-view to knowledge-based-view has extended the importance of organizational learning (OL; Chuang, 2004). In current highly volatile business environment, OL has become the source of competitive advantage for dynamic organizations (Liao and Wu, 2010). Gong et al. (2009) have

suggested that organizations that have capacity to learn faster can get sustainable Transformational competitive advantage as compared to their rivals. Moreover, organizations that have a leadership clear process regarding OL can address organizational issues, i.e. organizational change, organizational renewal and transformation, innovation and competitive and comparative advantage, more quickly and sustain their position in the industry (Bierly et al., 2000; Goh and Richards, 1997). On the other hand, gradual and continuous learning mechanisms within organization always have positive effects on human 233 resource and market reputation outside the organization. The responsibility of OL lies with leaders. In current organizational context, transformational leadership (TL) has gathered fame, and mostly, organizations emphasized on transformational leaders to gain the required level of organizational performance (Judge and Piccolo, 2004). Different scholars have measured the link of TL toward organizational commitment, employee motivation, employee and unit performance, knowledge processes, technology diffusion and culture development (Avolio et al., 2004; Gong et al., 2009; Jung et al., 2003; Liao et al., 2008; Zagoršek et al., 20092009). Organizational performance indicators are the key elements that were involved in every-time research, and researchers have fragmented views about the pros and cons of OL toward these triggers. Bass and Avolio (1993) have suggested that knowledge and learning culture have become the tools to get competitive advantage in a high-tech industry environment and best be attained through TL. Moreover, TL develops intelligence in employees that leads to creativity and learning (Barling et al., 2000). Brandi and Elkjaer (2011) worked out that OL is affected through the socialization process that is one of the core themes of TL. Knowledge management process capability (KMPC) has become the source of innovation for organizations through developing new learning avenues for management and employees of the organizations (Ju et al., 2006). The efficient knowledge processes set the basis of learning and development of an organization (Andrews and Delahaye, 2000). There are numerous researches in existing literature that have explored that employee learning and OL can have some link with knowledge processes, i.e. creation, conversion and application of knowledge (Andrews and Delahaye, 2000; Cho, 2015; Huber, 1991; Liao and Wu, 2010; Purushothaman, 2015). Likewise, knowledge-intensive culture (KIC) plays a vital role to develop KMPC of an organization (Hauschild et al., 2001). The KIC provides support to leaders for enhancing motivation regarding knowledge flow, more particularly, tacit knowledge flow (Nam Nguyen and Mohamed, 2011). The collaborative learning that is more familiar in knowledge-intensive firms is the result of socialization and supportive culture (Oliver and Reddy Kandadi, 2006; Ribiere and Sitar, 2003). Recently, Cho (2015) uncovered the outcome effects of OL toward different performance triggers of organizations that extend the importance of OL. On the other side, existing theory of OL contains different models that enrich this concept with multi-colors in individual and organizational context (Cangelosi and Dill, 1965; Crossan et al., 1999; Huber, 1991; March, 1991; Shrivastava, 1983). However, poverty exists in existing literature regarding developing of OL through TL with the facilitation of knowledge management (KM) tools, i.e. KIC and KPMC. Moreover, existing literature is quite silent regarding the role of KIC toward OL. Therefore, the aim of this study is to ripen a new model of OL through effective TL and KMPC elements having the interactive effect of KIC.

