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Journal of Business Research 63 (2010) 763–771

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Journal of Business Research

Linking organizational culture, structure, strategy, and organizational effectiveness:
Mediating role of knowledge management
Wei Zheng a,⁎, Baiyin Yang b,1,2, Gary N. McLean c,3
a
Human Resource Development, Department of Counseling, Adult and Higher Education, Northern Illinois University, Gabel Hall 201E, Northern Illinois University, DeKalb, IL 60115, United
States
b
Department of Human Resources and Organizational Behavior, Tsinghua University, Mailing Address: Haidian District, Beijing, 100087 China
c
Department of Work and Human Resource Education, Texas A&M University, United States

a r t i c l e i n f o a b s t r a c t

Article history: Practices of knowledge management are context-specific and they can influence organizational effectiveness.
Received 1 February 2008 This study examines the possible mediating role of knowledge management in the relationship between
Received in revised form 1 March 2010 organizational culture, structure, strategy, and organizational effectiveness. A survey was conducted of 301
Accepted 1 June 2010
organizations. The results suggest that knowledge management fully mediates the impact of organizational
culture on organizational effectiveness, and partially mediates the impact of organizational structure and
Keywords:
Knowledge management
strategy on organizational effectiveness. The findings carry theoretical implications for knowledge
Organizational culture management literature as they extend the scope of research on knowledge management from examining
Organizational structure a set of independent management practices to examining a system-wide mechanism that connects internal
Organizational strategy resources and competitive advantage.
Organizational effectiveness © 2010 Elsevier Inc. All rights reserved.

The internal characteristics of the organization make up critical lower costs (Skyrme and Arnindon, 1997). In turn, knowledge manage-
sources for success (Barney, 1991). Increasing attention has been paid to ment is context-specific, because context determines who participate
identifying what characteristics are vital to organizational success and and how they participate in the knowledge management process
how they exert their influence on organizational outcomes. Internal (Nonaka et al., 2000). Knowledge management could serve as one of the
organizational context focuses on broad and relatively stable categories intervening mechanisms through which organizational context influ-
of organizational characteristics such as structure, culture, and power ences organizational effectiveness. However, the mediating role of
and political characteristics (Pettigrew, 1979). They constitute an knowledge management has not been adequately investigated. Explora-
environment where organizational activities take place. There has tion of its potential role as a mediating factor would provide better
been a large volume of studies that examine how the fit between understanding of how to leverage it to achieve desirable organizational
organizational context and organizational strategy explains variances in goals. This study sets out to do that.
organizational performance (Daft, 1995; Robbins, 1990). What is lacking The purpose of this study is to examine the possible mediating effect
in existing literature, though, is an understanding of the intervening of knowledge management on the relationship between organizational
mechanism that explains the paths of the influence from organizational culture, structure, strategy and organizational effectiveness. This study
context and strategy to organizational effectiveness. attempts to detect and explain one of the mechanisms through which
Knowledge management plays a potentially mediating role in con- organizational contextual and strategic factors are mobilized to achieve
necting organizational context and strategy with organizational effec- higher levels of organizational effectiveness.
tiveness. Successful knowledge management is believed to have the
potential of enhancing an organization's competitive advantage,
customer focus, employee relations and development, innovation, and 1. Rationale

Knowledge management is “a systematic and integrative process
⁎ Corresponding author. Tel.: +1 815 753 9314; fax: +1 815 753 9309. of coordinating organization-wide in pursuit of major organizational
E-mail addresses: wzheng@niu.edu (W. Zheng), yangby@sem.tsinghua.edu.cn goals” (Rastogi, 2000, p. 40). Scholars generally agree that knowledge
(B. Yang), gmclean@tamu.edu (G.N. McLean). management practices need to fit with organizational context in order
1
Tel.: +86 10 62796314.
2
Baiyin Yang was supported by the National Natural Science Foundation of China
to create a competitive edge (Davenport and Prusak, 1998).
(Project #: 70725005). The literature on the possible mediating role knowledge manage-
3
Tel.: +1 612 624 4901. ment plays reveals several important missing pieces. First, existing

