Organizational culture’s influence on knowledge transfer in the service industry of Bangladesh

Contents1. Introduction.............................................................................................................................................3

2. Literature review.....................................................................................................................................4

2.1 Knowledge Transfer...........................................................................................................................4

2.2 Organizational Culture.......................................................................................................................5

2.2.1 Collaboration..............................................................................................................................6

2.2.2 Learning and Development.........................................................................................................6

2.2.3 Top Management Support..........................................................................................................7

2.2.4 Organizational Citizenship..........................................................................................................7

3. Research methodology............................................................................................................................9

4. Results...................................................................................................................................................10

Demographic Information:....................................................................................................................10

Reliability Analysis.................................................................................................................................11

Regression analysis................................................................................................................................12

Descriptive statistics..............................................................................................................................13

Correlation Analysis:..............................................................................................................................14

5. Discussion..............................................................................................................................................15

6. Limitations and Future Work.................................................................................................................17

7. Conclusion.............................................................................................................................................17

References.................................................................................................................................................19

Abstract

Purpose - This paper attempts to examine how organizational culture influence knowledge transfer.

Design/methodology/approach - This study is based on quantitative research, administering around 50 managerial staff in well renowned corporations in the service industry of Bangladesh.

Findings - The paper explains the role of organizational cultural on knowledge transfer process in the service industry. Learning and development, top management support, collaboration, organizational citizenship are positively related to knowledge transfer.

Research limitations/implications - The outcome of this research provides useful indications of how organizations can work to ensure knowledge transfer within their work place. The findings will help the organizations to create appropriate environment of knowledge transfer. However, the research is limited to organizations in Dhaka only. Furthermore, similar research can be extended to organizations in other countries with a larger sample which may bring more statistical power and thereby, increases generalization.

Originality/value - While the links between organizational culture and knowledge transfer have been examined independently, few studies have investigated the association between these two concepts. This paper examines the nature of this relationship and presents empirical evidence, which suggests that organizational culture influences the process of knowledge transfer in the service industry of Bangladesh.

1. Introduction

In today’s knowledge-driven economy, organizations acknowledge knowledge as a strategic resource which is trasnfered and created to ensure a sustainable competitive advantage (Zhang and Jasimuddin, 2008; Howell and Annansingh, 2013; Jasimuddin, 2007). Knowledge management is an integrated process that collects, stores and disseminates knowledge in an organization.

Although transfer of knowledge among organizational employees is encouraged (Jasimuddin and Zhang, 2011), knowledge transfer is not straightforward. For example, tacit knowledge is more difficult to transfer than explicit knowledge which can be easily disseminated to a large number of people (Ling et. al, 2009; Jasimuddin et. al, 2005). The topics surrounding organizational culture have attracted considerable interest among both academics and practitioners within knowledge management field (Zheng et al., 2010; Liao et al., 2011; Wiewiora et al., 2013; Islam et al., 2012; Jasimuddin et al., 2005). Zheng et al. (2010), for example, study examines the mediating role of knowledge management in the relationship between organizational culture, structure, strategy, and organizational effectiveness, suggesting that knowledge management fully mediates the impact of organizational culture on organizational effectiveness, and partially mediates the impact of organizational structure and strategy on organizational effectiveness. However, the notions of organizational culture and knowledge transfer have been frequently discussed but the previous studies rarely combined them. We know very little about how organizational culture influences knowledge transfer. Hence, the paper will focus on the influence of organizational culture on knowledge transfer.

The primary aim of this paper is to present a theoretical model and empirical analysis of the relationship between organizational culture and knowledge transfer. In the next section, we review the relevant literature and develop hypotheses. We then describe the methodology adopted in this research, followed by an analysis of the findings. The subsequent section discusses the empirical results. Finally, we conclude with the directions for future research, and theoretical and managerial implications.

2. Literature review

This section rigorously reviews the relevant literature to propose a research model which posits that the characteristics of organizational culture’s influence on knowledge transfer in the context of the organizations in the service industry based in Dhaka, Bangladesh.

