Effects of Knowledge Leakage on Knowledge Sharing: the
role of organizational ethical climate
Master Thesis, MSc Supply Chain Management
University of Groningen
Faculty of Business and Economics
Sergios Charavgis
S3193942
Supervisor:
Mr. C. Xiao
1 | P a g e
Table of Contents
Abstract
2
1. Introduction
2
2. Theoretical background
4
2.1 Knowledge sharing
4
2.2 Knowledge leakage
6
2.3 Organizational ethical climate
8
2.4 Conceptual model
9
3. Methodology
9
3.1 Sample and procedure
10
3.2 Measures
10
3.3 Control Variables
11
3.4 Reliability and validity
12
3.5 Common method bias
13
Abstract
Although knowledge sharing among firms offer opportunities to enhance their competitive advantage, it also carries the risk of potential knowledge leakage. This phenomenon is the dark side of knowledge sharing and can cause severe problems to companies. In particular, this study examines the effect of knowledge leakage risk on knowledge sharing and whether supplier ethical climate can mitigate this effect. These relationships are examined in an inter-organizational level among suppliers and buyers. For doing so, this study takes the supplier perspective. A survey of 126 supplying firms from Greece, China and the Netherlands indicates that the risk of knowledge leakage does not influence inter-organizational knowledge sharing among buyers and suppliers. Moreover, organizational ethical climate was found not to negatively moderate this relationship, but is proved that it has a strong and positive relationship with knowledge sharing. These results further expand our understanding about positive and negative factors that affect knowledge sharing. Theoretical insights are provided regarding the role of organizational ethical climate in knowledge sharing. Furthermore, this study identified that the risk of knowledge leakage is not always detrimental for inter-organizational knowledge sharing. These findings suggest that managers should comprehend the significance of investing in the creation of ethical values within their organizations in order to enhance effective knowledge sharing.
Keywords: knowledge sharing, knowledge leakage, organizational ethical climate
1. Introduction
In recent years, collaboration with trading partners through knowledge sharing has become essential for organizations to remain competitive (Yang & Wu, 2008). However, the considerable increase of incidents in which sensitive knowledge has been revealed by widespread adoption and exploitation of boundary spanning IT systems (Mishra & Bhaskar, 2011), make organizations more sceptical and hesitant concerning knowledge sharing. In other words, knowledge transfer across organizational boundaries occasionally causes negative consequences as reputation damage, loss of revenues and productivity (Ahmad, Bosua, & Scheepers, 2014). However, strategic collaboration between firms requires knowledge sharing in order to enhance strategic assets and competencies of both firms . Unavoidably, firms are exposed to the risk of exploitation of their owned knowledge from business partners due to opportunistic behaviours . Furthermore, frequently employees’ mistakes occur through the procedures and mechanisms of knowledge sharing and
consequently significant knowledge is exposed to 3rd hands . This is the dark side of
knowledge sharing and is called ‘’knowledge leakage’’ (Frishammar, Ericsson, & Patel, 2015). Risk of knowledge leakage is defined as the risk of losing knowledge intended to stay within a firm’s boundaries (Frishammar et al., 2015).
innovation performance (Ritala, 2015) and the threat of losing organizational competitive advantage (Ahmad, 2014). These studies reveal that knowledge leakage is a detrimental factor that negatively influences knowledge sharing among partners. For dealing with the risk of knowledge leakage, firms use protection mechanisms that vary from informal to formal . Formal mechanisms such as the establishment of contracts (Jiang, 2013), decision-making strategies, and knowledge risk management (Parker, 2012) and other various strategies depend on the kind of the transferred knowledge (Tan, Wong, & Chung, 2016). As far as informal mechanisms, Jiang (2013) examines the effect of goodwill trust that prove to have a U-shapped relationship with knowledge leakage and competence trust that influence knowledge leakage negatively. Nevertheless, extensive look in the literature reveals that informal mitigation mechanisms for knowledge leakage incidents have not yet been explored in depth. Therefore, questions arising concerning what role other informal mitigation mechanisms can play in mitigating the risk of knowledge leakage and if it can enhance inter-organizational knowledge sharing among firms.