0148-2963/$ – see front matter © 2010 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2010.06.005

www.Prozhe.com

www. information. 1996). and technology Knowledge management encompasses the managerial efforts in facil- that are directly related to knowledge management. mentioned missing pieces in literature. The resources created. made sense of. 1995.Prozhe. 1991). It is time to construct a more complex How well knowledge is managed contributes to organizational picture of how organizational structural. but also a medium between organizational The resource-based view posits that firm competitiveness comes factors and effectiveness. sharing. Prahalad and Hamel. these utilize knowledge is the most important source of a firm's sustainable studies usually start from a micro perspective and investigate the competitive advantage (Grant. organizational level strategy has not been mentioned. and utilized in accordance with a set of cultural a firm possesses include management skills. 2004). For example. organizational processes values and norms. oping. the overall success. organizational knowledge reflective of cultural. 2003). Nonaka. In the list of antecedents of knowledge 1998). 1998). Watkins and Organizational effectiveness is “the degree to which an organization Marsick. also called knowledge application or management. the connection between knowledge management and organizational effectiveness. 2001. and management processes and organizational effectiveness has not been increased software development efficiency (Tiwana. sharing. and deploying knowledge by individuals and groups (Demerest. Knowledge generation refers to the process in which knowledge is may have underestimated the actual influence of knowledge manage. firm attributes. and enhance effectiveness resource-based view (Conner and Prahalad.3. refers to the process by which organizational effectiveness. In this study. structure. Knowledge management (including knowledge generation. and strategic ness is an understudied question. storing. Knowledge utilization. structural and cultural factors. 1997.. structural. diffusing. both Gold et al. More these and other studies. 1991. The organizational effectiveness were adopted from Lee and Choi (2003) demonstrated relationship may be biased because some potential which encompass organizational members' perceptions of the degree of correlates of organizational strategy and those of knowledge manage. The restriction to only knowledge. and the information and knowledge it controls (Barney. profitability. / Journal of Business Research 63 (2010) 763–771 studies cover some ground of the contextual antecedents of knowledge based view of the firm holds that the firm's capability to create and management (Gold et al. 1990. immediate knowledge-related environment rather than the general 1991. and strategy. The intersection of the resource-based view and the knowledge- based view of the firm lays the theoretical grounding for this study. This study knowledge management is a set of relatively independent managerial examines three processes that have received the most consensus: practices rather than a central mechanism through which organizational knowledge generation. organizational affected by cultural expectations such as what knowledge should be processes. and ment have not been taken into consideration. This study attempts to address the above. istics of the whole organization. it is hypothesized that knowledge management studies are necessary. Theoretical background and hypotheses knowledge sharing. market share. confirm a significant linkage between knowledge management and Third. Knowledge integration could lead to product development difficult (Lee and Choi. such as organizational innovativeness of the organization in comparison with key competitors. characteristics of the organization is utilized to help produce new The knowledge-based view of the firm is at the center of the products and services. knowledge.Prozhe.. 2.. improve efficiency. embedded in structural relationships. in the contextual environment of the whole organization. and others. and by strategic priorities such as extensively in their association with organizational effectiveness. cultural. knowledge implementation.2. 2004). organizational strategy has generally been left out in groups. and reflected in and routines. Knowledge sharing. controlled by a firm (Daft. how they pass their influence onto organizational effective. or from one group to another group (Davenport and Prusak. culture. what knowledge is to be paid attention to and what to be ignored. acquired by an organization from outside sources and those created from ment. Lee and Choi. 96). However. The knowledge. In turn. Some empirical studies and ultimately organizational effectiveness. 2. Epple et al. edge management (Pedler et al. They focus on current economy. and knowledge utilization) relates positively to organizational effectiveness. 1992. Knowledge management and organizational effectiveness ness. Kogut and Zander. reduced defect density. Knowledge resources are an outcome of from unique bundles of tangible and intangible assets that are valuable. because knowledge is rare. However. Specifically. Zheng et al. 2. refers to the process that is oriented toward Few studies examine how organizational strategy can influence knowl.1995. the one exploring the antecedents of knowledge management rather than sure source of lasting competitive advantage is knowledge” (p. 1990). “It is what the organization comes to know that explains characteristics exert a combined effect on knowledge management its performance” (Argote and Ingram. Based on adequately studied (Davenport and Prusak. measuring knowledge management is 2002). 1995). structure. 2003). 2000). Nonaka (1991) observes that. 98). and by structural relationships such as how quickly the knowledge flows strategy are three key organizational assets that have been studied through formal reporting relationships. Shin. and sustainable (Barney. 2001. imperfectly imitable. 1998. For example. 1996).com . capabilities. measures assessing between organizational strategy and knowledge management. lowered warranty defects.. growth rate. Mediating role of knowledge management 2. creating. 1996. but only a simplistic relationship has been examined realizes its goals” (Daft. knowledge creation and organizational level performance has not been sufficiently established. 2000). Grant (1996) suggests that the challenge of the www. positively contributes to organizational effectiveness.1996. (2001) and Lee and Choi (2003) examine the aspects of organizational culture. as shared with the organization and what should be hoarded by individuals. the actual use of knowledge (Gold et al. p. Senge. Soliman and Spooner. knowledge is transferred from one person to another. also called its potential capacity to transmit contextual and strategic influence onto knowledge transfer or knowledge diffusion.. McEvily and Chakravarthy. from individuals to Second. Firm resources include all assets.com 764 W. structural. They did not itating activities of acquiring. devel- investigate the general cultural. and the relationship between knowledge effectiveness. where “the only certainty is uncertainty. organizational culture. 2001). knowledge sharing practices are 1991). and utilization (Davenport and Prusak.. Many frameworks for relevant structural and contextual factors reveals the assumption that knowledge management processes have been identified. knowledge management studies. and strategic effectiveness. sharing have been found to contribute to improved performance and Despite beliefs in the contribution of knowledge management to innovation (Darr et al. and technological character. Resource-based view and knowledge-based view Knowledge management serves not only as an antecedent to organizational effectiveness. This assumption 1998). This study takes a new perspective on knowledge management in within (Davenport and Prusak. organizational effectiveness. H1. Organizational structure. strategic priorities. Rowley.1. factors are leveraged to achieve organizational goals. 2000). examining knowledge management as a mediating mechanism between general organizational context and organizational effective. (Nonaka et al.

