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Serial
Understanding the relationships mediation
among knowledge-oriented analysis

leadership, knowledge
management capacity, innovation
performance and organizational Received 27 September 2019
Revised 5 December 2019

performance 10 January 2020

Accepted 6 February 2020

A serial mediation analysis

Mert Gürlek
School of Tourism and Hotel Management, Burdur Mehmet Akif Ersoy University,
Burdur, Turkey, and
Murat Çemberci
Department of Management, Yıldız Technical University, Istanbul, Turkey

Abstract
Purpose – Drawing on knowledge-based theory, contingency theory of leadership, social learning theory
and resource-based view, this study aims to investigate the relationships among knowledge-oriented
leadership (KOL), knowledge management capacity (KMC), innovation performance (IP) and organizational
performance (OP).
Design/methodology/approach – The relationships were examined using the serial mediation model of
Hayes (2013). Data were collected from the firms (N = 502) operating in technology development zones in
Turkey. The sample size corresponds to 10% of total number of the firms. Within the scope of a policy called
National Technology Move by public authority, Turkey has been making strong investments to produce
original and advanced technology products. A significant portion of these investments is directed toward
technology development zones. Therefore, research on this topic may be of interest in Turkey. It should also
be noted that Turkey is a developing country and is one of the world’s 20 largest economies.
Findings – The findings show that KMC and IP serially mediate the effect of KOL on OP. In the light of
the findings, KOL establishes the eligible conditions for the improvement of KMC. Enhanced KMC
transforms into innovation, and as a result, OP increases. As a result, this research shows that Turkish
firms under the leadership of knowledge-oriented leaders have high KMC, innovation performance and
firm performance. These findings can serve as a valuable benchmark for future studies in developing
countries.
Research limitations/implications – The current research has several limitations. It was carried
out on the firms operating in technology development zones in Turkey. Future researches can be
conducted on the firms outside the technology development zones. Second, this research was carried out
in Turkey. The study was conducted in a specific national context covering only Turkish firms. It is
recommended that readers be cautious when generalizing the results to different contexts (e.g. other
countries and industries). Future researches can be conducted on the firms located in technology
development zones in different countries. This may allow the comparison of countries. Turkey is a
developing country. For this reason, developing countries should be taken into consideration in the
comparison between countries, not developed countries such as the USA and European countries. Third, Kybernetes
this is a cross-sectional study. Therefore, it does not reveal the changes in research variables over time. © Emerald Publishing Limited
0368-492X
Longitudinal data collection is recommended for future researches. DOI 10.1108/K-09-2019-0632
K Practical implications – The research findings are turned into a slogan and the firms are recommended
the following perspective: more innovation for strong performance; a strong KMC for innovation; and for all, a
strong knowledge-oriented leadership.
Originality/value – KOL is a quite new research field. The current study makes a significant contribution
to the literature by revealing the fact that KOL is effective in increasing OP. In addition, testing via the serial
mediation model the relationships which put forward how KOL increases OP, this study sheds light on
organizational outcomes of KOL. There is an important gap in the search for leadership characteristics that
allow knowledge-intensive firms to improve their KMC, innovation and firm performance. Therefore, this
research is an important step toward filling this gap.
Keywords Organizational performance, Innovation performance,
Knowledge management capacity, Knowledge-oriented leadership
Paper type Research paper

1. Introduction
In an environment characterized by intensive competition, the key step toward
organizational success is to maximize organizational performance by way of increasing
innovation performance (Civelek et al., 2015; Forés and Camis
on, 2016; Gürlek and Çemberci,
2019). In fact, innovation performance is driven by the organizations’ knowledge
management (KM) capacities (KMCs) (Keskin, 2006; Liao et al., 2007). Therefore,
organizations strive to understand which factors would enhance KMC (Chen and Huang,
2009; Ghasemi and Valmohammadi, 2018). Despite the fact that researchers drew attention
on the importance of leadership in the context of KM and innovation processes and revealed
that different leadership types (e.g. transformational and transactional leadership) increase
KM capacity (KMC) (Crawford, 2005; Birasnav et al., 2011; Birasnav, 2014; Bavik et al., 2018;
Le and Lei, 2019), they put less emphasis on knowledge-oriented nature of the leadership.
Drucker (1998) claims that uptrend of new economy causes many fundamental
assumptions which are taught and practiced in the name of management become outdated.
In our day and time, the idea that management approaches still reflect the characteristics of
industrialization period is supported by greater number of researchers (Davenport, 2001;
Manville and Ober, 2003). In the scope of the leadership literature, Uhl-Bien et al. (2007)
highlight that new leadership models and styles that fit better to the characteristics of
knowledge age are required. The evolving nature of leadership in knowledge age requires
the combinations of different leadership styles which are adaptive to the conditions of
knowledge-intense industries (Sun and Anderson, 2012). Taking into consideration the
requirements of knowledge age, Donate and de Pablo (2015) have suggested the knowledge-
oriented leadership. In essence, the rise of new economy (Allee, 2012) allows us to better
understand the need for this kind of leadership. Knowledge-oriented leadership (KOL) is
defined as an attitude or action putting forward the creation, sharing and use of new
knowledge in a way that leads to a shift in collective results (Naqshbandi and Jasimuddin,
2018). Knowledge-oriented version of leadership is a combination of certain aspects of
transformational and transactional leadership style, as well as motivation and
communication elements (Donate and de Pablo, 2015)
KOL is a new research area. Following the publication of Donate and de Pablo (2015)’s
inspiring work, only few studies focused on the knowledge-oriented version of leadership
(Naqshbandi and Jasimuddin, 2018; Shamim et al., 2019; Shariq et al., 2019). Therefore,
further research on KOL is needed. Essentially, leadership theories are developed to answer
the question of how organizations do ensure a higher performance (Uhl-Bien and Arena,
2018). For this reason, inquiring whether new leadership styles actually work in
organizational life (Dinh et al., 2014) is important to pave the way for leadership theories
moving from the nascent theory stage to the maturity theory stage (Edmondson and Serial
McManus, 2007). Therefore, the present study seeks an answer to the question of “How does mediation
KOL increase organizational performance?” The question “how” is tried to be answered by
establishing a chain of relationship with the elements of knowledge-oriented leadership,
analysis
KMC, innovation performance and organizational performance. KOL promotes learning by
encouraging employees intellectually, facilitates access to knowledge, inspires employees to
further engage in knowledge behavior (Williams and Sullivan, 2011), rewards knowledge
sharing and application, guides employees along knowledge processes and tolerates
mistakes (Sadler, 2003; Farrell and Coburn, 2017). The mentioned characteristics of KOL can
increase the KMC of an organization. Besides, KMC can contribute to organizational
performance by increasing innovation performance (Chen and Huang, 2009). This study is
based on various theories. Knowledge-based theory (Grant, 1996) suggests that
organizations that manage knowledge successfully will have a high firm performance.
Social learning theory (Bandura, 1977) emphasizes that the leader shapes the behavior
patterns of the members of the organization. In this context, knowledge-oriented leaders can
increase KMC by guiding members of the organization in KM processes. The contingency
theory of leadership (Fiedler, 1964) emphasizes that a leader’s behavioral patterns must be
adjusted to current circumstances. Knowledge-oriented leadership is recognized as a type of
leadership that fits the needs of knowledge-intensive industries. Therefore, the knowledge-
oriented version of leadership can strengthen the organization’s KMC. According to the
resource-based view (Meso and Smith, 2000), the company’s knowledge resources are
among the valuable and difficult to imitate resources used to improve innovation
performance. In this context, organizations with strong KMC can achieve higher levels of
organizational performance.
This research contributes to the literature on several aspects. First of all, it is one of few
studies carried out on KOL (Naqshbandi and Jasimuddin, 2018; Shamim et al., 2019). There
is an important gap in the search for leadership characteristics that allow knowledge-
intensive firms to improve their KMC, innovation and firm performance. Second, it is the
first research revealing that KOL is effective in increasing the organizational performance.
Third, by means of the serial mediation model, it tests the chain of relationship that
demonstrates how KOL increases organizational performance. Fourth, this research
provides current information on KMC and innovation performances of Turkish technology
firms, and thus, it contributes to practitioners and future researches.
The rest of this study is structured as follows. Section 2 focuses on the theoretical basis of
research, the development of a research model and hypotheses. Section 3 focuses on the
sample of the research, measurement variables and data analysis. Section 4 includes the
measurement results and the hypothesis test. Section 5 covers the discussion of the findings,
theoretical contribution, practical contribution, limitations and suggestions for future
research. Section 5 includes the summary of the results, the aim of the research, its findings,
theoretical contribution, practical contribution, limitations, and suggestions for future
research.

