Management Science Letters 8 (2018) 151–160

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Management Science Letters

homepage: www.GrowingScience.com/msl

The role of knowledge-oriented leadership in knowledge management and innovation

Abdolreza Sadeghia* and Fereshteh Mostafavi Radb

aHead Manager of the Office of Planning, Renovating and Administrative Reform of the Governorate of Fars
b
Assistant Professor, Sepidan Branch, Islamic Azad University, Sepidan, Iran
CHRONICLE ABSTRACT

Article history: Innovation is one of the key factors distinguishing organizations from competitors in today’s
Received: November 26, 2017 highly competitive markets. Therefore, improving innovative performance is critical for creating
Received in revised format: No- competitive advantage. On the other hand, availability of information and knowledge can be de-
vember 26, 2017
fined as one the best ways to increase the innovation ability of organizations. Many theorists as
Accepted: January 27, 2018
Available online: well as practitioners emphasize on knowledge management as an enabler in enhancing organiza-
January 29, 2018 tional innovation. Hence, This study is carried out in the Fars governor in Iran during the year of
Keywords: 2017 to investigate the relationship between the knowledge-based leadership and knowledge man-
Knowledge based leadership agement and innovation performance. This study is descriptive / survey and the data collection is
Knowledge management a cross-sectional and data questionnaire is used to collect the required data. Data analysis and hy-
Innovation performance potheses testing have indicated a significant relationship between knowledge-based leadership
and knowledge management and innovation performance in Fars governor. The results also sug-
gest a relationship between knowledge-based leadership and the knowledge management activities
with a coefficient of 0.97. In addition, There is also a positive and meaningful relationship between
knowledge management and innovation performance with a coefficient of 0.73 and between
knowledge-based leadership and innovation performance with a coefficient of 0.73. The results
also led to the existence of a relationship between knowledge based leadership, knowledge man-
agement practices and innovation performance with a coefficient of 0.7081.

© 2018 by the authors; licensee Growing Science, Canada

1. Introduction

The rapid pace of development of new technologies and digital communications has led to an increase
in the importance of knowledge management (KM) as a vital source for gaining competitive advantage
(Obeidat & Abdallah, 2014). Thus, the researchers have come to the agreement that knowledge-based
management is critical for the success of the organizations, even if it's not easy to reach. Based on the
principles of knowledge management, all organizations are involved in the development and imple-
mentation of knowledge management to improve the efficiency of business processes, increase the cost
and quality of their services, and find solutions and new products for their customers. In the present
days, knowledge and information management have become a solid ground for survival in dynamic
* Corresponding author. Tel.: +989173128249
E-mail address: [email protected] (A. Sadeghi)

© 2018 by the authors; licensee Growing Science, Canada

doi: 10.5267/j.msl.2018.1.003

 
 
   
 