Jiang (2013) highlights the importance of formal contracts in reducing the risk of knowledge leakage in inter-organizational knowledge sharing. In the same line, Parker (2012) identified that knowledge management governances as knowledge risk management and decision-making mechanisms play a crucial role in mitigating the risk of knowledge leakage. Additionally, Tan, Wong, & Chung (2016) proposed a mitigation framework for reducing the risk of knowledge leakage in alliances, based on the type of knowledge (tacit, explicit) and the life cycle (short, long). This two-dimension framework presents the 4Cs, which are contract, contain, control, cultivate and suggest knowledge leakage mitigation strategies for each category respectively.
and knowledge sharing will be negatively moderated by organizational ethical climate, as it decreases the misbehaviour of employees towards their organization (Valentine, Greller, & Richtermeyer, 2006). In addition, effects of knowledge leakage on knowledge sharing have been examined thoughtfully concerning strategic alliances and inter-firm collaborations (Frishammar, Ericsson, & Patel, 2015; Jiang et al., 2013; Ritala et al., 2015). Nevertheless, no research has been conducted regarding the impact of knowledge leakage on inter-organizational knowledge sharing among suppliers and buyers, and more specifically by taking the supplier perspective.
The aim of this study is to discover the role of suppliers’ ethical climate in mitigating the risk of knowledge leakage in inter-organizational knowledge sharing among buyers and suppliers. In order to achieve this purpose, the following research question arises: How supplier’s ethical climate mitigates the risk of knowledge leakage in inter-organizational knowledge sharing among buyers and suppliers? In order to provide an answer to the above question a joint survey will be conducted. Samples of 126 supplying firms from the sectors of automobile, healthcare and electronics will be gathered and the results will be examined in depth through scientific methods. Moreover, the primary goal of this research is to contribute by expanding the existing literature and provide insights for further understanding of knowledge sharing. Finally, managerial contribution is provided by proposing new ways for mitigating knowledge leakage risk and suggestions for improving knowledge management policies in buyer and supplier relationships.
The remainder of this paper is organized as follows. Firstly, in section 2 review of the relevant literature and development of hypotheses are presented. Afterwards, in section 3 description of the methodology is discussed. Next in section 4 and section 5 analysis and discussion parts are followed respectively. In the final section conclusions are presented.
2. Theoretical background
In this section the constructs of knowledge sharing, knowledge leakage and the organizational ethical climate are reviewed. The theoretical background and the relationships among the constructs are presented. Development of hypotheses is following and finally the conceptual model is depicted which provides a graphical representation of the three variables and the relationship between them.
2.1 Knowledge sharing
(2004) defines knowledge sharing as a provision of information, ‘’know-how’’ and a way to collaborate with other firms or individuals in order to solve problems, develop innovative ideas or implement policies. Thus, knowledge sharing is a way in which individuals or organizations transfer their knowledge in order to accomplish common purposes. Regarding supplier and buyer relationships, Cheng (2011) states that knowledge sharing illustrates the procedure of exchanging crucial knowledge concerning timetables, distances, risks and benefits. Many authors labelled knowledge sharing as knowledge transfer (Argote & Ingram, 2000; Battistella, De Toni, & Pillon, 2016; Reus, Lamont, & Ellis, 2016) and knowledge flow (Appleyard, 1996) as their definitions are closely related.
Knowledge sharing is categorized in intra-organizational knowledge sharing and inter-organizational knowledge sharing. Intra-organizational knowledge sharing refers to the internal movement of knowledge within organizational boundaries (Staples & Webster, 2008), while inter-organizational knowledge sharing is defined as controlling and coordinating knowledge among organizations (Loebbecke, van Fenema, & Powell, 2016). Organizations share tacit and explicit knowledge. According to Nooshinfard & Nemati-Anaraki (2014), tacit knowledge is difficult to express or formalize, and so it is difficult to share. Furthermore, tacit knowledge contains complex and abstract information that can be acquired through the passage of time. On the other hand, explicit knowledge is known as ‘’hard’’ knowledge and it is expressed and shared formally. It is ordinary, simpler, accessible knowledge, which is easier to be shared among organizations.
That leads to more efficient supply chains by enhancing their agility, adaptability and predictability. Furthermore, knowledge sharing in an inter-organizational stage enhances the R&D and innovations (Cheng, 2011; Cheng et al., 2008). Cooperative collaboration among firms by sharing expertise information creates a beneficial environment that increases significantly innovation efforts for new products.
However, knowledge sharing among organizations has its drawbacks and negative effects. There is a risk of exposing valuable knowledge to ‘’wrong hands’’ that can lead organizations to lose their competitive advantage and threaten even the existence of a company (Ritala et al., 2015). Risks are also presented with R&D issues as accessibility of knowledge in a partnership can be exploited by partner’s benefits (Frishammar et al., 2015). As the focus of this study is on supplier perspective, knowledge sharing for this paper will be addressed as the degree to which supplier’s exchange knowledge in an inter-organizational level, with their major buyer.