2. Theoretical framework and hypotheses

2.1 Theoretical basis
Researching without any theoretical arguments is highly flawed. Therefore, in this
subsection, the theories used in constructing the research model are presented. In this
research, knowledge-based theory, social learning theory and contingency theory of
leadership were used for theoretical support. The knowledge-based theory (Grant, 1996)
suggests that firms can show better performance than their competitors, and thus, gain
K competitive advantage if they ensure the successful management of knowledge, which is
acknowledged as the most basic strategic resource of the firms. Leadership is among the
factors that play a crucial role in the management of knowledge resources and the success of
knowledge processes in a firm (Naqshbandi and Jasimuddin, 2018). The social learning
theory (Bandura, 1977) emphasizes that a leader as a role model shapes the behavioral
patterns of organization members. In this regard, knowledge-oriented leaders guide the
organization and its members by way of engaging in appropriate behaviors for the creation,
sharing and application of new knowledge and consequently support the enhancement of
KMC (Shamim et al., 2019; Xia et al., 2019). The contingency theory of leadership (Fiedler,
1964) purports that behavior patterns of a leader must be adjustable to the current
conditions. Knowledge-oriented leadership is recognized as a type of leadership that fits to
the requirements of knowledge-intensive industries (Zhang and Guo, 2019). Therefore, the
knowledge-oriented version of leadership can reinforce the KMC of organizations.
According to the resource-based view (Meso and Smith, 2000), the firm’s knowledge
resources are among the valuable and hard-to-imitate resources to be used with the aim of
improving innovation performance. In this regard, organizations with strong KMC may
reach higher level of organizational performance through producing new products at greater
numbers (Curado et al., 2018). Within the framework of the theoretical basis above, this
study proposes a theoretical model to shed light on the relationships among knowledge-
oriented leadership, KMC, innovation performance and organizational performance.

2.2 Knowledge-oriented leadership

The independent variable of the research is knowledge-oriented leadership. In the research,
it is necessary to emphasize knowledge-oriented leadership which is considered as the
antecedent of all variables. Therefore, in this subsection, the theoretical nature of
knowledge-oriented leadership is explained. Drucker (1998) emphasized that many
fundamental assumptions which are taught and practiced in the name of management
become outdated, and these assumptions about the organization literature are at least 50
years old. The idea that current management approaches still reflect the features of
industrialization period has recently become more common among researchers (Davenport,
2001; Manville and Ober, 2003). In the scope of the leadership literature, Uhl-Bien et al. (2007)
underline the need for new leadership models and styles which will fit to characteristics of
the knowledge age. The contingency theory of leadership (Fiedler, 1964) assumes that the
match between conditions and leadership style will lead to higher performance outcomes.
Focusing on a particular type of leadership, this study follows the assumptions of the
contingency theory of leadership and examines the knowledge-oriented leadership taking
into consideration the conditions within the knowledge-intense industry.
Leadership styles characterized by traditional industrial economies may not meet the
needs of new economy (Mabey et al., 2012). In line with the contingency theory of leadership,
researchers suggest that leaders should develop a mixture of behaviors based on the
demands of every unique case to increase organizations’ innovation performance in
knowledge-oriented economies (Ribière and Sitar, 2003; Ho, 2009; Shamim et al., 2019). For
example, Williams and Sullivan (2011) are skeptical about the benefits of traditional
leadership types in the context of learning, and instead, they advocate the alternative
learning leadership that builds knowledge organizations through combining transactional
and transformational leadership behaviors.
Knowledge workers who are managed through only transactional leadership may not be
able to show expected level of creativity (Berraies and Zine El Abidine, 2019). For instance, a
manager who puts aside the characteristics of transformational leadership and features only
his/her transactional leadership attributes may limit the freedom of his/her subordinates, Serial
and thus, hamper their creativity (Si and Wei, 2012). In the context of KM, Jansen et al. (2009) mediation
argue that exploratory learning, which emphasizes creativity, taking greater risks and
developing new ideas, is more compatible with transformational leadership, whereas
analysis
corrective learning which focuses on enhancement, productivity, improvement of existing
competencies and models is more compatible with transactional leadership. Bryant (2003)
argues that various aspects of transformational and transactional leadership theories are
important in the context of KM). Accordingly, transformational leaders create a favorable
environment for creating, sharing and applying knowledge. In particular, with the help of
their charisma and special attention on their employees, they encourage intellectual
development and motivate employees to create and share knowledge. On the other hand,
transactional leaders encourage the application of knowledge through knowledge behavior-
based rewarding and management by exception (Bryant, 2003). For example, a knowledge-
oriented leader with a perspective of transactional leadership can offer monetary rewards to
employees who provide the organization with new knowledge or who develop new ideas for
the organization (Gope et al., 2018; Mishra and Pandey, 2019). Birasnav (2014) argues that
the processes of knowledge transfer and creation cannot be realized in organizations without
motivating or rewarding the employees, and therefore, for KM, dimensions of transactional
leadership, i.e. conditional reward and management by exceptions, should be applied
simultaneously with transformational leadership. As a matter of fact, KM may not be
effective if employees are offered with neither monetary nor non-monetary awards to share
their knowledge with others and create new knowledge (Howell and Avolio, 1993; Friedrich
et al., 2019).
For the success of KM, Donate and de Pablo (2015) created the knowledge-oriented
leadership style by combining motivation and communication elements and certain aspects
of transformational leadership and transactional leadership styles. A knowledge-oriented
leader mainly acts as a role model with a transformational leadership perspective, promotes
learning by encouraging employees in intellectual aspects, institutionalizes learning via
motivation and courses, encourages employees to use their intellectual background and
promotes a pro-learning culture which tolerates mistakes, inspires employees to develop
knowledge behaviors, guides them to learn how to acquire and integrate knowledge and
thereby improves knowledge transfer, storage and application mechanisms (Donate and de
Pablo, 2015). For instance, such kind of leaders may become a role model with their personal
development initiatives and inspire his/her subordinates for their own personal
development (Viitala, 2004). On the other hand, knowledge-oriented leaders with an
understanding of transactional leadership reward the creation, sharing and application of
knowledge and adopt the approach of management by exceptions to promote knowledge
behavior (Shamim et al., 2019). In addition, knowledge-oriented leaders care about
employees’ motivation and take into account which elements can prompt knowledge
behaviors (Zhang and Cheng, 2015). They focus on the improvement of communication to
ensure the match between employee expectations and organizational objectives. In this way,
knowledge workers and managers find a platform to communicate (Naqshbandi and
Jasimuddin, 2018). For example, “Guidance by knowledge leaders breaks down
communication barriers and increase communication efficiency among organization
members” (Zhang and Guo, 2019, p. 4). For KM, leaders are supposed to convince and
motivate their employees to improve their knowledge behavior (Vendrell-Herrero et al.,
2019). Employees may not always be willing to create, share and apply knowledge. If leaders
expect employees to perform a task, they need to provide them with a clear job definition
K and explain what is expected from them. Therefore, communication is of vital importance in
KM (Ribière and Sitar, 2003; Yap et al., 2019).