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and innovative organizations, and even the ability to compete in markets and commerce depends on the
acquisition, development, and updating of individual and organizational knowledge to the extent that
knowledge is considered as an essential part of the capital (Hansen et al., 1999). Therefore, vigilant
management is committed to confront uncertain factors, maintain a position and promote creativity and
innovation for expanding competitive supply (Singh, 2008).
Managing organizations, based on superior knowledge, can make more meaningful decisions on im-
portant issues and improve knowledge-based practices (Ndlela, 2010). Therefore, knowledge manage-
ment is considered to be more important than the knowledge itself, and organizations seek to clarify
how individual and organizational information and knowledge are transformed into individual and
group knowledge and skills. Successful managers outperform others to create an environment without
fear and trust that members are willing to share knowledge with each other, an environment that max-
imizes knowledge creation and drives knowledge into innovation (Donate & de Pablo, 2015). In fact,
knowledge management is considered as a way to improve the company's innovation capabilities (Kan-
ter, 1984). The Austrian economist, Schumpeter (2017), has defined innovation as creating a new busi-
ness using one of the new materials or components, presenting new processes, creating new markets or
employing new organizational organizations. In his definition of innovation, Moss-Kanter (1983) em-
phasizes the process and considers innovation to be the process of exploring any new and useful idea
to solve the problem, and believes that innovation involves the formulation of ideas, acceptance and
implementation of new ideas in the process, products and services.
On the other hand, one of the factors influencing knowledge management is knowledge-based leader-
ship (Yahya & Goh, 2002). Leadership behavior is one of the important factors that greatly influences
the direction and effectiveness of knowledge management in the organizations. In fact, the role of lead-
ers in knowledge management in an organization is important. Because today's leaders have a signifi-
cant position to influence their organizations. Hence, knowledge-based leadership has increasingly
been recognized as an essential element for the organizations to enhance knowledge management. On
the other hand, many scholars have emphasized the lack of leadership support in the failure of many
KM projects (Taherparvar et al., 2014).
Nevertheless, it should be acknowledged that the governorates as one of the most active organizations
aimed at implementing the public policy of the state within the country by coordinating various activ-
ities of state and local institutions in different provinces, towns, districts, villages and villages. Regard-
ing the issues in the Fars Governorate, located in province of Fars/Iran, such as the optimization of the
information process, the organization has focused on organizing the processes within the organization
with the aim of eliminating cases and bureaucracy and increasing the speed and accuracy of the affairs,
and therefore the importance of the leadership of the organization. The objective of the organization is
to manage knowledge and improve innovation.
On the other hand, previous studies in this field have identified the relationship between knowledge-
based leadership and knowledge management and innovation practices. However, these studies have
investigated the relationship between leadership and the specific actions of knowledge management,
and there were some relationships between the general conditions of leadership and the actions of
knowledge management and innovation. Therefore, in view of the importance of knowledge-based
leadership in the provincial governorate of Fars, as well as the cornerstone of the scientific vacuum
described in this area, the present study aims to study the relationship between knowledge-based lead-
ership, knowledge management and innovation in the Fars Governorate in Iran.
 A. Sadeghi and F. Mostafavi Rad/ Management Science Letters 8 (2018) 153