a decentralized structure has often been seen as level of participation by an organization's members in decision- facilitative to knowledge management success (Damanpour. and Stalker. because the way knowledge is organized. restructure shared new meanings. 1983). structures.'s (1999) study of the favorable influence The knowledge-based view emphasizes the importance in under- of flexibility on knowledge transfer ability. organizational tional members. 1985). and conditions is enhanced (Schminke et al. ity) and innovation. rather.. Wilkins and Ouchi. 1979. Ouchi and Jaeger. structure influences organiza- how new external and internal information is absorbed. Organizational culture is a source of sustained the majority of scholars have agreed that a decentralized organiza- competitive advantage (Barney. Organizational structure (centralization) relates negatively to vioral norms held by organizational members serve as a filter in the organizational effectiveness. Organizational effectiveness culture. and Davenport and Prusak's (1998) focus shaping patterns and frequencies of communication among organiza- on clarity of vision in knowledge management. 2001). consis- on the subject had greater say in decision-making than the designated tency. Dewar and Werbel. Peters and Waterman. and mission. Their influence on organizational effectiveness tasks and activities (Skivington and Daft. Zheng et al. 1992. Organizational culture-knowledge management-organizational at the top levels of the organization” (Caruana et al. 1990).1. Huber's (1991) argument that standing the processes through which organizations access and utilize consistency helps an organization to interpret new information across knowledge possessed by its individual members (Grant.. Deal making. Therefore. and decide on courses of knowledge management.. 18). It is found that a 1978. values. Apart effectiveness from a minority of studies that demonstrate a positive impact of high Organizational culture refers to shared assumptions. actions based on their new understandings. Organizational culture (adaptability. 2002). p. stipulating locations of decision-making. the behavior of organizational members.. Further. Adaptability refers to the degree to authority (Burns and Stalker. Gold et al. In decentralized structure encourages communication (Burns and particular. The whole process is conditioned by organizational culture. and integrated into an organizational memory. Knowledge management fully mediates the relationship between among organizational members as their knowledge is specialized and organizational culture and organizational effectiveness. Organizational strategy-knowledge management-organizational effectiveness H3.. Knowledge management practices capture the process of tional performance. ethical behavioral. because of their minimal involvement of active meanings. Rapert and Wren. between organizational structure and organizational effectiveness. 1990.com W. It influences organizational effectiveness through non- constitute the sense-making mechanism where organizational mem- knowledge related functions. involvement. and systems. dimension is centralization (Rapert and Wren. 1999).Prozhe. 1985) that have a bearing on organizational effectiveness. 2000). 1995. H5. tional culture and knowledge management. decentralization facilitates internal includes Brockman and Morgan's (2003) finding of the positive communication (Bennett and Gabriel. needs to be integrated. consistency. Organizational culture (adaptability. H2. In an ambiguous and uncertain knowledge management activities are coordinated. Mission refers to the existence of a shared definition of the and Kennedy. values. the sense-making mechanisms entailed in knowledge H6. 1991). 1998. and involvement) relates positively with organizational effectiveness. 