2.1 Knowledge Transfer

Knowledge transfer among employees in an organization is widely regarded as a crucial component in business (Szulanski, 2000; Jasimuddin, 2012). Jasimuddin (2006), for instance, contends that knowledge transfer is important for enhancing the competitive advantage of an organization. The Jasimuddin’s argument (2006) is developed by Cohen and Levinthal (1990) who suggest that knowledge transfer is a critical factor for a firm’s ability to respond to changes, innovate and achieve competitive success. Drawing on the social capital theory, it can be argued that knowledge transfer between individuals is contingent upon social interaction which is vital for making any successful decision (Adler and Kwon, 2002; Nahapiet and Ghoshal, 1998; Kostova and Roth, 2003). In line with this, Teh and Sun (2012) argue that knowledge transfer is a process of exchanging knowledge, experiences, and skills through social interaction within a department or organization. Parallel to this, Dyer and Nobeoka (2000) define knowledge transfer as the activities of how organizational members exchange their knowledge to improve organizational learning capacity, stimulate the creation of new knowledge, and eventually enhance its competitiveness. An attempt can be made to provide a working definition of knowledge transfer for the purpose of the present research: Knowledge transfer within an organization is an act of transmission of organizational knowledge among employees so that they can take purposeful actions and involve in innovation. However, the motivation of knowledge transfer is not straightforward (Jasimuddin et. al., 2006). Wang et al. (2014) investigate how to motivate knowledge transfer in an organization, arguing that knowledge transfer will be greater for employees who are encouraged, evaluated and rewarded. Keong and Al Hawamdeh (2002) observe that knowledge is power and no one is willing to give it away freely. In this regard, others (Davenport and Prusak, 1998; Liao et al., 2011; Gibbert et al., 2002) contend that leadership, organizational structure, and

organizational culture are critical success factors for knowledge transfer. These issues will be elaborated in turn.

2.2 Organizational Culture

A knowledge supporting culture is one of the most important conditions to ensure efficient knowledge flow among organizational members (Kazi, 2005). From a constructivist perspective, organizational culture can be viewed as a continuous process of building/rebuilding identity in and around an organization (Tuan, 2012). This, in turn, facilitates social integration among members which helps the organization sustain as a whole, assimilating different subgroups within its environment (Koot, 2004). Appropriate organizational culture is pre-requisite for knowledge creation and dissemination. Several authors (e.g., Wiewiora et al., 2013; Ajmal and Koskinen, 2008; De Long and Fahey, 2000) also comply with these facts that culture establishes an organizational context for social interaction and creates norms regarding what is ‘right’ and ‘wrong’.Culture may also act as a barrier to knowledge transfer (McDermott and O’Dell, 2001). Diverse cultures at the intra-organizational, organizational, trans-organizational and supraorganizational levels may act simultaneously, and thus result in cultural complexity (Sackmann and Friesl, 2007). Most specifically, employees’ resistance to change, their motivation to transfer knowledge and leadership commitment are also affected by the cultural dimensions (Davenport and Prusak, 1998). Therefore, a pertinent culture should be established to encourage people to transfer their knowledge within an organization as well as among business partners (Rivera-Vazquez et al., 2009). Innovative organizations create competitive advantages through fostering learning and development, asking people to collaborate, and allowing them to share power by practicing participative decision making (Hurley and Hult, 1998). Although there are various characteristics of culture that affect knowledge transfer, this study focuses on three characteristics: collaboration, learning and development, and top management support.

2.2.1 Collaboration

The role of collaborative tools to support social construction of knowledge is evident in organizations around the world (Ryan et al., 2010), and the inclusion of knowledge management as an organization’s best practice is meant to ensure that collaboration is institutionalized, and that knowledge transfer occurs (Rivera-Vazquez et al., 2009). Collaboration refers to how people in an organization actively assist and support in work-related issues. Several studies (e.g., Parker and Price, 1994; Eisenberger et al., 1990; Hurley and Hult, 1998; Krogh 1998, Nahapiet and Ghoshal 1998) also find the relationship between collaboration and knowledge transfer. Hence, we hypothesized that:

H1: Collaboration has positive relationship with knowledge transfer.

2.2.2 Learning and Development

Learning and development orientation refers to the extent to which an organization is willing to encourage its members to learn and develop themselves for long-term success. This is due to the fact that organization relies largely on its employees’ skills and knowledge in order to produce breakthrough in its products and services (Tidd et al., 1998). Several authors (e.g., Yang, 2007; Jones et al., 2003) contend that there is a relationship between learning process and knowledge transfer. Organizations facilitate learning process through transfer knowledge among organizational member. Therefore, we have formulated the following hypothesis:

H2: Learning and development orientation has positive relationship with knowledge transfer.