2. Literature review
2.1. Knowledge management
Although the debate on this topic had already started, the term “knowledge management” entered the
management literature in the early 1990s. Historically, three generations of knowledge management
can be distinguished from one another. The period of 1990-1995 can be the first generation of
knowledge management. In this period, most efforts focused on defining knowledge management, ex-
amining its potential benefits to organizations, and designing specific knowledge management projects.
The second generation of knowledge management emerged around 1996 by creating new jobs for
knowledge management and senior managers of knowledge. In this period, different sources of
knowledge management were combined and these issues quickly entered into the daily routine issues
of organizations (Yew Wong, 2005). In this generation, research in the field of knowledge management
focuses on issues such as knowledge definitions, business philosophy, systems, frameworks, opera-
tions, and applications. The result of this view is the third generation of knowledge management, which
is now emerging with new methods and outcomes. One of the differences of this generation with the
previous generations is the degree of integrity or integration of knowledge management with the phi-
losophy, strategy, goals, activities, systems and procedures of the organization, and how to manage
knowledge conversion. It has become part of the daily lives and motivation of the staff. It seems that
the third generation focuses on the connection between science and action (Lakshman & Parente, 2008;
Paraponaris, 2003).
Although the concept of KM is the subject of today's management meetings, it is not new. Traditionally,
family business owners have long transferred their knowledge to their children, but for many organi-
zations and their executives, the concept of KM has only been considered from a short time ago.
Gómez-Pérez et al. (2006) believes that knowledge management is the accumulation of knowledge,
rational capabilities, and the experiences of individuals in an organization and the ability to retrieve
them as an organizational capital. Newman (1997) believes that knowledge management was a collec-
tion of phenomena that involved the creation, dissemination and application of subjective and objective
knowledge in an organization. As the knowledge of an organization contributes to its increasing com-
petition and improves decision-making, the acquisition, sharing, maintenance and reuse of organiza-
tional knowledge have become vital for many organizations. The process of leveraging the knowledge
of an organization as a means of achieving innovation in processes and products, services, effective
decision making, and organizational compliance with the environment refers to knowledge manage-
ment that leads to organizational creativity. Since knowledge has two implicit and explicit dimensions,
its management is also a combination of data and information processing, the capability of mixed in-
formation technologies with the ability to innovate and creativity of individuals.
2.1.2 Knowledge based leadership
Although until recently the discussion about KM was an interesting topic in the focus of thinking, today
knowledge-based leadership has attracted the attention of active thinkers in the realm of management.
Leadership theories and research in KM has begun (Crawford, 2005). Lina and Aasta (2012) argue that
organizations can be effective in knowledge transfer processes. Lackchmann and Parent (2008) state
that knowledge-based leadership plays an important role in enhancing organizational knowledge, at-
tracting and transferring it, organizing knowledge, creating insight and managing knowledge and in-
formation. Knowledge leadership is considered to be the stimulus of the relationship between the com-
ponents of intellectual capital management of the organization. Contemporary management scholars
often emphasize the effectiveness of the acquisition, development and deployment of knowledge, and
believe that the acquisition of new knowledge depends on the transformation of the organizations and
the leadership activities and adapts to changing organizational conditions. One of the variables that
knowledge-based leadership influences on is the ability to attract knowledge.
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Cohen and Levintel (1990) introduce absorption capacity as a macroeconomic concept into the field of
organizational theories, identifying it as the ability of an organization to recognize the value of new
information from external sources, simulating and applying it for commercial purposes. One of the
main reasons on why organizations tend to point out the issue of the knowledge based leadership is that
this kind of leadership leads to more productivity than human capital, identifying deficiencies in or-
ganizational knowledge, more efficient and effective staffing, product delivery and more value added
services, customer and employee satisfaction, preventing repetitive mistakes, reducing rework, saving
time, updating and developing creativity, encouraging and innovating, organizing and expanding the
knowledge flow from manufacturer to recipient and facilitating information sharing among employees
(Yang et al., 2014). The organization's ability to cope with the inflation phenomenon increases infor-
mation. It improves the quality of customer service and, through increasing the level of awareness of
the organization, it helps the organization avoid competing against solutions, products and performance
of competing organizations (Nam Nguyen & Mohamed, 2011).
2.2. Organizational innovation
Innovation is one of the management concepts that has a close relationship with enterprise entrepre-
neurship and it cannot be ruled out when defining entrepreneurship. Even if the existing research into
organizational innovation has taken another route due to a number of considerations, it must still be
remembered that these two concepts have a very important historical and common history. This back-
ground goes back to the wider scope of the meaning of innovation, and this is what can be called the
concept of innovation from the perspective of Schumpeter (2017). Drucker (1998) also considers inno-
vation as a specialty for entrepreneurship. According to him, innovation is distinguished between en-
trepreneurial affairs and management issues. In fact, we can say that the concept of innovation in
Schumpeter's view distinguishes entrepreneurship behavior from other managers and, as a result, makes
entrepreneurship and innovation inseparable. Despite these similarities, in this article there is a distinc-
tion between these two concepts. One important reason is the difficulty of providing a common and
accepted definition of innovation. Gopalkrishnan and Damanpour (1997) examine the concept of inno-
vation in a variety of scientific fields such as economics, organizational sociology, and technology
management. They came to the conclusion that in all these areas, innovation had been considered as a
tool for adapting to changes and making new things. But the most important thing was that they ob-
served that researchers used different concepts in every field of innovation, as well as quite different
views on their impact on industry, productivity, life, growth and organizational performance. These
differences focused on how to focus on the innovation process, the field of study, and the type of inno-
vation. Choi and Lee (2002) did the same for such a study, and found that innovation was very complex
in nature and depends on the field of activity. Therefore, one can conclude that innovation is a broad
concept that has different meanings in different theoretical fields. It might be best to look at innovation
from the perspective of more classical terms, such as commercializing a new invention a product or a
new technology. Nevertheless, despite the use of such a broad definition of organizational innovation,
the distinction made above is still valid. It should be noted that both of these concepts have similarities
in relying on the concept of novelty, but moreover, organizational innovation focuses on the production
of the product (Nam Nguyen & Mohamed, 2011). While organizational entrepreneurship is more ori-
ented towards newly emerging orientations, its main purpose is to deviate from the conventional meth-
ods of doing business in the organization. Now, this may lead to the production of new products. In
addition, organizational entrepreneurship may include activities whose main purpose is to deviate from
the traditional methods of doing business in the organization with the aim of discovering new ways.
This can be done by changing the strategies and methods of organizing risk taking, going ahead and
competing, in which case it can be said that organizational innovation is a subset of enterprise-wide
entrepreneurship. Unlike organizational innovation, enterprise entrepreneurship is an entrepreneurial
approach in the units that are currently engaged. So it is within the whole range of entrepreneurial
research. This is a good idea for the development of this subcategory. Perhaps it is a good idea to note
that the use of the term “entrepreneurial enterprise” is very suitable because (contrary to the terms of
 A. Sadeghi and F. Mostafavi Rad/ Management Science Letters 8 (2018) 155