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Literature review Organizational learning and transformational leadership The ancient studies on OL by Cangelosi and Dill (1965) and Shrivastava (1983) explored that OL stems through observation and its effective interpretation. In current times, OL has turned into a very broader concept that includes vicarious learning through others’ experience, Web 2.0 learning through information technology, traditional learning through classrooms and training methods, social learning through electronic media and strategic learning through knowledge and competitive techniques (Chi et al., 2008; Islam et al., 2013; Vargas, 2015; Geh, 2014). Research scholars have explained the importance of OL toward effective implementing change, introducing transformation, raising innovative ability, strategy formation and execution, problem-solving, organizational renewal and revival, gaining competitive advantage and performance outcomes (Adams et al., 1998; Attewell, 1992; Bass and Avolio, 1993; Bierly et al., 2000; Edmondson and Moingeon, 1998; Goh et al., 2012). Moreover, OL guarantees progress and sustainability in high-tech industry through effective OL processes (Bass et al., 2003; Cho, 2015; March, 1991). They have presented research work on OL that is much fragmented with numerous facets, and researchers have different views about the framework of OL. Additionally, socially intelligent employees are more innovative and problem-solvers, as they get solutions from each other (Brandi and Elkjaer, 2011; Wang and Ahmed, 2003). Moreover, comparative analysis showed that TL is more focused to OL as compared with transactional leadership (Pérez López et al., 2005; Zagoršek et al., 2009). TL refers to an innovative style of leadership in which leaders promote individual attention, give empowerment to followers, have intellectual stimulation, exert idealized influence, stimulate growth and use inspirational motivation (Jung et al., 2003; Yukl, 1999). Earlier to that, Blanchard et al. (1993) add leadership theory with situational leadership that argued that singly style of leadership does work and is situation-dependent. Moreover, extraordinary results can be attained through effective leadership (Kouzes and Posner, 2006). TL is widely accepted all over the world due to its success rate over other forms of leadership, i.e. transactional and laissez-faire (Bono and Judge, 2004; McColl-Kennedy and Anderson, 2002). Rasool et al. (2015) has found that TL is visionary, using self-depreciating humor, and inspirational for followers that ultimately lead to enhance the performance of doctors in health sector. Bass et al. (2003) argued that TL increases the viability of unit performance. TL using motivational tools can bring effective learning orientation in organizations (Geh, 2014) that has the ability to prosper OL in organizations (Purushothaman, 2015). Further, Thomas and Vohra (2015) argued that in innovative economies, TL and OL go side by side. Contrary to this, Vargas (2015) claimed that all leadership styles promote OL in this innovative era. Similarly, well-known names from Fortune 500 and blue-chip organizations are going to adopt TL and KM mechanisms for OL and innovative performance outcomes through OL, i.e. Microsoft, IBM, Samsung and Apple (Apte et al., 2012; Hagiu and Wright, 2015; Lussier and Achua, 2015). Based on these grounds, the following hypothesis is drawn: H1. TL can foster OL in an organization. Knowledge management process capability, transformational leadership and organizational learning KMPC refers to the ability of a firm to create, convert, disseminate, retain and apply new or existing knowledge to gain competitive advantage and innovative-ability of firm

(Gold and Arvind Malhotra, 2001; Ju et al., 2006; Liao et al., 2008). Organizations have to Transformational apply existing knowledge for routine or already known problems and develop new leadership knowledge for uncertain and new problems (Chang and Chuang, 2011). Knowledge processes are also the bases for OL mechanisms for better performance (Andrews and Delahaye, 2000). Some recent studies have developed arguments of liking mechanisms regarding OL in context with KPMC (Hall, 2005; Lam et al., 2014; Professor Francesco Polese et al., 2015; Thomas and Vohra, 2015). 235 Knowledge acquisition (KAC) is a process through which new knowledge is acquired to solve existing or new problems (Gold and Arvind Malhotra, 2001). If an organization has better processes to acquire new knowledge, it will ultimately boost overall learning level of that organization (Martín-de Castro, López-Sáez, Delgado-Verde, Andreeva, and Kianto, 2011). Martín-de Castro et al. (2011) argued that creativity and learning is dependent on efficient knowledge processes. Knowledge conversion (KCN) is the second process, which is defined as the ability of a firm to convert knowledge into useable form (Gupta et al., 2000). It is utmost important to convert knowledge into useable form for problem-solving and introducing a new product. The overall employees’ learning confined with KCN, as they require customized knowledge regarding their tasks (Andrews and Delahaye, 2000). Knowledge application (KAP) is defined as the process of applying existing knowledge for doing routine tasks and problem-solving (Chang and Chuang, 2011). Andrews and Delahaye (2000) highlighted the importance of KM processes on OL. On the other side, Haas et al. (2014) have explored the role of KM processes toward problem-solving. Moreover, Singh (2008) explained that there is positive association between TL and KM processes. Additionally, empowering leadership is helpful to enhancement of knowledge creation and sharing (Politis, 2001; Srivastava et al., 2006). Theriou et al. (2010) argued that KMPC has one of the critical enablers of OL. On the other side, TL has a close link with KMPC and OL (Thomas and Vohra, 2015). Based on these ground, there is back box of how much effect KMPC receives from TL and transmits to OL, which is measured through the following hypotheses: H2. KMPC mediates the relationship between TL and OL. H2A. KAC mediates the relationship between TL and OL. H2B. KCN mediates the relationship between TL and OL. H2C. KAP mediates the relationship between TL and OL. Knowledge-intensive culture, transformational leadership and knowledge management process capability KIC or knowledge culture is defined by Hauschild et al. (2001) as “shared norms, values, and beliefs that knowledge sharing is beneficial for employees and organization”. KIC is one of the props of integrated KM framework that is helpful for KAC, KCN and KAP (Oliver and Reddy Kandadi, 2006). Hauschild et al. (2001) have argued that developing a knowledge culture is the first and foremost step toward developing an OL environment. Additionally, knowledge culture is equally beneficial for local and global organizations (Imran, 2014; Lal, 2002). Moreover, KM processes have been facilitated by knowledge culture, and transformational leaders gain benefits from collaborative culture (Ribiere and Sitar, 2003). On the other hand, KIC proved as a mediator in between leadership