1961). Denison and Neale. despite inconclusive findings regarding the Consistency refers to the extent to which beliefs. and the extent to world. systems in order to survive in the wake of environmental changes. Involvement refers to the ment (Tsai. Gordon and Di Tomaso. reduces Existing literature implies a positive relationship between organiza- the opportunity for individual growth and advancement (Kennedy. High centralization inhibits organization's purpose. Organizational structure-knowledge management-organizational within the domain of organizational design (Grant.com . Denison. Young et al. and strategy constitute critical dimensions of Organizational structure indicates an enduring configuration of organizational design. bers render meanings to new data and information. 2001). units. Floyd and Wooldridge. because the values and beha. 2. structure. and self-confidence H7. consistency. 1977). Centralization refers to “the extent to which decision-making power is concentrated 2. 1982. mission. 1996). www. tional effectiveness through channels other than knowledge positioned. share alternative tasks. 1990. www. experts are conducive to organizational effectiveness: adaptability. 1982. Organizational culture does not directly lend its influence on orga- Knowledge management can carry over the structural impact onto nizational effectiveness. digested. 1992. 2003) (Dewar and Werbel. sense-making and meaning-construction processes (De Long and Fahey. and responsiveness to market which an organization has the ability to alter behavior. At the same time. consistency. competitive environments to achieve organizational goals” (Daft. 1971). Denison and his colleagues (Denison. 1998. Evidence of the positive 1983). and prevents imaginative solutions to problems (Deal and contribution of adaptability. job stress. 1985). 1961) and increases employee satisfaction and motivation Mishra. identified and validated four dimensions of organizational culture that free flow of lateral and vertical communication is encouraged. Schminke et al. involvement. norms (Schein. 1991.3. adoption of innovation relationship between entrepreneurship (which incorporates adaptabil- (Miller. 1995. interactions among organizational members (Gold et al. 2000).1996). especially through routinized processes. A most studied may be channeled through their interface with knowledge management. In a similar vein. because in less centralized environments.3.. 1996. 1961.2. Knowledge management partially mediates the relationship (Posner et al.Prozhe. and affect- culture is positively associated with knowledge management. and higher levels of creativity (Khandwalla. Fey and Denison. and mission Kennedy. the most important part of decision-making is to digest the which knowledge management practices are embedded in the daily information from the environment to structure the unknown (Water- work processes influence the effectiveness and efficiency of organiza- man. 1982.. Denison and Stalker. and expec- relationship between organizational structure and knowledge manage- tations are held consistently by members.3. 1982). 1998). They management. mission. The division of tasks between individuals and departments and the specification of the interface between them lies 2. 1979). / Journal of Business Research 63 (2010) 763–771 765 knowledge-based view of the organization is effective coordination H4. This study uses this framework.3. O'Reilly's (1989) identification of the significant role of involve- Structure can influence knowledge management processes through ment in facilitating innovation. 2000). and centralization on organizational effectiveness (Ruekert et al. On the contrary. it exerts its influence through shaping organizational effectiveness. 1991) and empirical research shows tional structure is conducive to organizational effectiveness (Burns that it is a key factor to organizational effectiveness (Deal and Kennedy. ing efficiency and effectiveness in implementing new ideas. such as commitment. and Organizational strategy refers to “a plan for interacting with the involvement) relates positively with knowledge management. Organizational structure (centralization) relates negatively to management also serve as antecedents to other outcomes of culture knowledge management.