2.3 Knowledge-oriented leadership and knowledge management capacity

Within the scope of this study, KMC is the second variable in the relationship chain between
KOL and organizational performance. In the research model, firstly, KOL is expected to
increase KMC. Therefore, the following subsection describes the theoretical background
between KOL and KMC. In a dynamic and turbulent environment, knowledge is a critical
resource to create value and develop and maintain competitive advantages (Camis
on and
Forés, 2010; Balle et al., 2019). KMC is considered to be a key factor for competitive
advantage and for the survival of the firms in the event that they encounter with an
increasing competition and pressure to innovate (Roberts, 2015; Mahdi et al., 2019). KMC
refers to the ability of a firm to acquire, share and apply valuable external knowledge (Zahra
and George, 2002). Knowledge acquisition refers to the ability of a firm to obtain knowledge
from external sources (e.g. suppliers) and involve it into the knowledge pool of the
organization (Chen and Huang, 2009; Flatten et al., 2011). Knowledge sharing means that
organization members share, re-produce and communicate the knowledge to necessary
places (Zheng et al., 2010). The knowledge application refers to the actual application of
knowledge coming from different sources with the aim of developing organizational skills
(Tanriverdi, 2005). Organizations need to know the antecedents that would affect KMC. The
literature suggests that leadership affects the knowledge-related outcomes (Daspit et al.,
2014). Leaders are of vital importance for creating eligible organizational conditions that
encourage the acquisition, sharing and application of knowledge. Although leadership is
very important for strengthening KMC, it has been significantly neglected in the literature
(Volberda et al., 2010; Rai and Prakash, 2016). Very few studies have examined the effects of
leadership on KMC. It has been concluded in those studies that transformational and
transactional leadership styles affect knowledge-oriented outcomes at different levels
(Flatten et al., 2015; Ferreras Méndez et al., 2018).
The evolving nature of leadership in the knowledge age requires the combinations of
leadership styles tailored to the requirements of knowledge-intense industries (Sun and
Anderson, 2012). Recently, Donate and de Pablo (2015) have proposed a new type of
leadership which is in compliance with the requirements of the knowledge age. KOL
involves facilitating, encouraging and guiding the acquisition, sharing and application of
knowledge. Knowledge version of the leadership develops a suitable environment
for knowledge behaviors, promotes learning, facilitates seeking for knowledge, rewards
knowledge sharing and application, guides employees throughout knowledge processes and
tolerates mistakes (Sadler, 2003; Farrell and Coburn, 2017). These characteristics of KOL can
increase the KMC of the organization. According to the social learning theory (Bandura,
1977), employees can consider their leader as a role model and learn what behaviors to
exhibit by way of observing the leader’s behavior. Knowledge-oriented leaders can act as a
role model and contribute to the proliferation of knowledge behavior (e.g. knowledge-
sharing, practicing) within the organization (Bertoldi et al., 2018). Knowledge-oriented
leaders have a driving instinct to promote knowledge behavior and knowledge outputs,
hence they are able to increase the firm’s KMC through encouraging employees to engage in
knowledge behavior further (Shariq et al., 2019). The knowledge-based theory suggests that
leaders can enhance KMC by means of valuing knowledge and promoting knowledge
behavior (Singh et al., 2019). Besides, Nonaka and Takeuchi’s (1995) model of knowledge
creation proposes that one of the cornerstones of knowledge creation and innovation in
organizations is the leadership that places knowledge into a central position. In the
literature, several studies concluded that KOL affects knowledge-oriented outcomes in a Serial
positive way. Donate and de Pablo (2015) revealed that KOL has a positive impact on KM mediation
and innovation. Shamim et al. (2019) discovered that KOL increases knowledge behavior
through emotional commitment, creative self-efficacy and dedication to work. Naqshbandi
analysis
and Jasimuddin (2018) revealed in their study that KOL increases KM skills.
Based on the discussion above, it is suggested that the knowledge-oriented leader would
create necessary conditions for the acquisition, sharing and application of knowledge, and
thus, would increase KMC of the organization. Accordingly, the following hypothesis is
proposed:

H1. Knowledge-oriented leadership affects knowledge management capacity positively.

