Post on 08-Mar-2023
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Exploring the relationship between ethics, knowledge
creation and organizational performance: case study a
knowledge – based organization
Peyman Akhavan, Majid Ramezan, Jafar Yazdi Moghaddam
Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran, and Gholamhossein Mehralian
School pharmacy, Shaheed Beheshti Medical University, Tehran, Iran
This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here (http://www.emeraldinsight.com/journals.htm?articleid=17101985). Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.
Citation: Akhavan, Peyman, Ramezan, Majid, Yazi, Jafar, and Gholamhossein Mehralian (2014), Exploring the relationship between ethics, knowledge creation and organizational performance, Vine: The journal of information and knowledge management systems, Vol. 44, No. 1, pp. 42-58.
Abstract
Purpose- This research proposes to investigate the relationship between ethics,
knowledge creation and organizational performance.
Design/methodology/approach-In order to run this study, as suggested by the experts,
Nonaka & Takeuchi model was selected for knowledge creation process and Yokel
model was used for organizational performance. In addition, Akhavan et al (2013)
research was applied for organizational ethics dimensions. A conceptual model was
designed based on literature review, and in order to analyze it, employees of a
knowledge- based organization were asked to answer to the questions of a valid
questionnaire. Structural equation modeling was used for studying the relationships
between research variables.
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Findings- Research results imply that there is a positive and strong correlation between
ethics and organizational performance. The relationship between ethics and knowledge
creation processes is also positive and significant but no significant relationship is
observed between knowledge creation processes and organizational performance.
Research limitations/implications – The main limitation of this research is little
researches and literature about ethical issues in knowledge management area.
Originality/Value- Although numerous studies have been conducted with regard to
organizational performance and knowledge creation but the literature is severely deficient
considering observance of ethics in all dimensions of organizational performance and
knowledge creation process, and in terms of analysis of their mutual interactions and
relationships.
Keywords: Ethics, Knowledge Creation Process, Organizational performance
Paper type Research paper
Introduction
Nowadays we are facing a new kind of economy called knowledge-based economy
(Jafari and Akhavan, 2007). In this kind of economy, organizational knowledge and
intellectual capital are accepted as key resources for achieving competitive advantage
(Finn and Torgeir, 2008; Jafari et al, 2009). Furthermore, knowledge which is recognized
as the best form of information should be managed appropriately (Jafari et al, 2007a) so
that the organization can reach competitive advantage (Lakshman, 2009, Akhavan and
Heidari, 2008). In addition, implementation of an effective knowledge management
strategy towards a knowledge-based environment is considered as an important
prerequisite for organizational success. It can be accordingly asserted that purpose of
knowledge management is enhancing of organization’s return on investment rate. In the
scope of knowledge management, it is necessary to apply convenient measures to
convince managers and stakeholders regarding to advantages and values of achievements
in knowledge- based organization (Akhavan et al. 2009).
Therefore, managers must be aware of the aspects and methods through which
knowledge can be established, and they are supposed to recognize the mechanism of
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knowledge application for directing organizational processes, structures, and activities
which will lead to improvement of performance and business (Mills and Smith, 2011).
Additionally, human’s work and lifestyle is rapidly changing with the rapid growth of
technologies, and parallel with these changes, ethics are further taken into consideration
in the course of time. In this regard, information technology ethics and business ethics are
interdisciplinary subjects that are discussed in practical ethics. Information technology
ethics aims at responding questions regarding the ethics of actions and responsibility of
people in the scope of information technology, and ultimate goal of business ethics is to
improve quality of decision-makings and performances at all business levels (Reidenbach
and Robin, 1990). Furthermore, in the domain of divine concepts, ethics are among the
highly emphasized principal themes (Rezaiian and Ghazinouri, 2010).
Therefore, organizational performance regarding to successful knowledge management
implementations require a comprehensive view of all factors involved in them. One of
these factors is human capital factor (Jafari et al, 2007b). Human capital ethical issues
could help the promotion of organizational performance and better implementation of
knowledge management processes (Akhavan et al, 2013). Whereas, many studies so far
have been carried out in the field of organizational performance and knowledge
management, but related references are severely deficient in terms of taking into account
the ethics in all dimensions of organizational performance and knowledge management
processes as well as in terms of analysis of their mutual interactions and relationships.