among which 218 were mail between organizational strategy (STROBE) and knowledge manage. Knowledge management partially carries the influence of were detected between the two samples (Wilks' lambda = 0. Deductions based on previous research suggest a positive association A total of 384 responses were received.2% at the learning organization. (2004) found that a stronger organizational strategy that is high have good knowledge of organizational members (Gilley and on analysis. 1990. www. knowledge management. Manvondo. The two-week cutoff was based on perceived as the organization's plan of creating and deploying knowl. 1977).5% at the non-management level.'s (2004) Fig. Bergeron HR professionals were chosen as the respondents because they usually et al.71). strategy. A MANOVA test was conducted on the mail and proactive approach to new learning and new markets in establishing a web-based survey results and no statistical differences were detected learning organization (Watkins and Marsick. futurity. Zheng et al. strategic.79. defensiveness. / Journal of Business Research 63 (2010) 763–771 p. Defensiveness refers to defensive behavior tional members' perceptions of the five constructs: organizational that is demonstrated through cost reduction and efficiency-seeking culture. 1999.. A mix of web-based and mail survey was carried out on the sample. tions reflected in key strategic decisions. strategy through defining what strategic knowledge is. futurity. 1986). 2004). 1989). Apart from the path organization has unique sets of cultural.Prozhe.45). 2000) and a realistic view of what the organizational with higher performance. defensiveness. such as participation in emerging industries. only these four dimensions are examined in this study. Analysis refers to the overall problem-solving posture that 3. The composite of the four dimensions characteristics are rather than what they should be. Organizational strategy can then be and the rest as late respondents. and 8. Hypothesized model. defensiveness.77.Prozhe.3% in the Fig.. defensiveness. were represented by the respondents.9% at the senior manage- (1990) stresses the ability to envision the future that is crucial to the ment level. H9. 26. Pedler et al. Rapert et al. futurity. To assess The knowledge-based view considers the firm as a set of knowledge nonresponse bias (Amstrong and Overton. p = 0. structure. 27. to changing environmental trends (Venkatraman. all responses assets and the role of the firm as creating and deploying these assets to received within the first two weeks were treated as early responses create value (Grant. Enterprise) framework is utilized in this study to represent organiza- H10.2%). tional effectiveness. 1996). Organizational strategy (analysis. Organizational strategy has been a central theme in the strategy H8.. Senge were at the middle management level. www. were in the service sector. 37. darajan and Fisher. Watkins and Marsick (1996) emphasize a supervisory level.4% analytical approach to strategy that contributes to learning. and proactiveness. and organiza- methods (Venkatraman.com 766 W. and guiding key knowledge exploitation The unit of analysis in this study is the organization as each efforts which could result in enhanced effectiveness. Seventy-one percent of them sharing schemes. futurity. and literature and is closely related to organizational performance (Govin. Futurity refers to temporal considera.com . 1989). (1991) highlight the importance of an constitutes a response rate of 24%. continuous searching for HR professionals who were members of two HR organizations in a market opportunities and experimentation with potential responses mid-western metropolitan area constituted the target response group. and Venkatraman's (1989) STROBE (Strategic Orientation of Business proactiveness) relates positively to knowledge management. 49). between the two samples (Wilks' lambda = 0. and proactiveness is associated Maycunich. Survey procedure and sample (Venkatraman. responses (56. Smith et al. The member base indicates the extent to which the organization realizes its strategic of the two organizations totaled 1585. A total of 301 organizations mance through other channels such as control systems and resource. 1 presents the ten hypotheses. No statistical differences edge assets. For example. knowledge management characteristics. structural. and 0.1. the observed pattern of responses received. relative emphasis on long- term effectiveness versus efficiency considerations at the present 3. strategy impacts organizational perfor. proactiveness) relates positively to organizational effectiveness. 1989).7% in manufacturing. 1996. 28. critical knowledge transfers. 1. and of knowledge management. Organizational strategy (analysis. 1996).8%) and 166 were web responses (43. directions rather than its intended strategies (Bergeron et al. Therefore. Method indicates the extent of tendency to search deeper for the roots of problems and to generate the best possible solution alternatives A self-administered survey was used to collect data on organiza- (Miller and Friesen. Six dimensions are incorporated in the framework but between organizational strategy and organizational effectiveness. Proactiveness refers to proactive behavior. coordinating p = 0. 1983). only four of the six dimensions are shown in Bergeron et al. study to be reliable and valid: analysis. Among the respondents. That ment. Knowledge management partially mediates the relationship tional strategy.