innovation, etc.) its limitations are well-defined with other similar concepts. Therefore, the use of the
term “entrepreneurial enterprise” is a more precise method for describing innovation-oriented entrepre-
neurship. It should be noted that Schumpeter's hypothesis of creative destruction has led to a great deal
of development in the concept of enterprise entrepreneurship. However, we do not intend to divide the
concept of innovation into Schumpeter-based innovation on the one hand, which is non-persistent and
revolutionary, and to bring on-going innovation (on the other hand). Because, when discussing the
organization, there is no need for innovation to be categorized gradually or suddenly. An important
issue is the distinction between innovation in product production and innovation in the production pro-
cess.

3. The proposed method

The present study aims to explain the relationship between knowledge leadership and knowledge man-
agement and innovation performance in the governorate of the province Fars in Iran the model origi-
nally proposed by Donate and de Pablo (2015). In this study, knowledge leadership is an independent
variable, KM functions in the dimensions of knowledge transfer, knowledge management and the use
of knowledge management are considered as intermediary variables, and finally innovation in the pro-
cess and services are considered as dependent variables. According to the principles of KM, all organ-
izations will develop and implement knowledge management to improve the efficiency of business
processes, increase the productivity and quality of their services, and find new solutions and products
for their customers. One of the factors influencing innovation in services and processes is the
knowledge management and knowledge management functions.
Management implications

KM transfer Innovation

KM storage Services
Knowledge leadership
KM applying Processes

Km creating Performance

Fig. 1. The proposed study of this paper

Main hypothesis: There is a relationship between knowledge-based leadership and knowledge man-
agement and innovation performance in the governorate of Fars.
Sub-hypotheses
1. There is a relationship between knowledge-based leadership and knowledge management
practices in the governorate of Fars.
2. There is a relationship between the functions of knowledge management and the performance
of innovation in the governorate of Fars.
3. There is a relationship between knowledge-based leadership and innovation performance in
the governorate of Fars.
4. There is a relationship between knowledge-based leadership through the functions of
knowledge management and innovation performance in the governorate of Fars.
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This research can be considered as a descriptive and survey-based research. The present research is
conducted in a natural environment with minimal intervention by the researcher. The statistical popu-
lation of this research is made up of 500 employees by all the staff of Fars Governorate in Fars Province/
Iran. The sampling method is relative class and the sample size is determined to be 207 people using
Morgan table. In this research, a questionnaire including knowledge-based leadership questionnaire,
knowledge management and innovation was used to collect the necessary data. Table 1 summarizes the
profile of the questionnaire used. In this study, we used SPSS software to analyze the collected data
using AMOS software and to measure the reliability of the questionnaire, we used Pearson correlation
and structural equations to analyze the data in this study.
According to Table 1, the process innovation variable has the highest mean (3.72) and knowledge
transfer (3.11) has the lowest average. The observed skewness values for research variables are in the
range (-2, 2). In other words, the slope of the variable is normal and its distribution is symmetric. The
amount of elongation of the variables is also in the range (-2, 2). This indicates that the distribution of
variables is normal.