According to the above discussions, the current research intends to depict the role of
ethics and the knowledge creation processes in organizational performance.
Literature Review
Ethical issue
By growing postpositivistic approaches in the field of social sciences, we are facing with
“business ethics” as a concept which has been added to the management glossary. The
domain of this concept is to improve the moral quality of decision-making and
performance in all business levels. What definitely seems reasonable, is having a global
approach towards the business ethics and seeking for it in international level. Business
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ethics is a type of applied ethics which is broadly diverse in terms of attitudes and
approaches like all other applied kinds of ethics (Singer and Singer, 1997).
Holden (2000) cited that: “Ethics are not simply created by humankind but instead result
from human nature which constitutes the essential frame of laws; in fact, human laws
follow the ethics. The word “ethics” represent the standards and ideals which embrace a
group or a community of people. In Webster dictionary, ethics are defined as disciplined
dealing with what is good and bad or with moral duties and commitments. Ethics refers to
good and bad attributes, conducts, and intentions in which case it is accompanied with
adjectives such as good and bad or nouns such as goodness and badness. Ethics is a
branch of philosophy analyzed as a norm-based science since it pertains to guiding norms
of human behavior, and from this aspect, it can be distinctively distinguished from
mainstream sciences like mathematics, or natural sciences like chemistry and physics”.
Knowledge Management
Knowledge management is assumed in two forms: knowledge management as objective
and knowledge management as a process. Knowledge management as objective mostly
stresses on knowledge exchange while knowledge management as process try to make
the tacit knowledge available. In other words, knowledge management is also referred as
“knowledge conversion”. In knowledge transformation cycle, tacit and explicit
knowledge is transformed into each other (Crawford, 2005). The tacit knowledge is a
kind of strictly personal knowledge and is formed difficultly and cannot be easily
presented in certain frames, and it has an intangible identity and comprises subjective
models, beliefs and the knowledge of how to do the tasks. Tacit knowledge cannot simply
be described by words. Explicit knowledge can be expressed through verbal or written
language and is therefore easily transferable. It is easily acquired, transferred and
exchanged (Yang, 2007).
Knowledge creation has been defined from several approaches that can widely be
classified into two views: a “stock” and a process” view. The stock view suggests that
knowledge creation contributes to a “corporate knowledge stock” and assumes that a
tangible measurable performance function is available (Samaddar and Kadiyala, 2006),
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and like physical assets, the current knowledge stock depreciates as some knowledge
becomes redundant or declines in importance (Gourlay, 2006). The process view defines
knowledge creation as “dynamic, interactive and process-oriented, as well as being
focused on the relationships that are involved in creating new knowledge” (Samaddar and
Kadiyala, 2006).
Nonaka and Takeuchi’s knowledge conversion model (1995) shows that mutual
conversion of tacit and explicit knowledge is a four-dimensional process including
socialization, externalization, combination and internalization. Socialization is the
conversion of tacit knowledge into a new tacit knowledge like sharing the experiences
among organization’s members. Externalization shows the conversion of tacit knowledge
into a new explicit knowledge such as documentation of best experiences. Combination is
conversion of explicit knowledge into a new explicit knowledge like assessing papers and
reports in a same sector and finally, internalization is conversion of explicit knowledge
into a new tacit knowledge such as learning from written collective discussions.
Organizational Performance
In the turbulent competitive area, companies are trying to adapt themselves to the
changes by creating sustainable advantages by increasing organizational performance.
Previous researches on organizational performance have focused on financial
performance. Although financial measures might be related to strategy and long-term
target of business, but cannot create advantages for the organization in an intense
competitive environment (Wu and Liu, 2001). Skerlavaj et al (2007) cited that evaluation
of organizational performance is not possible without taking the organizational objectives
into account. Therefore in 1994, American Institute of Certified Public Accountants
(AICPA) recommended incorporating non-financial information in performance criteria
as well; this information can reflect intellectual capital and social responsibility as well as
promotion of organizational knowledge level (Wu and Liu, 2001). Conventional
performance criteria included financial indices such as: Return on Investment (ROI) and
Financial Circulation (Parker, 2000) and etc. Harper (1984) mentioned seven dimensions
for performance: productivity, unit cost, price, factor proportion, cost proportion, product
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mix and input allocation. Kaplan and Norton (1997) used the following five indices for
depicting the strategy through presenting balanced score card (BSC): Financial
perspective, Customer’s perspective, internal process perspective, and learning and
growth perspective. Furthermore, Yokel (2008) has explained the performance
determinants in three dimensions as: output, adaptability and human resources.