22 0.98 0.85 0. Measures assessing organizational culture were adapted from Denison and his colleagues (Denison.52⁎⁎ (0. 98).com W. ⁎⁎ p b 0. and thus provided evidences for the construct validity of the istics.000. The hypothesized model demonstrates a better model fit than the futurity.3. Structural models (1988). Table 2 shows the descriptives of the constructs. The scale measures to what extent an of the scales used in the study formed adequate measurement models organization is perceived to display the four dimensions of character. A sample item is between 100 and 1000. The hypothesized model was compared to the saturated structural Venkatraman's (1989) STROBE (Strategic Orientation of Business model (Alternative Model 1 where all paths relating to the constructs Enterprise) framework was utilized in this study to represent orga. It seems that common class correlation tests were conducted. Harman's one-factor test was Among the 301 organizations.86 0. Organizational structure was measured by centralization.88 0. 2003) that encompassed four functional dimensions: adaptability.96 0.24 1.03 5 b0. and the As this study utilized one self-report survey to collect data on all of remaining 2% over 100. The average Cronbach's alpha method bias is not a serious problem (Podsakoff and Organ. These five items used in Lee and Choi (2003) were adapted from Deshpande et al.01 0.2.60 164 0. Variables χ2 df p NNFI CFI GFI AGFI RMR Organizational effectiveness is “the degree to which an organiza- Organizational culture 164. the possible common method bias. 4.88⁎⁎ (0. p. 1995. Average scores were used for those orga.08 the degree of overall success.95 0. Instrument Survey items were adapted from existing instruments used in past 4. were to be estimated).3% between 1000 and 10. Fey and Denison. Denison and Mishra. following Konrad and Linnehan (1995) dents (ranging from two to five). defensiveness.23⁎⁎ − 0.85) Reliability coefficient alphas are presented in diagonal in parentheses. A scale measuring centralization was borrowed from Ferrell and Skinner 4. As the single informants 3. / Journal of Business Research 63 (2010) 763–771 767 Table 1 tries to develop thorough analysis when confronted with a major Evaluation of measurement models for the constructs used in the study. and the second fixing the path from rather than putting them into categories.97 0. the organization will be like in the future”.83⁎⁎ 0.79 0.000 and 100. Results from the confirmatory factor analysis demonstrated that all involvement. Organizational effectiveness 4.08 1 1 0.038 tion realizes its goals” (Daft. decision”. Data analysis could be seen as coming from a random selection of all responding organizations.89) 4.16⁎⁎ (0. (2001). 3. 46.01. measures Organizational structure 35.35 48 b0.18 1. KM effectiveness 402. it seems single informants are not likely to pose a Following Jöreskog and Sörbom (1989).93) 3.87 0.6% had an employee base of of the three knowledge management processes.0.98 0.79 0. to what extent “we have a shared vision of what measures.95 0.52⁎⁎ 0.03 87 b0.01 0. account for the majority of the variance (37%). 2–4. 13.21 −0. structural equation serious threat to the validity of the study.89) 5.82⁎⁎ − 0. Organizational structure 3. one fixing the nizational strategy. In order to assess the inter.79 5 b0. and the rest with single informants.com . common method bias may be present. growth rate. In addition.07 (0. Measurement models 1995.5% “matching sources of knowledge to problems and challenges”.2. In this study. Results research. Zheng et al. Table 1 shows the fit indices of the measurement models.94 0. intra. 1986). 22. 15.000.01 0. Items measuring knowledge management were modified from Gold et al. www. STROBE measures to what strategy to organizational effectiveness to zero (Alternative Model 3).60. In terms of size. matters have to be referred to someone higher up for a final answer”. extent the respondents perceive their organization's strategy as The three alternative models are shown in Figs.034 and innovativeness of the organization in comparison with key competitors.86 0. www.1. The reason why it was used instead of strategic path from organizational structure to organizational effectiveness to typologies is that it depicts the intensity of characteristics of strategy zero (Alternative Model 2). and proactiveness. Constructs M SD 1 2 3 4 5 1. displaying four characteristics including analysis. and mission.97 0.96 0.92 0. Denison and Neale. 36 of them had multiple respon.97 0. In order to assess nizations with multiple respondents. indicating that there is a generally acceptable inter-rater consistency among the multiple respondents. profitability.95 0.52⁎⁎ 0. Organizational culture 4.036 assessing organizational effectiveness were adopted from Lee and (centralization) Choi (2003) which capture organizational members' perceptions of Organizational strategy 148. accounted for 70% of the variance. A sample item is “my organization usually three alternative models because (1) it contains no insignificant paths Table 2 Descriptive statistics for the constructs used in the study (N = 301).13 0. which organizational scores on the variables. was 0. The results of the principal component factor Responses from the same organization were averaged to derive the analysis yielded 12 factors with eigenvalues greater than 1. conducted on the variables.5% between 1 and 100. 1996. The scale measures how centralized an organization is based on respondents' agreement with statements such as “even quite small The hypothesized model was tested with a nested-model approach. market share.88) 2.43⁎⁎ (0.043 Organizational effectiveness 37. the first factor did not rater reliability of the multiple respondents on the variables. 1990. assessing respondents' perception of the existence agricultural sector. (1993) and Drew (1997). as well as two alternative models.24⁎⁎ − 0.000. for example. Knowledge management effectiveness 4. Organizational strategy 3.01 0. between 10. and Simonin (1997).95 0. modeling (SEM) was conducted with the LISREL program. consistency.Prozhe.94 0. assessing confirmatory measurement models (factor analysis) and confirmatory structural models (path analysis).Prozhe.95 0. the variables.