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styles and KM practices (Nam Nguyen and Mohamed, 2011). In the presence of knowledge culture, it is easier for leaders and employees to interact with each other and effectively disseminate knowledge that they have (Haas et al., 2014; Vargas, 2015; Geh, 2014). Therefore, it seems that KIC can strengthen the TL and KMPC relationship (Figure 1). H3. KIC moderates the relationship between TL and KMPC. H3A. KIC moderates the relationship between TL and KAC. H3B. KIC moderates the relationship between TL and KCN. H3C. KIC moderates the relationship between TL and KAP. Research methodology Participants and setting The current study was conducted in private sector banks of southern Punjab, Pakistan. The main reason behind the selection of private sector banks is that they have introduced team culture after adopting new methods of banking, i.e. focusing on online banking, enhanced online services and debit and credit ATM channel. There are 20 private sectors commercial banks currently operating in southern Punjab. The sample size was determined as 386 by using online sample size calculator from the population frame of approximately 39,280 employees. To get the effective response from known population, simple random sampling is done to select 386 employees from the sampling frame. Research design Current study is categorized under the umbrella of explanatory research design, as this study measures the cause-and-effect relationship between constructs through a structured questionnaire. Further, this research is categorized as cross-sectional with respect to time horizon because cross-sectional research gives edge of time, cost and effectiveness of response regarding a particular relationship (Kim, 2003; Zapf et al., 1996). Research paradigm and approach The current study has emphasized on existing literature for hypotheses development that need to be tested with the help of deductive reasoning approach and meet philosophical assumptions of positivistic paradigm proponents (Schrag, 1992).

Figure 1. Organizational learning through leadership: the mediating role of KM process capability

Questionnaire Transformational To empirically test the proposed relationship of the current study, a structured leadership questionnaire was formed with the help of existing scales of the constructs on a seven-point Likert scale (1 – strongly disagree to 7 – strongly agree). TL was measured on the five-item scale developed and tested by Carless et al. (2000) Appendix. KIC was measured using a well-validated scale developed by Gold and Malhotra (2001). KMPC consists of KAC, KCN and KAP. All three variables will be measured on the basis of 237 scales developed by Gold and Malhotra (2001). The OL scale developed by Bess et al. (2010) was adopted in this study. Results and analysis Demographic outline of the respondents To empirically test the current study, 204 valid responses, out of 386, have been used (response rate is approximately 53 per cent). The responses of the current study were obtained from the managerial employees who are working in a team environment that is headed by a team leader. These employees are directly or indirectly involved in decision making, i.e. credit analyst, business manager, liability manager, branch manager, relationship manager, retail manager and area manager. With respect to gender composition, 83 females and 121 males have responded to the questionnaire which clearly shows that the private sector is promoting women empowerment. Maximum responses are received from young bloods of private sector banks, as they range in age from 26 to 40 years (143, 70 per cent). Similarly, maximum responses were received from employees with 1-15 years of experience (146, 71.56 per cent). Reliability analysis To measure the internal consistency, Cronbach’s (1951) value was used, and it was found that maximum scales lie between 0.8 and 0.9 (Table I), which is good as criteria laid down by George and Mallery (2003) regarding internal consistency of construct. Hypotheses testing Regression analysis. Linear regression analysis was executed to measure H1 (acceptance/rejection), and it was found that there is positive impact of TL on OL. Variation of 42 per cent was found in OL due to TL, with model significance at 99 per cent confidence having beta coefficient value at 0.56 and analysis of variance statistic value at 146.73 (Table II). Scale descriptions Transformational leadership Knowledge acquisition Knowledge application Knowledge conversion Knowledge-intensive culture Organizational learning