2.4 Knowledge management capacity and innovation performance

The third variable of the relationship chain is innovation performance. In the research
model, KMC is expected to improve innovation performance. The following subsection
explains the relationship between KMC and innovation performance. Innovation studies are
mainly based on the Schumpeterian innovation theory (Fagerberg and Verspagen, 2009;
Crossan and Apaydin, 2010; Gürlek and Tuna, 2018). According to Schumpeter (1934),
innovation refers to developing different things in the field of economic life by way of
creating new knowledge or transforming the existing knowledge into innovation. The
Schumpeter’s creative destruction approach suggests that innovation is a revolutionary
process that constantly destroys the old constructs and creates new ones. Throughout this
process, firms that cannot keep up with innovations and fail to produce novel products are
inevitably replaced by innovative firms (Schumpeter, 1934). For example, while Nokia was
the pioneer of the phone industry in the early 2000s, it fell into a decline when Apple
introduced the iPhone in 2007. The fundamental reason underlying the decline in popularity
of Nokia was that Apple created a new touch trend and introduced its own operating system
(Peltonen, 2019). The literature suggests that organizations’ competitive advantage in
knowledge-intense industries is rather dependent on their ability to develop new products
(Nonaka and Takeuchi, 1995; Yang, 2005; Akgün et al., 2005; Akgün et al., 2007). Therefore,
the present research focuses on product innovation.
Product innovation is highly based on KM. To ensure successful innovation, knowledge
should be acquired from the resources outside of the organization, and be shared and put
into practice within the organization (Du Plessis, 2007; Salunke et al., 2019). In particular,
firms with outstanding performance incorporate all main sources of information into the
product innovation process and proactively promote the overall process of knowledge
creation and management (Corso et al., 2001). For example, Tesla owes its world leadership
in the electric vehicle market to the integration of product architecture with information
architecture (Chen et al., 2019). Innovation is a knowledge-intense business process as it
requires the firm to continuously renew its knowledge and combine existing knowledge
assets to create new knowledge (Jiménez-Jiménez et al., 2014). Therefore, the main task of
innovation-oriented firms is to restructure the existing knowledge assets and resources and
to seek for new knowledge (Ashok et al., 2016; Kale et al., 2019).
The knowledge-based theory assumes that the organizations that are able to manage
knowledge assets will show relatively better performance than other firms failing to manage
the knowledge assets they have. According to the knowledge-based theory, a firm’s
performance is based on its ability to produce, combine, re-combine and use knowledge
(Shujahat et al., 2018). Furthermore, the resource-based view suggests that effective
management of knowledge resources would enhance innovation. In the age of new economy,
K the knowledge, which is deemed as a strategic resource, is important for a firm’s ability to
innovate and compete (Xie et al., 2018; Shujahat et al., 2019).
KMC consists of the elements of knowledge acquisition, sharing and application (Gope
et al., 2018). Knowledge acquisition refers to the ability to acquire new and useful ideas and
solutions on various aspects of the organization, ranging from products to technological
processes and managerial practices (Gope et al., 2018; Lamont et al., 2019). Organizations
with high knowledge acquisition capacity are successful in creating new markets,
developing new products in a rapid way and responding customers swiftly (Andreeva and
Kianto, 2011). Knowledge sharing ensures the integration of existing knowledge and new
knowledge within the organization, and thus, knowledge becomes more useful (Hsiao et al.,
2011; Donnelly, 2019). In other words, knowledge can be exchanged, shared, improved,
refined and used where necessary. Knowledge shared within the organization enhances the
organization’s innovation performance (Martín-de Castro, 2015; Akgün et al., 2017). The
capacity to apply knowledge is related to firms’ ability to incorporate and use the acquired,
shared and transformed knowledge in their operations and routines to solve real-world
problems (Akgün et al., 2017; Xie et al., 2018). Organizations applying the knowledge
effectively to solve organizational problems can provide innovative products and services
(Liao et al., 2007; Johansson et al., 2019).
The knowledge-based theory highlights that KMC lays the foundation of a firm’s
innovation performance (Grant, 1996). Successful innovation process depends on
acquisition, sharing and application of new or existing knowledge. In the light of
Schumpeter’s (1934) perspective of creative destruction, it can be claimed that the firms
deprived of knowledge sources will face challenges in producing new products, which will
result in finalization of their operational life and being replaced by innovative firms. The
ability of a firm to recognize the value of new external knowledge or to create new
knowledge and to apply it for commercial purposes enhances its innovative capabilities. For
example, firms that acquire new and original knowledge can produce more innovative
products (Ali et al., 2016). Therefore, KMC, which is deemed the most valuable and strategic
resource in the knowledge economy, is likely to increase the firm’s ability to innovate and
compete (Xie et al., 2018). Many studies revealed that various types of KMC increased
innovation performance. For example, knowledge acquisition (Lai et al., 2014), knowledge
sharing (Taminiau et al., 2009), knowledge application (Zhang et al., 2009) and their
relationship with innovation were discussed in those studies. However, very few studies
examined how the joint presence of KMCs would affect innovation performance (Chen and
Huang, 2009; Santoro et al., 2018). Different dimensions of KMC complete one another. For
example, knowledge sharing becomes difficult in the absence of knowledge acquisition
(Lichtenthaler, 2009). Recent studies suggest that different KMCs should be integrated into
analyses in a way to complete each other (Costa and Monteiro, 2016). Therefore, KMCs
should be included into research model collectively. In the present study, it is suggested that
the joint presence of knowledge acquisition, sharing and application capacities would
increase the innovation performance (product innovation).

H2. Knowledge management capacity affects innovation performance positively.

2.5 Innovation performance and organizational performance

The last variable of the relationship chain is organizational performance. In the following
subsection, it is hypothesized that innovation performance improves organizational
performance. In dynamic markets, long-term organizational success depends on innovation
performance (Baker and Sinkula, 2002). The logic behind this idea is that innovation often
serves to cope with a turbulent external environment (Jimenez-Jimenez and Sanz-Valle, 2008; Serial
Moradi et al., 2019). In this regard, organizations with innovation ability will be able to mediation
respond to challenges more quickly, develop new products and use market opportunities analysis
better than non-innovative firms (Hogan and Coote, 2014). Product innovation has become
an important tool for firms’ operational survival and turned into a weapon to maintain
competitive advantage. A good product innovation facilitates firms to improve their market
positions, increase brand values and attract new customers (Lin et al., 2013; Jin et al., 2019).
The more the firms engage in product innovation, the more they become successful in
responding to customer needs and developing new capabilities that enable them to achieve
better performance or higher profit (Wang and Wang, 2012; Liao and Tsai, 2019).
The resource-based view emphasizes that possessing rare, hardly imitable and valuable
resources will increase organizational performance (Barney, 1991). Innovation is considered
as a unique skill that offers competitive advantage and higher performance to organizations
(Gürlek and Tuna, 2018). Therefore, organizations with higher innovation performance can
have higher organizational performance. Many studies concluded a positive relationship
between those two variables (Greco et al., 2016; Rajapathirana and Hui, 2018; Lee et al., 2017).
In the light of the theoretical discussion above, the following hypothesis is proposed:

H3. Innovation performance affects organizational performance positively.

2.6 Knowledge-oriented leadership, knowledge management capacity and organizational

performance
According to the social learning theory (Bandura, 1977), organization members learn by
observing and imitating their leaders. Accordingly, employees can engage in more
knowledge behaviors via observing the behaviors of the knowledge-oriented leader.
Therefore, KOL can increase KMC by creating an environment that promotes knowledge
behavior (Naqshbandi and Jasimuddin, 2018). According to the knowledge-based theory, the
foundation of innovation performance is not only the creation of knowledge, but also its
application within the organization (Shujahat et al., 2019). Because knowledge application
and sharing yield innovative products, innovation can improve organizations’ overall
performance (Noruzy et al., 2013; Grillitsch et al., 2019). KMC is an important antecedent of
organizational performance (García-Morales et al., 2012; Jami Pour and Asarian, 2019).
Moreover, KOL plays a critical role in creation and improvement of KMC (Politis, 2001).
Knowledge-oriented leadership facilitates the acquisition, sharing and application of
knowledge, encourages learning, rewards knowledge behavior, and thus, contributes to the
enhancement of KMC (Sadler, 2003; Farrell and Coburn, 2017). The application and the
sharing of knowledge bring along new products and increase the organizational
performance. Therefore, it can be expected that KOL would increase organizational
performance through KMC. Several studies concluded that KM plays a mediating role
between leadership and organizational outcomes. Birasnav et al. (2011) revealed that KM
mediates the relationship between transformational leadership and human capital. Birasnav
(2014) found that KM mediates the relationship between transformational leadership and
organizational performance. In the light of the discussion above, the following hypothesis is
proposed:

H4. Knowledge-management capacity mediates the relationship between knowledge-

oriented leadership and organizational performance.
K 2.7 Knowledge-oriented leadership, innovation performance and organizational
performance
The innovation literature suggests that leadership style plays a critical role in enhancing
innovation performance (Stoker et al., 2001; Jung et al., 2003). Especially in knowledge-
intense industries, innovation success requires a knowledge-oriented leadership approach
(Carmeli and Waldman, 2010; Chuang et al., 2016), as innovation may emerge with the help
of a leadership style that promotes knowledge acquisition, sharing and application
(Gumusluoglu and Ilsev, 2009; Yang et al., 2014). Innovation requires not only KMC, but also
a leader to mobilize material and human resources. Innovation may not be successful in the
event that all required resources exist but there is no leader (Zhang and Guo, 2019). For
example, Apple’s innovation success lies under Steve Jobs’ inspiring knowledge leadership
(Isaacson, 2012). From this point of view, KOL can be considered as a tool perfectly tailored
for increasing the innovation performance (Shariq et al., 2019). On the other hand, high
innovation performance can provide the organization with higher organizational
performance than its competitors (Damanpour et al., 2009; Para-González et al., 2018).
According to the knowledge-based theory, strong innovation bases underlie the
performance differences between firms. Firms that offer higher quality and innovative
products than their competitors achieve higher performance results (Crescenzi and
Gagliardi, 2018). This research examines KOL as an antecedent of innovation performance,
and organizational performance as an outcome of innovation performance. It suggests a
relationship between the antecedent and the outcome as follows: KOL establishes eligible
conditions for innovation performance. On the other hand, innovation performance can
improve organizational performance through introducing innovative products. In other
words, innovation performance can serve as a bridge between knowledge-oriented
leadership and organizational performance. Based on the discussion above, the following
hypothesis is proposed:

H5. Innovation performance mediates the relationship between knowledge-oriented

leadership and organizational performance.