Prozhe. Alternative Structural Model 1 (saturated model). p b 0. management (γ = 0. Knowledge management (r = 0. and (2) chi-square/df ratios in the alternative effectiveness was close to zero (γ = 0.01) between structure and knowledge management were both negative.07. However.01) had a negative relationship with for structure's negative influence on knowledge management but only organizational effectiveness. Alternative Structural Model 2 (no direct path between structure and OE). mediates the relationship between organizational strategy and Hypothesis 4 predicts that knowledge management fully mediates organizational effectiveness. In part.01) were both positively related to knowledge management.05). The findings supported this hypothesis. 3. p b 0. 4. possible explanation is that culture and strategy may have fully accounted and structure (r = −0. and 5. Table 3 shows the fit indices mediates the relationship between organizational structure and for all the structural models. p b 0. organization culture. Conclusions ness (β = 0. p b 0. Hypothesis testing influence on organizational effectiveness (γ = −0.71. p b 0.01). relationship between structure and organizational effectiveness and that p b 0.Prozhe. 5. effectiveness (β = 0. and strategy are all significantly related The directionality of structure's influence on organizational effec- to organizational effectiveness. 5 and 8 predict.com 768 W. while other models do.52. The condition for total mediation was supported by the fact that in Alternative Model 1 (saturated model).26. and a positive influence on organi- tional culture demonstrated a significant direct impact on knowledge zational effectiveness (γ = 0.26. Zheng et al. with parameter estimates and model fit indices. The study findings shed light on several unresolved issues in the the direct path between organizational culture and organizational literature as stated in the Rationale section.01).05).3.00) are slightly larger than that of the management was modeled as the mediator.96. the hypothesis that there are other channels for structure to influence p b 0.05). indicating that the hypothesized model Hypothesis 7 predicted that knowledge management partially fits the data slightly better than the rest.24.27. judging from the results of bivariate tiveness and knowledge management is different. p b 0.52.88. this is consistent with organizational culture (r = 0. knowledge management. hypothesized model (4.05). p b 0. www.97. culture (r = 0. besides providing Fig.01) and strategy (r = 0. management (γ = 0. As hypotheses three. First.05). p b 0. structure. 2.05).23. and strategy (r = 0. partially for organizational effectiveness. six. p N 0. Our structural model analyses showed that organiza. A demonstrated a positive relationship with organizational effectiveness. the bivariate correlations (as shown in Table 2). Hypothesis 10 predicts that knowledge management partially edge management.28.com .01) was negatively associated with knowl. structure (r = −0. p b 0.12. and nine predict.05) when knowledge models (4. and organizational effectiveness other than knowledge management.52. / Journal of Business Research 63 (2010) 763–771 Fig. Organizational structure had a small and positive influence on knowledge management (γ = 0. p b 0. the relationship between organizational culture and organizational Organizational strategy had a positive influence on knowledge effectiveness. while knowledge management had a positive influence on organizational As Hypotheses 12. p b 0. www.14. and a small and negative 4. p b 0. 5 shows the hypothesized model organizational effectiveness. There was also a significant relation- ship between knowledge management and organizational effective. The findings supported this hypothesis. Fig.05).83.94).