2.2 Knowledge leakage
As mentioned in the previous section, knowledge leakage is the loss of knowledge, which should stay within a firm’s boundaries (Frishammar et al., 2015). Jiang (2013) defines knowledge leakage as the extent to which organizational internal knowledge is intentionally appropriated or unintentionally transferred to external stakeholders. This definition implies that knowledge leakage is divided into two categories, intentional and unintentional knowledge leakage respectively. Unintentional knowledge leakage takes place when employees are unaware that they reveal knowledge to external firms (Husted & Michailova, 2010). Collaboration with partners causes over-enthusiasm and employees tend to share confidential knowledge unconsciously (Ritala et al., 2015). Additionally, lack of control mechanisms over the organizational boundaries makes internal knowledge sensitive for leak incidents (Jiang et al., 2013). Other behavioural aspects as curiosity and passion can influence this phenomenon (Sié & Yakhlef, 2009). Accidents are part of the life and so unavoidably in many cases occur. On the other hand, intentional knowledge leakage is purposeful exposure of valuable and significant knowledge to external firms (Parker, 2012). This can be the result of disloyalty towards its own firm and can be defined also as betrayal (Hoecht & Trott, 2006). Knowledge sharing between partners poses the threat of opportunistic behaviour in a relationship. Previous studies highlight the role of opportunistic behaviour, which take place when employees transfer knowledge to competitors in order to achieve personal ambitions (Kale, Singh, & Perlmutter, 2000).
exists for knowledge leakage and many authors characterize it as an underdeveloped topic (Ahmad et al., 2014; Durst, Aggestam, & Ferenhof, 2015; Frishammar et al., 2015). Knowledge leakage can have negative consequences for the firms. Exceptions exist when organizations diffuse knowledge intentionally to external firms, aiming at sabotaging or confusing competitors (Ferdinand & Simm, 2007). In this study, this case is excluded and focuses explicitly on the negative consequences of this phenomenon. Some of these effects can be described as the risk of loss of revenue, reputation impairment, confidentially damage among firms and creation of new competitors (Ritala et al., 2015). Majority of the later literature refers to the impact of knowledge leakage upon R&D issues. Exposure of valuable knowledge to competitors, can negatively influence organization’s competitive advantage and threat its existence as well (Frishammar et al., 2015; Ritala et al., 2015). Tan (2016) argue that higher integration among partners leads to a higher risk of knowledge leakage. In the same line, Hoecht & Trott, (2006) underlie that knowledge leakage is closely related to strategic cooperation, as closer strategic partnership results in a greater risk of knowledge loss. In this research, knowledge leakage is examined as the risk of exposing organizational sensitive knowledge to external partners either intentionally or unintentionally. More specifically, the risk of diffusion essential knowledge from the supplier to its major buyer.
Even though the advantages that firms gain through inter-organizational knowledge sharing, there is always a dark side of it that lurk dangers (Frishammar et al., 2015). Sometimes collaborations and knowledge exchange among firms may lead to bigger losses than gains, due to the knowledge leakage (Daghfous, Belkhodja, & Angell, 2013). Knowledge leakage in a strategic collaboration may damage a firm irreparably and thus also the inter-organizational relationships (Oxley & Sampson, 2004). Frequent incidents of this phenomenon, occurs in strategic alliances for developing R&D projects. Inter-organizational collaboration through knowledge sharing among firms for innovation purposes can be exploited by opportunistic behaviour from partners for accomplishing its own purposes (Frishammar et al., 2015). This leads organizations to lose a competitive advantage, loss of potential revenues and threatens the existence of a firm. Confidentiality in inter-organizational knowledge sharing is considered as essential foundation for a successful cooperation (Gurcaylilar-Yenidogan, 2014). An imminent knowledge leakage incident reduces confidentiality and damages the relationships among firms (Safa & Von Solms, 2016). Consequently, this makes organizations more hesitant to exchange knowledge and may even lead to termination of a relationship. Risk of knowledge leakage decreases the credibility in a partnership and the willingness for inter-organizational knowledge sharing. Thus, it is expected that knowledge leakage negatively impacts knowledge sharing among suppliers and buyers. These arguments are formalized in the following hypothesis:
2.3 Organizational ethical climate
Organizational ethical climate is defined as: “the shared perceptions of what is correct behaviour and how ethical situations should be handled in an organization” (Victor & Cullen, 1988, p. 81). It is one of the basic elements of organizational culture as it is directly related to organizational ethical perceptions of employees and organizational practices (Victor & Cullen, 1987). Another definition characterizes ethical climate as “a type of work climate that is best understood as a group of prescriptive climates reflecting the procedures, policies, and practices and its respective moral consequences” (Martin & Cullen, 2006, p. 177). In other words, organizational ethical climate refers to organizational values, principles and guidelines that are promoted by a firm in order to establish a concrete understanding of the business activities (Valentine et al., 2006). Ethical work climate defines which attributes are correct or incorrect and establishes behavioural rules within an organizational environment (Nedkovski, Guerci, De Battisti, & Siletti, 2017).