2.8 Serial mediation

The following subsection explains the serial mediation hypothesis. Serial meditation helps
us to see how KOL and organizational performance are linked and what the fundamental
mediators are in the chain. Previous studies emphasize that the relationship between
leadership and organizational performance can be better explained by the serial mediation
model because of the relational distance between the two structures. (Caridi-Zahavi et al.,
2016; Shin et al., 2015). Various studies have examined and discussed the relationship
between leadership styles and innovation (Jung et al., 2003; Jaiswal and Dhar, 2015),
knowledge behaviors (Carmeli et al., 2013; Masa’deh et al., 2016) and organizational
performance (García-Morales et al., 2012). However, there exists no finding on the
fundamental relationship between KOL and organizational performance. For example, the
studies carried out on KOL are very scarce (Donate and de Pablo, 2015; Naqshbandi and
Jasimuddin, 2018; Shamim et al., 2019; Shariq et al., 2019). Therefore, putting forward the
chain of relationship between KOL and organizational performance will make a significant
contribution to eliminating a shortcoming in the literature. With the purpose of shedding
light on the above-mentioned chain of relationship, the current study claims that KOL will
increase organizational performance through KMC and innovation performance. The chain
in question can be explained as follows: KOL creates eligible conditions to increase KMC
(Naqshbandi and Jasimuddin, 2018). Increased KMC turns into innovation, and
consequently, organizational performance increases. As a metaphor, KMC and innovation Serial
performance will serve as a suspension bridge between the dependent and independent mediation
variables.
Based on the theoretical discussion above, it is expected that KMC and innovation
analysis
performance would serially mediate the relationship between knowledge-oriented
leadership and organizational performance. In this regard, the following hypothesis is
proposed:

H6. Knowledge management capacity and innovation performance serially mediate the
relationship between knowledge-oriented leadership and organizational performance.

3. Method
3.1 Sample and procedure
The present research was conducted on the firms operating in technology development
zones in Turkey. There are several reasons to conduct research in such a setting. First, as
part of national technology policy, Turkey supports the technology development regions to
develop domestic technological products (Ministry of Industry and Technology, 2019).
However, empirical research on firms in these regions is insufficient. Second, in Turkey,
which is a developing country, there is a lack of research on the effectiveness of firms in
technology zones. Third, Turkey has made great efforts to develop R&D, value-added
production and international knowledge dissemination channels in the past 20 years (Ulku,
and Pamukcu, 2015). “After 2000, Turkey has experienced a dramatic revival in R&D
activities. In 2001, R&D expenditures were recorded as TL 1.3bn and this figure increased to
TL 15.03bn in 2010 and to TL 22.18bn in 2015. The share of R&D expenditures in GDP
increased from 0.5 percent to 1.06 percent and the share of R&D personnel in total
employment increased from 1 to 5 percent between 2001 and 2013” (Avsar and Sevinc, 2019,
p. 5675). In addition, thanks to companies operating in technology development zones, the
domestic component rate in the defence industry has increased from 20 per cent to
approximately 70 per cent (Presidency of Defense Industries, 2019). On top of that, with the
support of companies located in technology development zones, projects such as domestic
electric cars, domestic aircraft, unmanned aerial vehicles, software, satellite, helicopter,
alternative energy and alternative fuel, sensor technologies, microelectronic mechanical
system are carried out [METU (Middle East Technical University), 2019; Informatics Valley,
2019]. As an example of this project in December 2019, Turkey has introduced the domestic
electric car prototype to the world (Reuters, 2019). For this reason, it is important to conduct
research on the companies located in these zones in Turkey. Fourth, this research focuses on
KM and innovation. Therefore, it is appropriate to consider the firms located in technology
zones as analysis units.
Out of 81 technology development zones in Turkey, 60 are operational. In those zones,
5,216 firms maintain their operations (Ministry of Science, Industry and Technology, 2018a).
The researcher found contact details of all firms in the list published by the Ministry of
Science, Industry and Technology (http://teknoag.sanayi.gov.tr/) (Ministry of Science,
Industry and Technology, 2018b), and formed a research team composed of 10 people. The
research team contacted senior managers in each firm and explained the research objectives
and content of the questionnaire. To the senior managers of the firms who agreed to
participate in the research, one part of the questionnaires was delivered by the research team
whereas the other part was sent online. A total of 514 firms provided feedback on the
questionnaires. Because of incomplete filling, 12 questionnaire forms were excluded from
the data set. As a result, 502 eligible questionnaire forms were obtained. The sample size
K corresponds to approximately 10 per cent of total number of the firms. This ratio is quite
high. A total of 26 per cent of the firms operate in software industry, 27 per cent operate in
computer and communication technologies industry, 9 per cent operate in manufacturing
industry, 9 per cent operate in electronics industry, 6 per cent operate in energy industry, 5
per cent operate in defense industry, 10 per cent operate in medicine and health industry, 4
per cent operate in machinery and equipment manufacturing industry and 4 per cent operate
in telecommunication industry. According to NACE Rev., all these industries are classified
as technology-intense (e.g. high-technology, medium-high-technology) industries (European
Communities, 2008). They are, therefore, compatible with the research objectives.