and organizational effectiveness.73 0. 2001).Prozhe. structural. organizational characteristics to knowledge management success. involvement. culture.92 0. Zheng et al. only informant from their organizations. the results should be interpreted in light of its resources varies with changes in organizational knowledge. It seems that a knowledge-based view of the firm in that knowledge management is logical next step in research on culture and effectiveness could proceed not only an independent managerial practice.09 does business. this Finally. structure. and www. These findings warrant further exploration of strategy's relationship with knowledge management.. Focus on knowledge fact that culture determines the basic beliefs. and tools. Only 36 companies of the 301 Second.72 0.90 0. however. The results of this study shed management could be an intervening mechanism between organiza. this study provides some insights in integrating the resource-based view and knowledge-based view. and mission—when combined positively contribute to knowledge management. The four dimensions of organizational culture— adaptability. would help utilization in an organization. and which organizational culture influences organizational performance. Managerial implications Third.79 0. organizational strategy exerts a significant impact on companies had multiple respondents (12%).79 0.55 161 b0. light on the inadequacy of examining just the direct linkage between tional context and organizational effectiveness. complete success at using Alternative Model 2 798. 6. A major limitation is that the respondents were mostly the management serves as a key leverage point in organizations. This implies studies have focused on the direct relationship between organizational that knowledge management practices need to center on incorporat- culture and organizational effectiveness.79 0. Knowledge limitations. In the current study. Through analyzing the relevance of exploration is needed to examine this proposition.97 0.92 0. associated with how well cultural values are translated into value to The study findings indicate that knowledge management can the organization.01 4.90 0.90 0. This finding strengthens the call for transfer the impact of organizational contextual resources to the bottom attention to creating an organizational culture that is conducive to line. values. Grover and Davenport (2001) point out that most firms with Structural models χ2 df p χ2/df NNFI CFI GFI AGFI RMR knowledge management practices have reached the initial plateau Hypothesized model 794.73 0. such as providing knowledge management regarding the why and how of knowledge generation. although its effect is reduced when organizational culture informants because single informants may over-report or underreport and structure are taken into consideration. changes need to take place in the Alternative Model 3 805.70 161 b0.94 0. and strategic features.Prozhe. / Journal of Business Research 63 (2010) 763–771 769 Fig. www. but also a central to a deeper level by examining the specific mechanism(s) through mechanism that leverages organizational cultural. influence organizational effectiveness when it is in alignment with edge management than other factors examined. 2000.01 4.96 0.79 0. and supporting knowledge management initiatives. this study suggests that knowledge knowledge management) is considered. culture has the Long and Fahey. This knowledge-friendly environment that is made up of appropriate finding suggests that how well knowledge is managed is largely cultural. Watkins and Marsick.90 0. It also has a significant certain phenomena (Gold et al. Knowledge may be ing some software programs without adequate consideration of their one step closer to organizational effectiveness in the paths leading organizational characteristics to ensure the success of their knowl- from organizational resources to organizational effectiveness.com .09 because no substantial change has occurred in how the organization Alternative Model 1 795. The single informants may organizational effectiveness above and beyond that of organizational not represent the reality of their organizations as well as multiple context. De Second. ing culture-building activities to foster an environment that is it has been shown that organizational culture's influence on organiza. Fit indices for structural models. culture has a greater contribution to knowl. In order to have long-term. process.70 160 b0. It reveals that the Many organizations still view knowledge management as launch- resources in an organization may be hierarchical. structural. strategic influence on organizational effectiveness. Alternative Structural Model 3 (no direct path between strategy and OE). 1996).00 0. empirical evidence to the connection between knowledge management tional effectiveness is negligible when a mediator (in this case.92 0.01 5. knowledge-friendly. sharing. knowledge management was found to fully mediate study brings to attention the importance of focusing on creating a organizational culture's influence on organizational effectiveness. consistency. 1998.92 0. and strategy. Further. Further edge management initiatives.09 knowledge for business advantage. Many existing strongest positive influence on knowledge management.09 core aspects of the business such as strategy.01 4. learning and knowledge management (Davenport and Prusak. and norms management practices. This may be due to the organizational culture.72 0. impact on knowledge management. among the three organizational factors. It also corresponds Although this study presents substantial answers to some unre- with Penrose's (1959) opinion that the usefulness of organizational solved issues in literature. They could provide knowledge management professionals with a roadmap about which areas of organizational culture to invest their efforts in order to Table 3 enhance knowledge management outcomes. 4. The results support the organizational culture and organizational effectiveness.82 161 b0.com W.

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