Total items

Alpha

5 5 5 5 5 10

0.884 0.819 0.897 0.884 0.895 0.907

Table I. Reliability coefficient Cronbach (1951) Notes: George and Mallery (2003) highlighted the ranges of reliability, e.g. ⱖ0.9 ⫽ excellent; ⱖ0.8 ⫽ alpha value good; ⱖ0.7 ⫽ acceptable; ⱖ0.6 ⫽ questionable; ⱖ0.5 ⫽ poor; ⬍0.5 ⫽ unacceptable

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Mediation analysis. To investigate H2 (H2A, H2B and H2C), Preacher and Hayes’ (2004) mediation test was applied in one-go. A-Path1 revealed that there is positive relationship between TL and KAC, with ␤ ⫽ 0.663, t ⫽ 12.84 at 95 per cent confidence level. Further, B-Path1explained that KAC has positive relationship with OL, having ␤ value 0.428 with significant p-value. C and C’-Path1 showed evidence that KAC partially mediates the relationship between TL and OL, with ␤ ⫽ 0.555 and t value ⫽ 12.11 at significant p-value (C-Path1) and ␤ ⫽ 0.271 and t value ⫽ 4.99 at significant p-value (C’-Path1) at 95 per cent confidence level (Table III). The overall statistics of H2A are also significant with R2 ⫽ 0.556 and F-value ⫽ 125.6 (Figure 2). A-Path2 revealed that there is positive relationship between TL and KCN, with ␤ ⫽ 0.655, t ⫽ 13.89 at 95 per cent confidence level. Further, B-Path2 explained that KCN has positive relationship with OL, having ␤ value 0.463 with significant p-value (Table IV). C and C’-Path2 showed that KCN partially mediates the relationship between TL and OL, with ␤ ⫽ 0.556 and t value ⫽ 12.11 at significant p-value (C-Path2) and ␤ ⫽ 0.252 and t value ⫽ 4.45 at significant p-value (C’-Path2) at 95 per cent confidence level (Table V). The overall statistics of H2B are also significant with R2 ⫽ 0.553 and F-value ⫽ 123.82 (Table IV). A-Path3 revealed that there is positive relationship between TL and KAP, with ␤ ⫽ 0.573, t ⫽ 10.43 at 95 per cent confidence level. Further, B-Path3 explained that KAP application has positive relationship with OL, having ␤ value 0.476 with significant p-value (Table VI). C and C’-Path3 showed that KAP partially mediates the relationship

Description

TL and OL

2

R Adjusted R2 Standardized coefficient Unstandardized coefficient Model significance F-value Table II. Regression analysis

Notes: TL ⫽ transformational leadership; OL ⫽ organizational leadership; significance level p ⬍ 0.01

Statistical descriptions

Table III. Mediation test (transformational leadership, K. acquisition, organizational learning)

0.42 0.41 0.65 0.56 0.000 146.73

Unstandardized beta p-value t-value R2 Adjusted R2 Significance value F-value

A-Path1 X-M

B-Path1 M(X)Y

C-Path1 X-Y

C’-Path1 X(M)-Y

0.663 0.000 12.84

0.428 0.000 7.79

0.556 0.000 12.11

0.271 0.000 4.99

0.556 0.552 0.000 125.61

Notes: X ⫽ transformational leadership; M ⫽ knowledge acquisition; Y ⫽ organizational learning; ***p ⬍ 0.001; 5,000 times bootstrapping for mediation test on 99% confidence level