3.2 Measurements of variables

In the research, five-point Likert scale (1 – strongly disagree and 5 – strongly agree) was
used. Because of the fact that the measurement items in the study were adopted from
English literature, linguistic validity of the scale was checked. Items in the scales were
translated into Turkish via back-to-translation method by four language experts specialized
in both English and Turkish (Brislin, 1976). Then, the questionnaire form was sent to the
managers of different firms (N: 20) and they were asked to determine the possible meaning
ambiguities and whether the items fit to the research context. The content of questionnaire
form was finalized in the light of the suggestions.
3.2.1 Knowledge-oriented leadership. KOL was measured with five items that integrate
the transformational and transactional leadership styles and the variables of communication
and motivation on knowledge basis. The construct was measured via the scale developed by
Donate and de Pablo (2015). The results of the first-order confirmatory factor analysis (CFA)
show that the scale has acceptable fit indices ( x 2 = 4.409, df = 4, p < 0.01 x 2/df = 1.102,
RMSEA = 0.021, CFI = 0.99, NFI = 0.99). The alpha reliability of the scale is 0.852.
3.2.2 Knowledge management capacity. KMC was evaluated with 15 items. Because the
literature suggests that different KMCs should be integrated into multidimensional (second
order) analyses (Costa and Monteiro, 2016) in a way to complete one another, the items were
adapted from previous studies. To measure the construct, four items from the study of Filius
et al. (2000), two items from the study of Gold et al. (2001), six items from the study of Lin
and Lee (2005) and three items from the study of Chen and Huang (2009) were adapted. The
second-order CFA results supported KMC as a single general construct consisting of three
different sub-dimensions ( x 2 = 145.206, df = 87, p < 0.01, x 2/df = 1.669, RMSEA = 0.055,
CFI = 0.961, NFI = 0.908). Therefore, 15 items can be averaged out for overall measurement
of KMC. The alpha reliability of the scale is 0.906.
3.2.3 Innovation performance. Innovation performance was measured via five items
adapted from previous studies (Donate and Guadamillas, 2010; Donate and Guadamillas,
2011). The literature suggests that competitive advantage of the firms in knowledge-intense
industries is more dependent on their ability to develop new products (Nonaka and
Takeuchi, 1995; Yang, 2005). Therefore, the current research focuses on product innovation.
In this regard, the question directed to the managers in the sample group is about the last
year’s innovation performance. Results of the first-order CFA show that the scale has
acceptable fit indices ( x 2 = 2.903, df = 4, p < 0.01, x 2/df = 0.726, RMSEA = 0.01, CFI = 0.99,
NFI = 0.99). The alpha reliability of the scale is 0.874.
3.2.4 Organizational performance. The organizational performance was measured via
four items based on the parameters that relatively put forward the organization’s
performance against its competitors such as market share, sales volume, profitability and
prestige (Li et al., 2010). Managers were asked to evaluate the organizational performance in
the past three years taking into consideration the firms’ main competitors (from 1 – worst to
5 – best). In the present study, market-based indicators rather than economic performance Serial
indicators such as the return on investment (ROI) were taken into account. Because the mediation
economic indicators may be affected by internal and external variables which are not related analysis
to innovation, the measurement results may not fully reflect the reality (Guest, 2011). For
example, product innovation may be well-designed and implemented; however,
organizational managers may scale down the economic performance because of failing in
the wise management of business capital (Paauwe, 2009). The results of the first-order CFA
show that the scale has acceptable fit indices ( x 2 = 2.834, df = 2, p < 0.01, x 2/df = 1.417,
RMSEA = 0.043, CFI = 0.998, NFI = 0.994). The alpha reliability of the scale is 0.871.

3.3 Data analysis

The Analysis of Moment Structures (AMOS) program was used for the CFA in the study,
whereas the PROCESS macro program based on OLS regression was used for hypothesis
testing. PROCESS macro is considered to be a highly effective program for testing serial
mediation models (Hayes, 2013). The advantage of this analytical approach put forward by
Hayes (2013) is that it allows the mediator variables assumed to have a priority to be
modeled in such a way to influence the subsequent variables. In addition, serial mediation
models allow testing the mediator variables in theoretical order (Vartanian et al., 2016)
unlike the parallel mediating models which claim that no mediator variable causally affects
the other. Serial mediation assumes “a chain linking the mediators, with a specified direction
of causal flow” (Hayes, 2012, p. 14). In brief, mediator variables between dependent and
independent variables can be serially tested in serial mediation models (Hayes, 2017).
Furthermore, Hayes’ (2013) procedure directly tests, with the help of the bootstrapping
method, the significance of the indirect effect generated by the independent variable on the
dependent variable through mediator variables. Obtaining bootstrapped confidence
intervals for specific indirect effects could be problematic in majority of SEM programs. For
example, although the AMOS program provides bootstrapped confidence intervals for
overall indirect effects, it is not possible to obtain bootstrapped confidence intervals
for specific indirect effects (Leth-Steensen and Gallitto, 2016). Therefore, in the current
study, the PROCESS macro is considered to be a better option for hypothesis testing.

4. Results
4.1 Measurement results
In the current study, CFA was performed to examine the discriminant validity of the four
main variables. As seen in Table I, the four-factor model ( x 2 = 553.739, df = 368, p < 0.01,
x 2/df = 1.505, RMSEA = 0.048, CFI = 0.945, NFI = 0.901, AIC = 687.739, CAIC= 983.319)
better fits to data than other alternative models (Schermelleh-Engel et al., 2003). These
results indicate that five main variables used in the present study provide a good
discriminant validity. According to the CFA results, all factor loadings exceed 0.50. The
factor loadings of 29 items are statistically significant. Alpha coefficients of the scales are in
the range of 0.852 and 0.906. This result indicates the internal consistency of all constructs.
The composite reliability values (CR) range between 0.849 and 0.904. This result shows
that the construct reliability is established (Bagozzi and Yi, 1988). In addition, the average
variance extracted (AVE) values are in the range of 0.583-0.759. These values indicate that
convergent validity is established (Fornell and Larcker, 1981). As shown in Table II, the
correlation values between the variables are below 0.85. This result points out that there is
no multicollinearity problem.
K Models x2 df x 2/df Dx 2 RMSEA CFI NFI AIC CAIC

Four-factor model (baseline

model) 553.739 368 1.505 0.048 0.945 0.901 687.739 983.319
Three-factor model (combining
KOL and KMC) 796.807 374 2.130 243.068* 0.071 0.875 0.789 918.807 1187.917
Three-factor model (combining
KOL and IP) 885.125 371 2.386 331.386* 0.079 0.848 0.766 1,13.125 1295.471
Three-factor model (combining
KMC and IP) 1039.932 374 2.781 486.193* 0.089 0.803 0.725 1161.932 1431.042
Three-factor model (combining
IP and OP) 880.537 371 2.373 326.798* 0.078 0.849 0.767 1008.537 1290.883
Two-factor model (combining
Table I. KOL, KMC and IP) 1142.275 376 3.038 588.536* 0.096 0.773 0.698 1260.275 1520.562
One-factor model 1565.998 377 4.154 1012.259* 0.119 0.648 0.586 1681.998 1937.874
Comparison of
measurement models Note: *p < 0.001

Variables 1 2 3 4 5 6 7

Firm age 1
Firm size 0.57** 1
Industry 0.23** 0.21** 1
Knowledge-oriented leadership
0.06
0.003 0.06 1
Knowledge management capacity 0.19** 0.13* 0.01 0.56** 1
Innovation performance
0.04
0.02 0.09 42.** 0.54** 1
Organizational performance
0.10
0.09 0.01 0.51** 0.57** 0.62** 1
Table II. Means 2.3036 2.1607 5.0670 3.8987 4.1221 4.1141 3.8401
Means, standard Standard deviation 1.36477 1.37599 5.437778 0.70536 0.51086 0.63675 0.72202
deviations and
correlations Notes: *p < 0.01; **p < 0.05

4.2 Hypotheses test

In this study, the industry, the firm age and the firm size were incorporated into the research
model as control variables. As shown in Table III, none of the control variables significantly
correlate with the research variables. According to the regression analysis results, KOL
positively affects KMC ( b = 0.40, SE = 0.04, p < 0.001). KMC positively affects innovation
performance ( b = 0.57, SE = 0.08, p < 0.001), and innovation performance positively affects
organizational performance ( b = 0.47, SE = 0.06, p < 0.001). Therefore, H1, H2 and H3 are
supported.
As shown in Table IV, 95 per cent confidence intervals (5,000 bootstrap samples) for all
indirect effects do not include zero. This finding confirms the significance of indirect effects.
KMC mediates the effect of KOL on organizational performance ( b = 0.12, SE = 0.05, p <
0.001). Innovation performance mediates the effect of KOL on organizational performance
( b = 0.07, SE = 0.04, p < 0.001). KMC and innovation performance serially mediate the
effect of KOL on organizational performance ( b = 0.11, SE = 0.02, p < 0.001). According to
these findings, H4, H5 and H6 are supported. As seen in Table IV, the direct effect of KOL
on organizational performance is 0.22 (SE = 0.06, p < 0.001), its total indirect effect is 0.30
(SE = 0.05, p < 0.001) and its total effect is 0.52 (SE = 0.06, p < 0.001) (Figure 1).
 KMC IP OP
Serial
Variables Coefficient 95% CI Coefficient 95% CI Coefficient 95% CI mediation
analysis
KOL 0.40* 0.32,0.47 0.15* 0.02,0.03 0.22* 0.09,0.33
KMC 0.57* 0.40,0.74 0.30* 0.12,0.4
IP 0.47* 0.34,0.60
Firm age 0.04 ns
0.09,006 0.01
0.04,0.07 0.0007
0.06,0.07
Firm size 0.02 ns
0.07,02 0.003
0.05,0.06 0.02
0.08,0.03
Industry 0.0008 ns
0.01,009 0.009
004.02 0.003
0.02,0.01
R2 = 0.34 R2 = 0.32 R2 = 0.50
Table III.
F(219.0000) = 28.31* F(218.0000) = 20.99* F(217.0000) = 35.30*
Regression
Notes: *p < 0.001; KOL= knowledge-oriented leadership; KMC = knowledge management capacity; IP = coefficients of serial
innovation performance; OP = organizational performance mediation model