2.2.3 Top Management Support

Top management support within an organization through leadership skills acts as a role model in which knowledge transfer occurs without any coercive influence. Several scholars (e.g., Kerr and Clegg, 2007; Jasimuddin et al., 2006; Islam et al., 201l) contend that leaders play an important role in organizational knowledge transfer. Others (e.g., Bircham-Connolly et al., 2005; Seba et al., 2012) emphasize on the pivotal role of leadership in knowledge transfer. Leaders firstly, contribute to employees’ learning from their personal experience; secondly, persuade employees to transfer their knowledge in order to generate new knowledge; thirdly, they influence decision making process based on valuable knowledge transfered between members. Parallel to this, Kennedy and Mansor (2000) also find that top management support has an impact over knowledge transfer activities. We, therefore, hypothesize that:

H3: Top management support has positive relationship with knowledge transfer.

2.2.4 Organizational Citizenship

The highly competitive environment urges organizations to search for new ways of gaining sustainable competitive advantage. After it was found out that technological-, structural- and capital-based assets are insufficient for getting the desired result, attention was drawn to human factor. However, it is not enough for the employees to carry out the defined role requirements in order to gain sustainable competitive advantage. In this respect, organizational citizenship behavior (OCB), which is believed to increase the performance of the employees, and therefore the organization, is among the leading issues that draws the most attention in the fields of organizational psychology, organizational behavior and human resources. The relationship between knowledge transfer and organizational citizenship have been the subject of the scores of diverse studies in the literature. The interest in the issue is growing particularly because of the fact that both terms occur as a result of interactions among the employees and they increase the performance. Whether organizations can achieve sustainable competitive advantage depends on the precondition that they must attain their defined performance/success aims. When the organizations achieve this, the need for

the behaviors as part of OCB arises. In this respect, it is obvious that knowledge transfer will have a positive effect on the organizational performance directly or indirectly due to its definition. When the relationship between organizational citizenship behavior and trust within the organization (Wech, 2002, p. 354) is considered, naturally it will be assumed that there is a relationship between OCB and knowledge transfer. Connelly and Kelloway have found out that social interaction reinforces the perception of knowledge transfer culture but technology does not have such an effect, in their study where they evaluated various factors that possibly impinge on the perceptions of knowledge transfer culture in an organization (Connelly & Kelloway, 2003, p. 298). This finding show that not material factors but social and psychological factors and human relations are decisive in accomplishing knowledge transfer. OCB is a significant topic to be evaluated in this respect. There are studies, though in limited numbers, that measures the relationship between the two terms. Mogotsi (2009, p. 136) has reached the conclusion that there is a positive correlation between knowledge transfer and OCB and has reached the inference that knowledge transfer is a type of OCB. Connelly and Keloway (2003, p. 294) even concluded that knowledge transfer and OCB are similar behaviors. We, therefore, hypothesize that:

H4: Organizational Behavior has positve relationship with knowledge transferFigure 1: A conceptual model of knowledge transfer

Model Framework

From the existing studies on the determinants of knowledge flows from the organizations, we infer that organizational culture are preconditions for knowledge transfer. The theoretical framework suggested in this study draws the relationship between organizational culture and knowledge transfer. The paper develops 4 hypotheses regarding these concepts.

3. Research methodology A regression analysis is employed to test the hypotheses, using statistical software SPSS version 22. The source of data collection was different organizations in the service industry which is an effective vehicle for

Culture

Collaboration

Learning & Development Orientation

Top Management

Support

Organizational Citizenship

Knowledge Transfer

H1 – H4

knowledge transfer (Inkpen, 2008; Hong et al., 2009). A questionnaire survey was developed using the previous work and utilized for data collection. The questionnaire consisted of seven sections having measurement scale for collaboration, learning and development, top management support, organizational citizenship, and knowledge transfer. The primary means of distributing the survey questionnaire was visitng several organizations in the service industry of Bangladesh with a cover letter explaining the objectives of the study. The respondents of this study were managerial staffs who were also selected randomly from the organization based in Dhaka, Bangladesh. A total of 50 questionnaires were distributed, all of them were returned with a 100% response in terms of cooperation. All questionnaire items were assessed on a five-point Likert Scale -

Strongly Disagree

Disagree Uncertain Agree StronglyAgree

1 2 3 4 5

4. Results

Demographic Information:

The respondents’ demographic information is given above in the demographic table. The males were 72% and the females were of 28%. Educational background reveals that PHD holders were of 2%, Masters Degree holders were of 52% and Bachelors Degree consisted of 46%. 50% of the respondents were from 25 years to 35 years of age.