Prior studies have shown that organizational ethical climate is a multi-dimensional construct. Victor & Cullen (1988a) suggest five types of organizational ethical climate consisted of instrumental climate, caring climate, independence climate, rules climate, law and code climate. Most recently, Martin & Cullen (2006) came up with a three-dimensional organizational ethical climate, consisting of the characteristics of principle, benevolence and egoism. Nevertheless, some studies are restricted to apply it as a one-dimensional construct (Hsieh & Wang, 2016; Tziner, Felea, & Vasiliu, 2015) and others as a multi-dimensional (Lau, Tong, Lien, Hsu, & Chong, 2017; Nedkovski, Guerci, De Battisti, & Siletti, 2017). Organizational ethical climate proved to be influential towards employees’ behaviour. Valentine, Greller & Richtermeyer (2006) argue that plays a major role in mitigating violating behaviours within an organization. In the same line, Adams, Tashchian, & Shore (2001) underlie that employee’s behaviour is positively related with organizational ethical climate. Tziner (2015) argue that positive ethical climate booster employee commitment in an organization. Additionally, its role identified to be crucial in establishing long-term relationships with customers (Schwepker, 2005). Organizational ethical environment generates trust and commitment towards potential customers and thus guarantees successful agreements. In this study, it is considered as the ethical values that are provided by a supplying firm in order to enhance the commitment internally and towards it.
relationship among organizational ethical climate, employee’s characteristics and rule breaking. The mechanism of organizational ethical climate proved to negatively moderate this relationship as it decreases the misbehaviour of employees regarding various employees’ characteristics. Furthermore, Oncer & Yildiz (2012) proves that organizational ethical climate fosters employee’s commitment toward their organization. The existence of organizational ethical climate motivates employees to become loyal and devoted towards their firm. It fosters moral perceptions, mitigates deviant behaviours, boosts commitment in partnerships and enhances ethical values of employees. So, it is expected that the existence of supplier ethical climate will negatively moderate the relationship of knowledge leakage and inter-organizational knowledge sharing among buyer-supplier. This statement is formulated in the following hypothesis:
H2: Organizational ethical climate negatively moderates the effect of knowledge leakage on inter-organizational knowledge sharing.
2.4 Conceptual model
Finally, understanding the impact of the moderating effect of supplier’s ethical climate to the relationship of inter-organizational knowledge sharing and knowledge leakage risk will extent the existing literature. Furthermore, it will provide valuable insights for future strategies regarding mitigation of knowledge leakage risk in inter-organizational knowledge sharing among firms. To sum up, the above discussion lead to figure 1 that depicts the graphical representation of the conceptual model.
H2
H1
Figure 1
3. Methodology
In order to answer the research question, the two hypotheses that were developed in the previous section were tested. In order to do this, the survey method was applied. Based on
the recommendations of Christer Karlsson (2016), the necessary steps were taken in order to ensure reliability and validity of the gathered data. In the first part, detailed description of the selected sample of this research and an analytic review of the procedure of data collection is presented. Moreover, based on prior studies, the second section demonstrates how the constructs will be measured and the scales that will be used. Afterwards, the examination of the reliability and validity of the constructs is presented to ensure their appropriateness and finally common method bias and control variables are discussed.
3.1 Sample and procedure
As this research is from the supplier perspective, supplying firms were selected from industries such as automobile, healthcare and electronics. Supplying firms who are doing business in these sectors are considered as knowledge intensive due to the need of continuous exchange of knowledge between their company and their customers . As many studies are restricted to conduct research only in one country, this study examined supplying firms from multiple countries and more specifically from Greece, China, and the Netherlands. Multiple countries instead of one were selected in order to provide more generalizable results. In total 126 questionnaires, were answered from managers of supplying firms and more specifically, 43 in Greece, 56 in China and 27 in the Netherlands. In overall, 461 questionnaires were distributed to supplying firms, in which 126 were considered as valid and appropriate. Furthermore, 35 questionnaires were invalid because they were partially completed and finally the rest 300 questionnaires were not answered at all.