Table 1
Basic statistics on the survey
Knowledge
Knowledge KM KM Km Service Process
Variable based Innovation
management transfer storage implication innovation innovation
leadership
Mean 3.2215 3.2068 3.1143 3.3043 3.2017 3.7014 3.4058 3.7227
Median 3.2857 3.3444 3.3333 3.4 3 3.6 3.3333 3.8
Standard deviation 0.7 0.69 0.82 0.67 0.9 0.5 0.64 0.56
Variance 0.5 0.48 0.67 0.45 0.82 0.25 0.41 0.32
Skewness -0.71 -1.05 -0.8 -0.59 -0.58 -0.14 -0.52 -0.43
Skewness error 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16
Kurtosis 0.46 1.04 0.47 0.03 0.04 0.2 0.5 -0.22
Error in Kurtosis 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33

In order to determine which indicators are acceptable for the measurement in the model. First, the
individual measurement patterns were analyzed and the general indexes of pattern matching were used
for the measurement models (confirmatory factor analysis). To test the hypotheses, structural equations
modeling has been used to determine the possibility of the effect of factors on each other. This statistical
test is analyzed using the AMOS software. In Fig. 2, the standard and significant values of the final
model of research have been shown.

Fig. 2. The results of the implementation of the structural equation modeling

 A. Sadeghi and F. Mostafavi Rad/ Management Science Letters 8 (2018) 157

In this section, the general indicators of variable fit are shown. Table 2 shows the goodness of the fit-
ting of the structural equation model and Table 3 shows the results of the model test

Table 2
The results of the statistical tests
CMIN/DF NFI GFI RMR IFI CFI RMSEA
2.827 0.90 0.97 0.04 0.90 0.90 0.06

Regarding the results of the fittest test, the research model shows that all fitting indexes of the model
represent the proper fitness of the model, as well as testing the model assumptions that all the assump-
tions of the model have been confirmed and it can be concluded that the model conceptualization in
society has been reviewed and approved.

Table 3
The results of testing the hypotheses of the survey
Hypothesis Hypothesis Critical P Regression Result
Main hypothesis Knowledge leadership → Innovation performance 4.151 0.001 0.97*-0.73 = 0.7081 Confirmed
KM management Confirmed
First hypothesis Knowledge leadership → 9.588 0.001 0.97
functions
Second KM management Confirmed
→ Innovation performance 2.459 0.001 0.73
hypothesis functions
Third hypothesis Knowledge leadership → Innovation performance 2.683 0.001 0.63 Confirmed
Fourth hypothesis Knowledge leadership → Innovation performance 4.151 0.001 0.97*-0.73 = 0.7081 Confirmed