Table:01

Reliability Analysis

Demographic Information

Demographic Information

The internal reliability can be tested using Cronbach’s alpha (Fornell and Larcker, 1981). Hence, Cronbach’s alpha ( ) reliability estimates were used toα measure the internal consistency of these multivariate scales (Nunnally, 1978). Table 2 shows the reliability assessments for independent variables, moderating variable and dependent variable to test the internal consistency. The reliability analysis indicates the degree to which items in each set correlate with one another. Cronbach’s alpha ( ) was used to establish thisα inter-item consistency. The Cronbach alpha ( ) should be greater than 0.5 toα indicate a strong reliability for a questionnaire content (Nunnally, 1978; Cuieford, 1965). In this study, the Cronbach of the majority of constructsα was greater than 0.50.

Table:02

Summary of Reliability Analysis

Regression analysis

Regression analysis was carried out to test the relationship of the dimensions of organizational culture and structure with knowledge transfer. The first regression models involve organizational culture and organizational structure as independent variables and knowledge transfer as the dependent variable. This regression analysis was conducted to test Hypotheses 1 to 5. The coefficient of determination R² is 0.274. The R2 indicates the fraction of total variance in the endogenous construct accounted for by those exogenous constructs (Chin, 1998; Mathieson et al., 2001). Overall, a substantial amount of variance is explained in the endogenous variable, knowledge transfer. In Table 3, the coefficient of determination R² (0.274) indicates that organizational culture and structure variables explain 27.4% of the variance of knowledge transfer. The finding of the study rejects the entire hypothesis except H1 that is of Collaboration.

The reliability analysis indicates the degree to which items in each set correlate with one another.

The Cronbach Alpha should be greater than 0.5 to indicate strong reliability for a questionnaire content.

Table:03

Descriptive statistics

Descriptive statistics of all the variables concerning the current research are shown. Descriptive statistics include mean and standard deviation. The mean for knowledge transfer (3.7400 ; SD = .45221) indicates that knowledge transfer is presents among the service industry employees at moderate levels. The mean for collaboration between employees or staffs (3.7920; SD = .42563) implies that collaboration process are at high levels . The mean learning (3.6400; SD =.57475) represents that learning is available in the service industry at mild levels. The mean of top management support (3.6200; SD = .73928) implies that top management support is present in the industry at low leves. And the mean for organizational citizenship (3.1055, SD = .44093) indicates is present in the industry at moderate levels.

Regression Summary

R2 = 0.274Sig. = 0.000

The regression analysis was conducted to test Hypothesis 1 to 4. The coefficient of determination R2 (0.274) indicates that independent variables explain 27.4% of the variance of knowledge transfer.

Table:04

Demographic Variable

Mean Standard Deviation

N

Knowledge Transfer

3.7400 .45221 50

Collaboration 3.7920 .42563 50

Learning 3.6400 .57475 50

Top Management support

3.6200 .73928 50

Organizational Citizenship

3.1055 .44093 50

Correlation Analysis:

Correlations are measured for the relationship among two variables, exploring the relationship among variables specially relationship between independent and dependent variables and to make correlation analysis go through with all variables. The value of correlation coefficient ranging from -1 to 1. Strong correlation between variables are indicated when the value are found closer to absolute 1. The bivariate correlation practice was a subject to a one tailed statistical significance at two different levels, starting with highly significant (p < .01) and significant (p < .05). All data collected from the survey are analyzed through correlation and results are shown in the table below. This analysis is used to illustrate the existing relationship among the study variables (Collaboration, Learning, Top Management Support, Organizational citizenship and Knowledge Transfer). From the table below in can be implied that Knowledge transfer is most significantly correlated with collaboration (r

Summary of Descriptive Statistics

= 0.000, p < 0.05), Learning with Top Management Support (r = 0.012, p < 0.5) and organizational citizenship with collaboration (r = 0.016, p < 0.05). Knowledge transfer is most insignificantly correlated to organizational citizenship (r = 0.189, p > 0.05), Collaboration with Top Management support (r = 0.474, p > 0.05), Learning with Organizational Citizenship (r = 0.85, p > 0.05).