One questionnaire was distributed to two managers per company and both managers had to complete the same questionnaire as the way of multiple respondents was applied for this study. The managers were responsible to split the questionnaire and each manager was requested to answer the questions that were more relevant to his/her field. Before the supplementation of the questionnaires, participants were requested to read the cover letter in order to provided them with a detailed overview of the content of the survey and to ensure that they suited with the requirements of this survey. Additionally, the cover letter reassured the participants regarding the confidentiality of their responses. Contact with the companies was done via email, phone or with direct contact. After having contacted with the supplying firms and get approval for their participation, the questionnaires were delivered via email. When managers sent back the answered questionnaires, contact with the managers was conducted for confirmation and discussion of problems that might have encountered during the supplementation of the questionnaires. Throughout the procedure managers could contact instantly with the supervisors of the research and ask clarifications if they were needed.
3.2 Measures
study. For each construct, multiple items were deployed and they were measured based on the Likert scale tool. Likert scales were used, as it is a wide-used measurement instrument for data collection in surveys (Wadgave & Khairnar, 2016). Regardless the fast, efficient, and low-cost capabilities that are offered to researchers, Likert scale has multiple choices and can capture the exact response and feeling of a respondent, for a phenomenon. Furthermore, its ability to easily being understood and its quantifiable capabilities of measuring intangible and behavioural aspects makes this measurement instrument perfectly suitable for this research.
The items that were used for the measurement of constructs derive from questions of prior studies. For the construct of knowledge leakage, the scale of Parker (2012) will be used (Appendix A). An extensive look in the literature revealed that only this scale was used to measure the risk of knowledge leakage. This scale was developed in order to measure the degree of firm's exposal to the risk of losing valuable knowledge in a partnership and the fear of opportunistic behaviour by a partner. So, it comes to the same line with the needs of this study, as the aim of this research is to investigate the risk of knowledge leakage when partners exchange knowledge between them. By using direct questions regarding the risk of losing valuable knowledge and the fear of knowledge appropriation from a partner, this scale suited perfectly for this research. A seven-point scale was implemented from 1 (strongly disagree) up to 7 (strongly agree).
Schwepker (2001) adopted a scale for the measurement of organizational ethical climate that measures employees’ perceptions about practices, procedures, norms, and values that govern ethical decisions in their organizations (Appendix A). The items of this scale measure the degree to which ethical values, codes of ethics and policies regarding ethical behaviour, exist within the company. As they were used to capture the presence and the existence of ethical codes, policies and management of organizations, it is perfectly suitable for this study. It is a widely used scale that consisted of seven questions and uses a seven-point Likert scale (1=strongly agree to 7=strongly disagree).
The scale of Moller and Svahn (2004) was applied to measure inter-organizational knowledge sharing (Appendix A). The items of this scale focus on measuring the extent to which business partners exchange knowledge, experiences, viewpoints and other processes for enhancing each other’s knowledge. It was used from this study to capture the degree to which business partners exchange knowledge for further collaboration, solving problems, developing new products/services and implementation of corporate strategies. The five items are focussed and directed to the same purposes of this study. A seven-point scale was employed, ranging from (1=strongly disagree to 7=strongly agree).
3.3 Control Variables
than SMEs. It is predicted that as the number of employees rises, the knowledge sharing in inter-organizational level will be increasing as well and the opposite. The control variable of relationship length demonstrates the number of years in which a supplying firm and its major buyer have established a relationship. It was used due to the belief that longer relationships in terms of time may lead to higher levels of knowledge sharing. Furthermore, the firm age which calculates the sum of years since the establishment of a supplying company was deployed. It is expected that older companies tend to restrict knowledge indoors whereas younger companies have more modern knowledge sharing policies. Finally, two dummy variables were used to control the impact of firm location which depicted the country that each firm is established. China, Greece and the Netherlands have different work culture which may result in considerable discrepancies on inter-organizational knowledge sharing.
3.4 Reliability and validity
Before the final phase of delivering the questionnaires to managers, a pilot test took place. A pre-test was delivered to three managers of different supplying firms. After the supplementation of the questionnaires, participants were requested to answer some extra questions regarding potential problems that might have encountered. The participant’s feedback was used to identify questions that might be problematic, complex, or difficult to comprehend. Finally, an open question requested participants to express their opinions and suggest improvements regarding the questionnaire. Indeed, the pilot test revealed some minor mistakes and misunderstandings, which were addressed by the supervisors. The survey was developed first in English and afterwards it was translated into the native languages in Greece and China. For the Dutch supplying firms, the English questionnaire was delivered to managers without being translated to the Dutch language due to the high level of familiarity with the language. Several native speakers from Greece and China that also have professional knowledge in English language were selected for translating the questionnaires, ensuring that no mistakes would occur. This way was chosen, as it would be easier for participants to completely understand the context of the questionnaires and to avoid incidents of misunderstanding. Finally, the same translators translated all the questionnaires back into English in order to be examined.