between TL and OL, with ␤ ⫽ 0.556 and t value ⫽ 12.11 at significant p-value (C-Path3) Transformational and ␤ ⫽ 0.282 and t value ⫽ 6.03 at significant p-value (C’-Path3) at 95 per cent leadership confidence level (Table V). The overall statistics of H2C are also significant with R2 ⫽ 0.609 and F-value ⫽ 156.28 (Table V). Moderation analysis. To examine H3 (H3A, H3B and H3C), Aguinis (2004) multiple moderated regression (MMR) analysis was used with interaction term defined by Aiken et al. (1991). Using MMR, two models are developed. In Model 1, pre-requisite analysis 239 was done for MMR and it was found significant with R2 value 0.517 and F-value 107.58 (Table VI), which set the basis for applying interaction term using knowledge intensive as interacting variable between TL and KAC. In Model 2, it was observed that there is positive variation in R2 value, i.e. R2 ⫽ 0.541 (Table VI). Further, 2.4 per cent rise found in R2 value when interaction term was applied provides evidence that KIC has strengthened the relationship between TL and KAP. In Model 1, pre-requisite analysis was done for Aguinis (2004) MMR and it was found significant with R2 value 0.566 and F-value 88.72 (Table VII), which set the basis for applying interaction term using knowledge intensive as interacting variable between

Figure 2. The indirect effect of knowledge management process capability in between transformational leadership and organizational learning

Statistical descriptions Unstandardized Beta p-value t-value R2 Adjusted R2 Significance value F-value

A-Path2 X-M

B-Path2 M(X)Y

C-Path2 X-Y

C’-Path2 X(M)-Y

0.655 0.000 13.89

0.463 0.000 7.66

0.556 0.000 12.11

0.252 0.000 4.45

0.553 0.549 0.000 123.82

Notes: X ⫽ transformational leadership; M ⫽ knowledge conversion; Y ⫽ organizational learning; ***p ⬍ 0.001; 5,000 times bootstrapping for mediation test on 99% confidence level

Table IV. Mediation test (transformational leadership, K. conversion, organizational learning)

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TL and KCN. In Model 2, it was observed that there is positive variation in R2 value, i.e. R2 ⫽ 0.578 (Table VII). Further, 1.2 per cent rise found in R2 value when interaction term was applied provides evidence that KIC has strengthened the relationship between TL and KCN (Figure 3).

240 Statistical descriptions

Table V. Mediation test (transformational leadership, K. application, organizational learning)

Unstandardized beta p-value t-value R2 Adjusted R2 Significance value F-value

A-Path3 X-M

B-Path3 M(X)Y

C-Path3 X-Y

C’-Path3 X(M)-Y

0.573 0.000 10.43

0.476 0.000 9.81

0.556 0.000 12.11

0.282 0.000 6.03

0.609 0.605 0.000 156.28

Notes: X ⫽ transformational leadership; M ⫽ knowledge conversion; Y ⫽ organizational learning; 0.01; ***p ⬍ 0.001; 5,000 times bootstrapping for mediation test on 99% confidence level

Model 1

TL, KIC and KA

R2 Adjusted R2 F-value

0.517 0.512 107.58

Beta coefficient Standard error t-value Significant value

TL

KIC

0.409 0.070 5.77 0.000

0.366 0.077 5.71 0.000 TL, KIC, TL ⫻ KIC and KA

Model 2 2

R Adjusted R2 F-value

Table VI. Moderation test (transformational leadership, knowledge-intensive culture, knowledge acquisition)

Beta coefficient Standard error Significant value

0.541 0.534 78.62 TL

KIC

TL ⫻ KIC

0.906 0.17 0.000

0.881 0.19 0.000

⫺0.952 0.04 0.000

Notes: TL ⫽ transformational leadership; KIC ⫽ knowledge-intensive culture; KA ⫽ knowledge acquisition; ***p ⬍ 0.001; 99% confidence level

Model 1

TL, KIC and KN


0.566 0.561 88.72


TL

KIC

0.418 0.06 6.22 0.000

0.393 0.07 5.85 0.000

241

TL, KIC, TL ⫻ KIC and KN

Model 2 R2 Adjusted R2 F-value


Transformational leadership

0.578 0.572 60.46 TL

KIC

TL ⫻ KIC

0.776 0.15 0.000

0.774 0.17 0.000

⫺0.685 0.04 0.000

Notes: TL ⫽ transformational leadership; KIC ⫽ knowledge-intensive culture; KA ⫽ knowledge acquisition; ***p ⬍ 0.001; 99% confidence level

Table VII. Moderation test (transformational leadership, knowledge-intensive culture, knowledge conversion)

Figure 3. The interactive effect of knowledgeintensive culture in between transformational leadership and knowledge management process capability