Variables Direct effect Boot SE 95% CI

KOL–OP 0.22 0.06 0.10, 0.34

Indirect effect
KOL–KMC–OP 0.12 0.05 0.03, 0.21
KOL–IP–OP 0.07 0.04 0.01, 0.15
KOL–KMC–IP–OP 0.11 0.02 0.05, 0.17
Total indirect effect 0.30 0.05 0.19, 0.41
Total Effect (directþindirect) 0.52 0.06 0.39, 0.63 Table IV.
Direct, indirect and
Notes: CI = confidence interval. Bootstrap samples for the bias-corrected interval is 5.000 total effects

Figure 1.
Serial mediation
model results
K 5. Discussion
5.1 Discussion of findings
In this subsection, the findings are discussed in the context of academic literature. For this, a
proper discussion was written for each hypothesis. The research findings explicitly
supported the theoretical model and all hypotheses developed in the current study.
According to the results, the presence of knowledge-oriented leadership in the organization
strongly influences KMC (H1). Therefore, knowledge-oriented leadership enhances KMC by
promoting and guiding the acquisition, sharing and application of knowledge. This finding
confirms the previous literature, which emphasizes that knowledge-oriented leaders guide
and encourage members of the organization by acting appropriately for the creation, sharing
and implementation of new knowledge (Donate and de Pablo, 2015; Shamim et al., 2019; Xia
et al., 2019). In addition, this finding supports the basic assumptions of the social learning
theory (Bandura, 1977), which states that acting as a role model of leaders shapes the
behavioral patterns of the organization and its members. On the other hand, the KMC
increases innovation performance by providing the organization with the knowledge
processes necessary for innovation (H2). These findings support the basic assumptions of
knowledge-based theory (Grant, 1996), which suggests that KMC will improve innovation
performance. In addition, these findings are consistent with previous studies emphasizing
that KMC improves innovation performance (Chen and Huang, 2009; Santoro et al., 2018).
H3 proposed that innovation performance increases organizational performance. The
finding supports this hypothesis and demonstrates that firms are better able to capture
market opportunities by developing new products and thus have higher organizational
performance. Being consistent with the previous research (Rajapathirana and Hui, 2018; Lee
et al., 2017), this finding confirms the fundamental assumptions of the resource-based view
(Barney, 1991), which regards innovation as a unique and hard to imitate skill that offers
organizations competitive advantage and higher performance.
Knowledge-oriented leadership enhances organizational performance through KMC.
Ensuring that knowledge is effectively managed in organizations, the knowledge version of
leadership contributes to organizational performance. In other words, knowledge-oriented
leadership improves organizational performance by increasing the organization’s KMC
(H4). This finding empirically confirms the previous researches suggesting that KM plays a
mediating role between different leadership types and organizational outcomes (Birasnav
et al., 2011; Birasnav, 2014). On the other hand, knowledge-oriented leadership enhances
organizational performance through innovation performance. Knowledge-oriented
leadership contributes to organizational performance by providing the leadership style
required for innovation. The knowledge version of leadership creates a suitable environment
for knowledge behaviors, encourages learning, facilitates knowledge acquisitions, rewards
knowledge sharing and application, guides employees through knowledge processes and
tolerates mistakes. Thus, it contributes to innovation performance, which in turn predicted
organizational performance (H5). This finding empirically supports previous literature
claiming that the appropriate leadership style to mobilize human resources in knowledge-
intensive industries will promote innovation and improve organizational performance (Para-
González et al., 2018; Zhang and Guo, 2019).
The research findings show that KMC and innovation performance serially mediate the
effect of knowledge-oriented leadership on organizational performance (H6). Accordingly,
knowledge-oriented leadership established the suitable conditions for increasing KMC.
Increased KMC turned into innovation and consequently organizational performance
increased. As a metaphor, KMC and innovation performance served as a suspension bridge
between the dependent and independent variables. In other words, organizational
performance increased through a relationship chain (serial mediation) consisting of Serial
knowledge-oriented leadership, KMC and innovation performance. This finding is in line mediation
with the notion that leadership styles can improve firm performance through KM and
innovation (Donate and de Pablo, 2015; Naqshbandi and Jasimuddin, 2018).
analysis

5.2 Theoretical implications

This research contributes to the literature on several aspects. First, despite the fact that
researchers pointed out the importance of leadership in KM and innovation processes and
revealed that different leadership styles (e.g. transformational and transactional leadership)
increased the KMC (Crawford, 2005; Birasnav et al., 2011; Birasnav, 2014), they put less
emphasis on knowledge-oriented nature of leadership. Only few studies empirically
examined KOL (Shamim et al., 2019; Naqshbandi and Jasimuddin, 2018). Therefore, the
current study contributes to expanding the literature on KOL.
Second, leadership styles and theories are developed to answer the question of how
organizations ensure higher performance (Uhl-Bien and Arena, 2018). Therefore, testing
whether new leadership styles would work in organizational life (Dinh et al., 2014) is
important to ensure the transition of leadership theories from the stage of nascent theory to
the stage of maturity theory (Edmondson and McManus, 2007). This is the first study in the
literature that reveals the fact that KOL is effective in increasing organizational
performance. Third, in the current study, the chain of relationship showing how KOL
increases organizational performance was analyzed via the serial mediation model.
More clearly, this paper extends the literature on leadership, KM and innovation and firm
performance in the context of technology development zones. Very few studies discussed
these topics under the same umbrella (García-Morales et al., 2012; Singh et al., 2019). By way
of proposing a model based on the leadership theory and the knowledge-based theory, this
study contributes to the integration of the above-mentioned concepts. The effects of
knowledge-oriented leadership on innovation are discussed in several studies (Donate and
de Pablo, 2015); however, the relationships between knowledge-oriented leadership and firm
performance have not yet been studied in the scope of management literature. Furthermore,
the mediation effects in the relationship between the two constructs have been neglected.
The current study contributes to the literature by addressing the direct and indirect effects
of knowledge-oriented leadership on firm performance.