Management implications

KM transfer Innovation

KM storage Services
Knowledge leadership
0.97 KM applying 0.73 Processes

Km creating Performance

Fig. 3. The results of the proposed study of this paper

4. Conclusion
Different companies worldwide develop and implement knowledge management innovations to im-
prove their processes, productivities and quality of their services, and provide solutions and prod-
ucts/New services for customers. The KM leadership suggests a significant change in the challenges
faced by managers in recent years. In addition, in the field of technology, innovation is usually a direct
consequence of the effectiveness of knowledge management and one of the main goals of knowledge-
producing companies to pursuit of competitive advantages. Today, the art of leadership and manage-
ment of organizations is becoming the art of knowledge management, which means that a manager
simply does not manage individuals but manages the knowledge and leadership means to provide the
right conditions for the production of knowledge. Leadership is one of the basic requirements for the
activities of many of today's organizations; it also plays a key role for the success of KM. On the other
hand, despite the fact that choosing the appropriate leadership style can act as an empowering agent of
knowledge management, neglecting this issue and the mismatch of leadership style in the organization,
with the vital principles of knowledge management, can lead to unpleasant consequences for the firms.
Knowledge-based leadership and proper knowledge management through the production, maintenance
and storage of knowledge can improve organizational performance at all levels of the organizations.
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The results of the data analysis in this study have shown that the relationships between knowledge-
based leadership variables, knowledge management and innovative practices have been confirmed, and
there was a significant correlation between all variables. Also, after examining the relationship between
knowledge-based leadership and knowledge management and innovation performance in the gover-
norate of Fars, the main hypothesis was confirmed. From the perspective of respondents, the variable
of knowledge-based leadership and knowledge management were the first variables in this part. The
hypothesis is confirmed and maintained the strongest meaningful relationship with the variable of
knowledge management. From the perspective of variable respondents, innovation performance is the
second variable introduced in this part of the hypothesis and had a meaningful relationship with the
leadership variable and knowledge management. The results of research data analysis also indicated
that the effect of knowledge-led leadership and knowledge management and innovation performance
had a coefficient of 0.7081, with a critical value of 4.151>1.96. It can therefore be stated that the null
hypothesis could be rejected with 95% confidence. In other words, knowledge-based leadership and
knowledge management and innovation performance had a statistically significant effect. Therefore,
this hypothesis was accepted and there is a relationship between knowledge-based leadership and
knowledge management and innovation performance in the governorate of Fars. The test result of this
hypothesis was consistent with the results of study proposed by Yang et al. (2014) and Donate and de
Pablo (2015).
Considering the results obtained in the main hypothesis and confirming the hypothesis that there was a
relationship between knowledge-based leadership and knowledge management and innovation perfor-
mance in the governorate of Fars, it is suggested that managers of organizations emphasize knowledge
acquisition and production. It also encourages employees to influence the production, storage, and
transfer of tacit and explicit knowledge by encouraging employees to document their skills in infor-
mation systems and facilitate the transfer of information to other parts of the organization, also through
support and the process of sharing knowledge in the organization, and removing the barriers to sharing
knowledge in the organization.
Also, according to the results obtained in the first hypothesis and the confirmation of the hypothesis
there is a relationship between knowledge leadership and knowledge management functions in the gov-
ernorate of Fars. It is suggested to provide an appropriate atmosphere among managers and staff to
discuss working methods and practices, and to facilitate and justify the issues of internal decision mak-
ing. Also, according to the results obtained in the second hypothesis, and the confirmation of the hy-
pothesis that there was a relationship between the functions of knowledge management and the perfor-
mance of innovation in the governorate of Fars, it is suggested that attention be paid to staffing issues
in order to promote knowledge management and innovative performance by holding various training
courses and workshops. On the other hand, according to the results obtained in the third hypothesis and
confirmation of the hypothesis there was a relationship between knowledge leadership and innovation
performance in the governorate of Fars; it is suggested that the organization initially create the behav-
ioral and cultural platforms for innovation; and only in such enabling environments will the organiza-
tion be able to innovate in its proper innovative manner. Also, according to the results of the fourth
hypothesis and the confirmation of the hypothesis there was a relationship between knowledge-based
leadership through the functions of knowledge management and innovation performance in the gover-
norate of Fars and it is suggested that, the present knowledge of leadership and its management are
considered as an important and priority goal. The organization should invest in different flows of or-
ganizational knowledge and leadership in accordance with its priority in terms of speed and quality of
innovation and service and operational performance.

Acknowledgement
The authors would like to thank the anonymous referees for constructive comments on earlier version
of this paper.
 A. Sadeghi and F. Mostafavi Rad/ Management Science Letters 8 (2018) 159

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