as an acceptable one (χ2/df < 3; GFI > 0.9; AGFI > 0.8; CFI > 0.95; NFI > 0.9; RMSEA < 0.05; PCLOSE > 0.05). Due to the fact that one item excluded from the construct of organizational ethical climate, a reliability analysis was conducted in order to re-test the reliability of the new construct. The new construct was found to be reliable with an acceptable Cronbach alpha value (α = 0,857). With regard to knowledge sharing and knowledge leakage no reliability analysis took place as it had been already deployed in previous studies and both constructs proved to be reliable (α = 0,87 for both constructs). All the results can be seen in Appendix B.
Convergent validity was ensured in this study as all the items have an acceptable factor loading (above 0.5). Furthermore, AVE values for the all constructs were above the threshold of 0.5 so yet again convergent validity was approved (see Appendix B). Finally, the discriminant validity was assessed by comparing the AVE of each construct with all the maximum-shared variance (MSV). As AVE values were much higher than the MSV values, discriminant validity was confirmed (Fornell & Larcker, 1981).
3.5 Common method bias
The common method bias could be a serious issue for the reliability and validity of this research. In order to encounter potential issues of problematic and systematic measurement errors it was decided to use the way of multiple respondents. By having two managers answer the same questionnaire it can be ensured that the common method bias will be reduced to a minimum and internal consistency will be ensured. Furthermore, by using the way of common latent factor in Amos software, the common method bias was further tested. By following the suggestions of Podsakoff (2013), firstly the standardized regression weights were calculated with the use of common latent factor and afterwards the same procedure was done without using a common latent factor. The next step was to calculate the differences among the estimates that were found. As the differences between the estimates were less than 0.2 for all the items it can be concluded that the common method bias will not be an issue for this study.
4. Results
the firm’s age is concerned, yet again a relatively high variance in the sample (μ = 34.46, σ = 48.69). It can be seen; the control variables have large variances that expand even the mean values (CV>1). On the other hand, knowledge leakage (μ = 3.64, σ = 1.58), knowledge sharing (μ = 5.30, σ = 0.96) and organizational ethical climate (μ = 5.61, σ = 1.02) have low variation (CV <1).
Table 3
As far as the type of ownership in the sample is concerned 67% are domestic private, 14% are joint ventures, 12% are 100% foreign investments and finally 7% are state-owned. Around the half of the sample (50%) reported that the length of their relationships with their major buyer is ranging from 6 to 15 years. Between 0 and 5 years of relationship’s length with their major buyer were 26 companies and the rest 37 companies had established relationships for more than 16 years. Finally, a lot of variety can be seen in the firm size of the participant’s companies as 30% have between 1 and 49 employees, 32% companies employ from 100 up to 500 employees and 20% of the companies have more than 1000 employees. A detailed description of those statistics is illustrated in the table 4 below.
Age of organizati on 0-5 6-25 26-99 100+ 8 73 38 7 6.45% 58.87% 29.03% 5.65% Table 4
Afterwards, a correlation analysis was conducted (Table 5) in order to examine the correlations and the significant values among all variables that were used. Surprisingly, correlation between knowledge leakage and knowledge sharing is negative and insignificant (β = -0.159, p > 0.05), which indicates that knowledge leakage may not affect knowledge sharing. Nevertheless, knowledge leakage was found to be strongly associated with firm age (β = -0.343, p < 0.01) and relationship length (β = -0.288, p < 0.01). Moreover, it is worthwhile to mention that organizational ethical climate is both strongly and positively correlated with knowledge sharing (β = 0.451, p < 0.01). Knowledge sharing is also highly correlated with the firm size (β = 0.290, p < 0.01), which implies a potential positive relationship between those variables. As far as organizational ethical climate is concerned, a positive and significant relationship only with the firm size (β = 0.405, p <0.05).
Table 5
Table 6
In order to examine the hypotheses, a multiple linear regression analysis was conducted in three models. The first model incorporates and investigates only the control variables and their impact on knowledge sharing. The second model tests the control variables, the direct effect of organizational ethical climate and knowledge leakage on knowledge sharing. Finally, the third model examines the interaction effect of knowledge leakage and organizational ethical climate upon knowledge sharing. The results of the three-step regression analysis were used to identify whether the hypotheses are confirmed by also taking into consideration the control variables. The three-model regression analysis is presented in the table 7 bellow.