5.3 Practical implications

Providing current information about KMCs, innovation and organizational performances of
Turkish technology firms, the present study paves the way for practitioners and future
studies. The research results indicate high levels of KOL in firms (3.9). Moreover, firms’
KMCs (4.1) and innovation performances (4.1) are high, as well. However, organizational
performance is lower than other variables (3.8). The fact that organizational performance is
relatively lower despite high innovation performance may be because of insufficient
marketing activities. This part should be investigated in future studies. Technology
development zones in Turkey have been established to support firms in producing
advanced technology products and increase innovation in general (Ministry of Science,
Industry and Technology, 2018a). The research findings indicate that technology
development zones in Turkey operate in line with their establishment purposes. In this
regard, the present study contributes not only to firms but also to public authorities.
Furthermore, considering that KMC and innovation performance serially mediate the
relationship between knowledge-oriented leadership and organizational performance, we
K suggest firms to pay attention to KOL and take into consideration the knowledge version of
leadership during employment processes.
Managers in knowledge-intense firms may follow the recommendations below to engage
in knowledge-oriented leadership behavior. Managers should promote learning through
encouraging employees intellectually, facilitating learning processes via motivation and
trainings, supporting creative ideas (Bryant, 2003; Berraies and Zine El Abidine, 2019),
prompting employees to use their intellectual background, promoting a learning climate that
tolerates mistakes and guiding employees on how to acquire and integrate knowledge
(Shariq et al., 2019; Zhang and Guo, 2019). In addition, managers should reward knowledge
creation and application and adopt the perspective of management by exception to promote
knowledge behavior within the organization (Birasnav, 2014; Shamim et al., 2019).
Employees may not always be willing to create, share and apply knowledge. Therefore,
managers need to convince and motivate their employees to improve their knowledge
behavior. To reach this end, managers must keep communication channels open to ensure a
match between employee expectations and organizational goals (Ribière and Sitar, 2003). As
a result, we turn it into a slogan and recommend firms the following perspective: more
innovation for strong performance; a strong KMC for innovation; and for all, a strong
knowledge-oriented leadership.

5.4 Limitations
This research has several limitations. First, it was carried out on the firms operating in
technology development zones in Turkey. Future researches can be carried out on the firms
outside of the technology zones. Second, this research was conducted in Turkey. Future
researches can focus on the firms operating in technology development zones in different
countries. This may enable comparison between countries. Third, this is a cross-sectional
study. Therefore, it does not reveal the changes in research variables over time.
Longitudinal data collection is recommended for future studies (Podsakoff et al., 2003).
Fourth, the research data were collected only from the firms operating within technology
development zones in Turkey. For this reason, the research findings may not be generalized
to different contexts (e.g. other industries and countries). The study was conducted in a
specific national context. Readers should be careful when generalizing the results of any
country-based research to different contexts. However, it is possible to generalize the
research findings to other technology firms in Turkey.

5.5 Suggestions for future research

The current research examines the innovation and organizational performance antecedents
with a limited perspective. Future researches may include knowledge-oriented culture into
the research model. Knowledge-oriented culture refers to a set of organizational values,
fundamental beliefs and norms which serve as a common reference to the employees who
generate, share and apply knowledge for the success of knowledge-oriented practices
(Ferreira Peralta and Francisca Saldanha, 2014; Mohammad Migdadi, 2009). Furthermore,
competition level and uncertainty can be incorporated into the model as moderator variables
so that possible changes that could emerge in a highly competitive and uncertain
environment can be observed in the context of the relationships between variables. For
instance, uncertainty and a competitive environment could change the level of relationship
between innovation performance and organizational performance (Jansen et al., 2006).
Because of instable conditions in the Middle East, sometimes the atmosphere of uncertainty
emerges in Turkey. “Geopolitical instability in the region continued to be the biggest threat
for growth of the technology sector” (Deloitte, 2016, p. 64). Besides, there is an intense
competition between Turkish firms and foreign firms (Turkish Chamber of Mechanical Serial
Engineers, 2018). In addition, knowledge-oriented human resource practices may be needed mediation
for knowledge-oriented leadership (Chiang and Shih, 2011). Therefore, knowledge-oriented
human resource practices can be included into the research model in future researches.
analysis

5.6 Conclusion
In this study, a research model that examines the chain of relationship between KOL and
organizational performance was tested. Drawing on knowledge-based theory, contingency
theory of leadership, social learning theory and resource-based view, this research model
was developed. Data obtained from the senior executives of the firms were used to examine
the above-mentioned relationships. The findings are presented below, respectively. First,
KOL affected KMC positively. Second, KMC affected IP positively. Third, IP affected OP
positively. Fourth, KMC mediated the relationship between KOL and OP. Fifth, IP mediated
the relationship between KOL and OP. Sixth, the findings indicated that KMC and IP
serially mediate the effect of KOL on OP. Accordingly, KOL established eligible conditions
for increasing KMC. Increased KMC turned into innovation, and organizational performance
increased eventually.
Regarding the theoretical contribution, this study makes several contributions to the
literature in the following ways. First, only a few studies empirically examined KOL.
Therefore, the current study contributes to expanding the literature on KOL. Second, to the
best of the authors’ knowledge, this study is the first in the literature that reveals the fact
that KOL is effective in increasing organizational performance. Third, in the current study,
the chain of relationship showing how KOL increases organizational performance was
analyzed via the serial mediation model. In the context of practical contributions of the
study, it can be argued that the firms expecting to have a higher organizational performance
should pay more attention to KOL that enhances KMC and innovation performance. As a
result, we turn it into a slogan and recommend firms the following perspective: more
innovation for strong performance; a strong KMC for innovation; and for all, a strong
knowledge-oriented leadership. In the light of these contributions, it can be highlighted that
the current research provides beneficial information to the theory and practice.
There are several limitations to keep in mind when using the results of this study. First,
this research was conducted in a specific national context involving Turkish firms. It is
important to emphasize that readers need to be cautious when generalizing the results to
different contexts (e.g. other industries and countries). Second, this is a cross-sectional study.
Therefore, it does not reveal the changes in research variables over time. Longitudinal data
collection is recommended for future studies. In terms of recommendations for future
research, this research provides the following recommendations. First, future researches
may include knowledge-oriented culture into the research model. Knowledge-oriented
leadership style may play an important role in shaping knowledge-centered culture. Second,
knowledge-oriented leadership may require knowledge-oriented human resources practices.
For example, knowledge-oriented leadership may require knowledge-based recruitment,
knowledge-based training and knowledge-based promotion. Therefore, knowledge-oriented
human resources practices may be included in the research model in future research. Third,
competition level and uncertainty can be incorporated into the model as moderator
variables. In this way, changes in the relationship between variables in a competitive and
uncertain environment can be observed. Considering the fact that political uncertainties are
experienced in Turkey sometimes, it can be better understood how appropriate this proposal
is.
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About the authors

Dr Mert Gürlek is a assistant professor at the School of Tourism and Hotel Management, Burdur
Mehmet Akif Ersoy University, Turkey. He holds a BA and MA in tourism management. Moreover,
he has double doctorate degree. Firstly, he holds his PhD in tourism management in 2018 from the
Gazi University, Turkey. Then he holds his second PhD in management and organization in 2019. His
research interests include corporate social responsibility, green innovation, and organizational
culture in the hospitality industry. His researches have been published in The Service Industries
Journal, Social Responsibility Journal, Tourism Management Perspectives. Mert Gürlek is the
corresponding author and can be contacted at: mertgurlek89@hotmail.com
Murat Çemberci is an Associate Professor at Yıldız Technical University, Turkey. He teaches
Management and Organization, Business Administration, Entrepreneurship and Logistics. He has a
PhD from Gebze Technical University and has worked as a Manager in the logistics sector. His
research and publications focus on R&D and innovation, innovation management, entrepreneurship,
purchasing and supply chain management and international transportation.

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