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In Model 1, pre-requisite analysis was done for Aguinis (2004) MMR and it was found significant with R2 value 0.412 and F-value 70.47 (Table VIII), which set the basis for applying interaction term using knowledge intensive as interacting variable between TL and KAP. In Model 2, it was observed that there was positive variation in R2 value, i.e. R2 ⫽ 0.475 (Table VIII). Further, 6.3 per cent rise found in R2 value when interaction term was applied provides evidence that KIC has strengthened the relationship between TL and KAP. Discussion First of all, direct relationship between TL and OL was tested through linear regression model (H1), and it was found that there is significant positive effect of TL on OL. There was 42 per cent (Table III) variation found in OL due to TL in the private sector banks of southern Punjab. Earlier literary studies pointed out that OL is minutely affected by leaders’ techniques and they only do the job of cost– benefit analyst (Barling et al., 2000; Dvir et al., 2002). Contrary to these arguments, recently, scholars are of the view that organizations need effective leadership for improvement of OL in organizations (Gong et al., 2009). The studies pertaining to past decade have paradox regarding leadership styles and OL relationship, i.e. which is best fit for raising OL. Finally, this study explored TL style as effective for fostering OL in private sector banking of a developing country. Model 1

TL, KIC and KAP


0.412 0.406 70.47


TL

KIC

0.342 0.08 4.38 0.000

0.350 0.08 4.48 0.000 TL, KIC, TL ⫻ KIC and KAP

Model 2 2

R Adjusted R2 F-value

Table VIII. Moderation test (transformational leadership, knowledge-intensive culture, knowledge application)


0.475 0.467 60.22 TL

KIC

TL ⫻ KIC

0.798 0.17 0.000

0.803 0.19 0.000

⫺0.717 0.04 0.000

Notes: TL ⫽ transformational leadership; KIC ⫽ knowledge-intensive culture; KAP ⫽ knowledge application; ***p ⬍ 0.001; 99% confidence level

Second, Preacher and Hayes (2004) mediation test was applied to analyze H2 (H2A, H2B Transformational and H2C). The combined results revealed that KMPC partially mediates the relationship leadership between TL and OL. In-depth analysis showed that KAC has more versatile mediating variable in the relationship as compared to KCN and KAP (Tables IV-VI). This is an entirely new dimension involved in TL and OL context. Previous Western theories found direct relation regarding KM process and OL (Andrews and Delahaye, 2000; Bierly et al., 2000; Imran, 2014; Li et al., 2009; Singh, 2008). However, this study examined 243 the mediating impact of KM process that was rarely examined even in Western culture. Third, Aguinis (2004) MMR test was applied and Aiken et al. (1991) interaction term was used to evaluate this test. The results suggested that KIC partially moderates the relationship between TL and KMPC. There is no study found in literature that explored the impact of KIC in the relationship between TL and KMPC. Conclusion The current study has emphasized on developing a conceptual model on OL through TL. This study also found the mediating role of KMPC and moderating role of KIC in the relation of TL and OL. This study has found positive impact of TL to foster the OL in the banking sector of a developing country. Also, KMPC partially mediates the positive relation of TL and OL. Furthermore, it is found that efficient KM processes (acquisition, conversion and application) are the basic pillars that facilitate the OL and play the role of aiding in forming a bridge between TL and OL. Additionally, this study has explored that KIC can increase the existing positive relationship between TL and KMPC. In addition to this, KIC supports leaders to effectively manage KAC from internal and external sources, and its efficient conversion into a useable form can then be applied in the right direction and at a suitable time. Research implications The parameters explained by earlier theories and philosophies regarding OL consist of technological shift, transformational change, knowledge, wisdom, leadership and organizational culture in the context of Western culture (Attewell, 1992; Bess et al., 2010; Bierly et al., 2000; Pérez López et al., 2004). The first theoretical contribution of this study belongs to partially transmit the effect of KMPC from TL to OL in the perspective of a developing country. In previous studies of Western culture, OL always was the outcome of direct empirical and linear relation of culture, processes and wisdom. The second theoretical addition in the literature is the interactive effect of KIC in between TL and KMPC. Existing literature on TL comprises direct relationship with organizational culture or job-related outcomes (Bass and Avolio, 1993; Dvir et al., 2002). The outcomes of this study are helpful to increase the OL through TL in the perspective of Asian culture. The results of this study are useful for the top leaders of the banking sector, consultants, organizational practitioners and researchers to know how KIC and KMPC can bring a positive environment for OL. Limitations and future research Despite the fact that the current study has several theoretical and practical implications, there are certain limitations as well. First, the scope of this study is limited to the specific banking context, i.e. private sector banks of southern Punjab, and data are collected at one point in time (cross-sectional time horizon), which may give misleading results if generalized to other