In the first model, the results show that all control variables except for firm location do not affect knowledge sharing. Examination of relationship length, firm size and age indicates that they do not affect knowledge sharing as they are found to be statistically insignificant (p > 0.05). Finally, firm location has a significant and negative effect for Greece (β = -0.296, p < 0.05) and Netherlands (β = -0.229, p < 0.05) as compared to China on knowledge sharing.
In the second model, the direct effect of knowledge leakage and organizational ethical climate to knowledge sharing is tested, including also the control variables. In the same line, the regression analysis, indicates that knowledge sharing is not affected by knowledge leakage (β = -0,129, p > 0.05). Thus, hypothesis 1 cannot be supported. As no correlation was found in the correlation matrix (table 5), it was expected to have the same results in the regression analysis. Obviously, firm size, firm age and relationship length did not influence the relationship of knowledge sharing and knowledge leakage. Yet again, the control variables were found not to have any influence on knowledge sharing. Nevertheless, organizational ethical climate has strong and positive relationship with knowledge sharing (β = 0.382, p < 0.01).
Table 7
5. Discussion
Inter-organizational knowledge sharing exposes firms to the risk of losing strategically essential knowledge, as it has been identified in previous studies (Heiman and Nickerson, 2004; . Unarguably, sharing knowledge with external parties or alliances increases the risk of intended or unintended knowledge leakage. Thus, it makes firms more hesitant and sceptical concerning knowledge sharing in collaborations. As knowledge leakage occurs either from opportunistic or accidental behaviour, confidentiality among partners is usually damaged irreparably and results in the decrease of credibility and willingness for knowledge exchange . Thus, by taking into consideration the strength of the arguments and the prior results of relevant studies, the fact that hypothesis 1 is not supported is surprising. This study tested the risk of knowledge leakage in knowledge sharing among suppliers and buyers, by taking the supplier perspective. Previous studies tested this relationship by mostly taking buyers perspective, so it can be stated that this paper differs from previous studies. From this point of view, the risk of knowledge leakage from suppliers to buyers may not affect
knowledge sharing, because suppliers focus mainly on doing businesses and make a profit
fromtheir buyers. For this reason, they perceive knowledge leakage as an issue, but not as a
suppliers have different knowledge sharing policies regarding the risk of knowledge leakage incidents.
Organizational ethical climate has been used in multiple studies in order to test if it performs as a mitigating mechanism of negative phenomena . Previous studies identified a positive influence upon rule breaking behaviours, unethical exploitation and corporate reputation. In this study, the interaction effect of knowledge leakage and organizational ethical climate was not found to influence knowledge sharing, thus leading to the rejection of hypothesis 2. The investment on establishing ethical values in firms fosters moral perceptions, boost commitment in firm and towards its partnerships and finally mitigate deviant behaviours. Nevertheless, the results showed that it couldn’t work as a mitigation mechanism as it has no effect on the relationship of knowledge leakage and knowledge sharing (β = 0.677, p > 0.05). Although, has been revealed that organizational ethical climate has a positive and strong direct effect on knowledge sharing (β = 0.388, p < 0.01). The existence of ethical values contributes to enhancement of inter organizational knowledge sharing among buyers and suppliers. Ethical values work as a guarantee of confidentiality and credibility that decrease scepticism and foster willingness for knowledge transfer in relationships of buyers and suppliers.
From the control variables that were used in this study only firm location was found to affect knowledge sharing. Thus, regardless the number of employees, the relationship length and the number of years since the establishment of the supplying firm, inter-organizational knowledge sharing is not influenced. The fact that no restriction has been applied to control variables may explain this outcome. Examination without delimiting any restrictions caused huge variations in the sample as it can be easily noticed in the firm size (μ = 4415, σ = 27930). For instance, SMEs may share knowledge across organizational boundaries in a lower degree than large-scale companies. Thus, by including large and small enterprises into the sample, there was the risk that the outcomes would be skewed. The same can be stated for the relationship length and firms’ age, as the variation was high as well. A distinction between younger and older firms could possibly lead to different results, as younger firms would tend to share knowledge more intensively. Additionally, the length of the relationship can change the results as short relationship length may indicate alternative outcomes. Finally, it is concluded that Greek and Dutch firms exchange knowledge in a lower degree than Chinese firms. Dutch companies were found to deploy in less knowledge sharing processes than Greek and Chinese firms. Culture in Chinese firms is characterized by high level of collectivism which can be translated into high levels of interaction and collaboration with partners (Rosenbusch & Brinckmann, 2011). So, it is logical to share knowledge more intensively than European firms which they rely more on individualistic policies.
its own characteristics and so do the firms.