Table:05

5. Discussion This study attempts to extend our understanding of the relationship between organizational culture and knowledge transfer by adding collaboration as a moderator in their relationship. We propose and test an integrated framework in which organizational culture is treated as the key factors that influence knowledge transfer, and collaboration moderates such relationship. The outcome regarding the relationship between collaboration and knowledge transfer found in the organizations in the service industry of Bangladesh could be interpreted from different angle. It is possible that people within an organization believe in the principle of knowledge hoarding, what Hansen (1999) identifies the fear of losing power. The notion explains individuals' unwillingness to transfer knowledge with others as they believe

Summary of Correlation Analysis

their acquired knowledge is valuable and necessary for their personal benefits (e.g., job security, career progression). This is quite a normal tendency of individuals and the opposite may be true when they perceive that their colleagues and managers are supportive what Jasimuddin et al. (2006) term it as ‘reciprocity’. Learning and development orientation is found to have the next most significant relationship with knowledge transfer. This result also confirms the previous studies (Islam et al., 2008; Yang, 2007). From the organizational perspective, learning and development orientation is a prerequisite for long-term success in knowledge cultivation. Learning through transfer knowledge among organizational members can bring in benefits for an organization (Yang, 2007; Jones et al., 2003). First, it enables employees to reflect on the consequences of their behaviors and actions. Second, it augments the ability to approach to organizational problem more accurately by understanding the environment, obtaining insights from the place where they operate. That is why organizations rely largely on its employee skills and knowledge so as to produce breakthrough in its products and services through continued learning (Tidd et al., 1998).

This paper makes several contributions to the literature. The contribution of this paper is twofold. Firstly, we contribute to the conceptualization of the organizational culture as the important aspect of knowledge transfer. Prior work has typically studied the effect of organizational culture and organizational structure on knowledge transfer, which this study confirms. While many studies have focused isolated on the importance of organizational culture (Sackmann and Friesl, 2007; Rivera-Vazquez et al., 2009) and organizational culture and organizational structure (Chen et al., 2010; Willema and Buelensa, 2009) for knowledge transfer, this paper brings them together to explain their linkage, and quantify the relationship.

Hence, the paper goes beyond the conventional finding to provide new insights. Although the paper does not develop a new theory, we hope it will motivate scholars and practitioners to engage with the issues in different ways than they have in the past.

6. Limitations and Future Work

The results of this research must be interpreted in the context of its limitations, requiring additional research. First, the data was collected from a sample of organizations in the service industry within Dhaka only. It is possible that the results could vary in other organizational contexts. Future work would also investigate the differences in antecedents of knowledge transfer in local organizations and in other industry sectors. Further, the findings could vary in different countries due to the influence of national cultural factors. Cross cultural validation would allow the impact of culture on knowledge transfer behavior to be revealed. Hence, we believe that the results may be extended to organizations in other Asian countries with similar economic and infrastructure conditions. Second, based on a sample of 50 respondents, several significant results have been obtained. However, a larger sample that brings more statistical power would have allowed more sophisticated analysis and thereby, increases generalization. Moreover, this study did not consider all determinants that facilitate knowledge transfer. Social dimension of knowledge transfer is an important area that may help understand why employees transfer what they know and what they are transfering (Widén-Wulff, G. (2014). Other than those prescribed may also affect knowledge transfer in an organization. For instance, other factors associated with the social capital theory (e.g., trust) could be examined in future research. Furthermore, the knowledge characteristics were not taken into account in the research model. Additional research is warranted to incorporate tacit and explicit knowledge in understanding the notion of knowledge transfer.

7. Conclusion In today’s business world, knowledge is considered as vital resource in formulating appropriate competitive strategies so as to ensure successful performance of organizations. As knowledge transfer is thought to be a powerful source of gathering knowledge and creating competitive advantage, it is desirable for companies to adopt an environment where proper knowledge flow can be assured. Generally speaking, knowledge transfer activities are dependent on organizational culture. The current study explains the role of organizational cultural on knowledge transfer process in organizations in the service industry of Bangladesh, Given its results, this study provides some useful suggestions for managers. The outcome of this research provides useful indications of how organizations can work to ensure

knowledge transfer within their work place. This study helps organizations to be aware of the issues related to knowledge transfer. Most specifically, the finding will help the organizations to create appropriate environment within their surrounding knowledge to trasnfer. As mentioned earlier, the research framework postulated in this study contributes to the knowledge management practice, particularly knowledge transfer, in several ways. As mentioned earlier this study has some contributions towards the literature since it examined the relationship between organizational culture and knowledge transfer practices in the service industry context. More specifically, this has been reflected and evidenced in the study revealing the relationships between learning and development, top management support, collaboration, organizational citizenship and knowledge transfer behavior. Since various organizations require distinct types of approaches to knowledge transfer due to the size, people, financial capability, etc., knowledge transfer requires a major change in organizational culture and commitment at all levels of employees, especially from the top management (Gupta and Govindaranjan, 1991). The findings of this study will help organizations to better understand the need for creating a better knowledge transfer culture. Furthermore, managers may also utilize the findings of this study in formulating and reviewing knowledge transfer strategies.

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