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areas having different norms due to causality problem. In future research, it is suggested to collect data from a larger area and at multiple points in time. Second, in this study, data are collected through a single instrument, i.e. questionnaire, which may create common method bias and restrict the generalizability of the study according to the criteria laid down by Hair et al. (2006). In future research, it is recommended that multiple methods and multiple respondents be used to collect data, which will mitigate the effect of common method variance in the results. It is also recommended to conduct future research by taking OL as a mediator between KM capabilities or TL and organizational performance, as literature has evidence that OL leads to performance. References Adams, M.E., Day, G.S. and Dougherty, D. (1998), “Enhancing new product development performance: an organizational learning perspective”, Journal of Product Innovation Management, Vol. 15 No. 5, pp. 403-422. Aguinis, H. (2004), Regression Analysis for Categorical Moderators, Guilford Press, New York, NY. Aiken, L.S., West, S.G. and Reno, R.R. (1991), Multiple Regression: Testing and Interpreting Interactions, Sage, Thousand Oaks, CA. Andrews, K.M. and Delahaye, B.L. (2000), “Influences on knowledge processes in organizational learning: the psychosocial filter”, Journal of Management Studies, Vol. 37 No. 6, pp. 797-810. Apte, C., Dietrich, B. and Fleming, M. (2012), “Business leadership through analytics”, IBM Journal of Research and Development, Vol. 56 No. 6, pp. 1-7. Attewell, P. (1992), “Technology diffusion and organizational learning: the case of business computing”, Organization Science, Vol. 3 No. 1, pp. 1-19. Avolio, B.J., Zhu, W., Koh, W. and Bhatia, P. (2004), “Transformational leadership and organizational commitment: mediating role of psychological empowerment and moderating role of structural distance”, Journal of Organizational Behavior, Vol. 25 No. 8, pp. 951-968. Barling, J., Slater, F. and Kevin Kelloway, E. (2000), “Transformational leadership and emotional intelligence: an exploratory study”, Leadership & Organization Development Journal, Vol. 21 No. 3, pp. 157-161. Bass, B.M. and Avolio, B.J. (1993), “Transformational leadership and organizational culture”, Public Administration Quarterly, Vol. 17 No. 1, pp. 112-121. Bass, B.M., Avolio, B.J., Jung, D.I. and Berson, Y. (2003), “Predicting unit performance by assessing transformational and transactional leadership”, Journal of Applied Psychology, Vol. 88 No. 2, pp. 207-218. Bess, K.D., Perkins, D.D. and McCown, D.L. (2010), “Testing a measure of organizational learning capacity and readiness for transformational change in human services”, Journal of Prevention & Intervention in the Community, Vol. 39 No. 1, pp. 35-49. Bierly, P.E., III., Kessler, E.H. and Christensen, E.W. (2000), “Organizational learning, knowledge and wisdom”, Journal of Organizational Change Management, Vol. 13 No. 6, pp. 595-618. Blanchard, K.H., Zigarmi, D. and Nelson, R.B. (1993), “Situational leadership® after 25 years: a retrospective”, Journal of Leadership & Organizational Studies, Vol. 1 No. 1, pp. 21-36. Bono, J.E. and Judge, T.A. (2004), “Personality and transformational and transactional leadership: a meta-analysis”, Journal of Applied Psychology, Vol. 89 No. 5, pp. 901-910.

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Appendix 1

Items to measure TL

1 2 3 4 5 6 7

My leader communicates a clear and positive vision of the future My leader treats staff as individuals, supports and encourages their development My leader fosters trust, involvement and cooperation among team members My leader encourages thinking about problems in new ways and questions assumptions My leader instils pride and respect in others and inspires me by being highly competent

Table AI. Transformational leadership scale used Source: Carless et al. (2000)

Corresponding author Muhammad Kashif Imran can be contacted at: [email protected]

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