5.1 Theoretical implications
The results of this study contribute to knowledge sharing literature in multiple ways. First, this paper supports the argument that knowledge leakage is not always detrimental for inter-organizational knowledge sharing. In the occasion of supplier-buyer relationships, supplying firms do not perceive knowledge leakage risk as a potential barrier for exchanging knowledge with their buyers. This finding is important because knowledge leakage is considered as a harmful phenomenon that is always influencing negatively knowledge sharing . Second, this study shed light on the role of organizational ethical climate as a mitigation mechanism for knowledge leakage in knowledge sharing among buyers and suppliers. In response to the call of , this paper proves that organizational ethical climate cannot contribute as a mitigation mechanism against knowledge leakage risk. Instead, it was confirmed that it has a strong and positive relationship with knowledge sharing. As the role of culture and more specifically the organizational ethical climate has never been tested in the past is an essential finding, which expands the existing literature regarding knowledge sharing policies. Finally, the control variables of firm age, firm size and relationship length are not factors that can influence knowledge sharing among suppliers and buyers. On the other hand, the location that a firm was established, influences significantly the inter-organizational knowledge sharing. In this study, was shown that Chinese firms exchange knowledge more intensively than Greek and Dutch companies.
5.2 Managerial implications
inter-organizational knowledge sharing is not influenced. Although, managers should be acknowledgeable that supplying firms in China are more prone to exchange knowledge with their major buyers than Greek and Dutch firms.
5.3
Limitations
Appendices
Appendix A. Questionnaire
Knowledge leakage
Parker (2012) (α = 0.87)To what extent was your firm exposed to the following negatives from this partnership: (1 = strongly disagree, 7 = strongly agree)
1) Loss of valuable knowledge?
2) Fear that partner uses your proprietary knowledge for their own
interests?
3) Knowledge leakage incidents due to lack of protection mechanisms?
Knowledge Sharing
Moleer and Svalm (2004) (α = 0.87) (1 = strongly disagree, 7 = strongly agree)1) My company provides relevant knowledge to our business partners.
2) My company teams up with business partners to enhance inter-firm learning. 3) My company and business partners jointly organize job training to enhance each
other’s knowledge.
4) My company and business partners share successful experiences with each other. 5) My company and business partners share new knowledge and viewpoints with each
other.
Organizational Ethical Climate
Schwepker (2001) (α =0.72) (1 = strongly disagree, 7 = strongly agree)1) My company has a formal, written code of ethics 2) My company strictly enforces a code of ethics.
3) My company has policies with regards to ethical behaviour
4) My company strictly enforces policies regarding ethical behaviour
5) Top management in my company has let it be known in no uncertain terms that
unethical behaviours will not be tolerated.
6) If a salesperson in my company is discovered to have engaged in unethical behaviour
that results primarily in personal gain (rather than corporate gain), she or he will be promptly reprimanded.
7) If a salesperson in my company is discovered to have engaged in unethical behaviour
promptly reprimanded.
Appendix B
Constructs / measurement
items
1
2
3
Cronbach
Alpha
Parker (2012)
CR= 0.87 AVE = 0.69
Knowledge Leakage
Loss of valuable knowledge.
.768
.87
Fear that the customer uses
.841
.88
Knowledge leakage incidents due to lack of protection mechanisms?
.879
.87
Knowledge Sharing
Moleer and Svalm (2004) CR = 0.87 AVE = 0.52My company provides relevant
knowledge to this customer.
.572
.78
My company teams up with this customer to enhance their inter-firm learning.
.700
.91
My company and this customer jointly organize job training to enhance each other’s knowledge.
.570
.84
My company and this customer share successful experiences with each other.
.842
.92
My company and this customer share new knowledge and viewpoints with each other.
.750
.90
Organizational Ethical
Climate
Schwepker (2001) CR =0.72 AVE = 0.51My company has a formal, written
code of ethics.
.581
.63
My company strictly enforces a
code of ethics.
.777
.91
My company has policies with
regards to ethical behaviour.
.863
.78
My company strictly enforces policies regarding ethical behaviour.
.890
.90
Top management in my company has let it be known in no uncertain terms that unethical behaviours will not be tolerated.
.549
.70
If a salesperson in my company is discovered to have engaged in unethical behaviour that results in primarily corporate gain (rather than personal gain), she or he will be promptly reprimanded.
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