Leadership Behaviors and Knowledge Sharing in Professional Service Firms Engaged in Strategic Alliances

Abstract

Executive Summary This study investigates the influence of transformational and transactional leadership behaviors on knowledge sharing activities in professional service firms in Taiwan and the United States that are engaged in strategic alliances. Sixteen accounting firm branch offices in Taiwan and 135 branch offices in the U. S. were included in the sample population. Ninety-three valid surveys were returned from Taiwanese offices and 72 valid surveys from U. S. offices. The results of the hypothesis testing showed (1) transformational leadership behaviors are a significant predictor of internal knowledge sharing, and (2) contingent reward leadership behaviors are significantly and positively correlated with both internal and external knowledge sharing with customers. The results also showed laissez-faire leadership behavior to be significantly and negatively correlated with external knowledge sharing. Implications for leaders and decision makers are included along with suggestions for future research. Introduction Leadership, knowledge management, and strategic alliances are considered major business topics today. Research related to these topics can be found in professional journals, such as Strategic Management Journal, Harvard Business Review, Organizational Science, Journal of Management, Journal of Marketing, and Academy of Management Journal, from the past 20 years to the present. Recent studies have discussed alliances as important means of sharing, acquiring, and/or transferring knowledge among firms in today's increasingly challenging and difficult competitive environment (lnkpen. 1998; Stuart, 2000: Mowery. Oxley. & Silverman, 1996: Dyer & Nobeoka, 2000; Simonin. 1999). In addition, leadership has been considered an important factor in the success of knowledge-based alliances. For example. Heftier (1994) has noted the following. Strategic alliances require a unique style of leadership. Leaders set the benchmarks for organizational performance. Leaders creating strategic alliances must have a vision of the benefits to be gained in cooperative ventures and help their organizations overcome inhibitions about risk taking and resource sharing (p. 14). Furthermore, Bollinger and Smith (2001) have pointed out that leadership should focus on establishing a culture that respects knowledge, reinforces its sharing, retains its people, and builds loyalty to the organization. Similarly, Bailey and Clarke (2000) have defined knowledge management as how managers can generate, communicate and exploit knowledge for personal and organizational benefit (p. 237). Focus of the Study In the historical development of leadership, much of the research covers leadership traits, behaviors, power and influence, and situational approaches (Yukl, 1989). In recent years, scholars have attempted to streamline and integrate these approaches, and many studies are focusing on identifying the characteristics and value of transformational and transactional leadership behaviors (Bass & Avolio, 1994). This study, therefore, focused on these two leadership models. Prior related research has studied: (1) the relationships between leadership behaviors and knowledge management (Politis, 2001; Ribiere & Sitar, 2003), and (2) the knowledge-based approach in strategic alliance settings (Inkpen, 1996,1998; Dyer & Nobeoka, 2000; Inkpen & Dinur, 1998; Lam, 1997; Mowery et al., 1996; Simonin, 1999; Parise & Henderson, 2001). Almost non-existent, however, is research on the relationship between leadership behavior, both transformational and transactional, and knowledge sharing. Therefore, the purpose of this study is to examine the relationship between transformational and transactional leadership behaviors and knowledge sharing in the strategic alliance setting. Transformational and Transactional Leadership Behaviors Transformational leadership is defined in terms of the leader's effect on followers: they feel trust, admiration, loyalty, and respect toward the leader, and they are motivated to do more than they originally expected to do (Yukl, 1998). …

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