Accordingly, Yokel’s model is used in the current research for examining performance of
the organization under study. In table 1, we have summarized the models of performance
measurement.
Table 1: Performance models, frameworks or systems extracted from literature
Model/ Framework/ System
year Dimentions/ Levels Focus
Performance measurement framework- Anthony
1965 Strategic planning, management
control, operational control Management control
Performance monitoring system- Altman
1979 Data, analysis, action Programme objectives
Performance pyramid- Cross and Lynch
1989
Corporate vision, accountability of the business unit, competitive dimensions for business operating systems, and specific operational criteria
External/internal cascading measures around market, production
European foundation for quality management (EFQM) excellence model
1991
Enabler: leadership, people, strategy, partnerships & resources, product and services
Results: people results, customer results, society results, business results
TQM principles; self-assessment and reflections
Balanced scorecard (BSC)- Norton and Kaplan
1992 Financial, customer, internal process and learning and growth
Stakeholders; translating strategy into action
Framework for organizational control systems- Otley
1999 Objectives, strategies, performance targets, incentives, information flows
Management of organizational performance
Performance prisme- Kennerly and Neely
2000 Stakeholder satisfaction, strategies, processes, capabilities, stakeholder
Stakeholders; cause and effect relations
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contributions
Performance measurement framework- Rouse and Putterill
2003 Combination of stakeholder evaluation and strategy with service delivery and process alignment
Balancing between macro and micro views of the organization and their interactions; managing work ather than cost; holistic view to organization
Performance measurement framework- Garrat (Walker, 2008)
2003
Ratios: profit/sales, sales/capital employed, profit/capital employed, sales/inventories, sales/debtors, sales/no. of employees, sales per £ of emoluments
Principle of the supervision of management; efficiency
Performance measurement framework- Lee
2008
Stakeholder satisfaction, organizational communication, team collaboration, strategic performance, knowledge management, organizational growth
Non-financial performance; stakeholders; strategy; internal processes
Research Background
In this section, summary of some research which somewhat relate to the respective
subject is presented:
Tsang Ho (2008) in a research entitled “The relationship between knowledge
management enablers and performance” analyzed the role of knowledge management
enablers in financial performance through using performance indices of knowledge
management. This research concluded that there is a positive and significant correlation
between enablers of knowledge management and performance indices of knowledge
management such as strategy and leadership. The relationship between performance
indices of knowledge management and financial performance was also reported to be
positive and significant. Consequently, enablers of knowledge management positively
affect the financial performance through performance indices of knowledge management.
Zack et al. (2009) studied the relationship between indices of knowledge management
and performance outcomes through an exploratory analysis. They specified 12 indices for
knowledge management via searching the literature of the subject. Their findings proved
that a direct and significant relationship holds between indices of knowledge
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management and organizational performance. Organizational performance was also
shown to be directly and significantly related to financial performance. It was thereby
inferred that organizational performance acts as an intermediate link between indices of
knowledge management and financial performance.
Svensson and wood (2011) proposed a conceptual framework of business ethics
throughout all sectors of the organization in terms of ethical structures, ethical processes,
and ethical performance. They deduced in their research that the proposed framework
provides a basis for the development and refinement of ethics interactions in the
organization and can be utilized for managing and evaluating applications of business
ethics in the organization. Moreover, implementation of the proposed conceptual
framework over the organization contributes to reforming structures and processes
leading to enhancement of organizational capabilities and promotion of organizational
performance.
Rezaiian & Ghazinouri (2010) in their research entitled “Modeling the role of ethics in
success of knowledge management systems” investigated the role of ethics in duties of
the knowledge management process; of course, the general pattern of knowledge
management was used for knowledge management process. Research result implied that
there exists a significant correlation between ethics and indices of knowledge
management process. The correlation holds between criteria such as individual and
collective trust, honesty, intellectual property right, help and empathy, commitment,
accountability, working conscience and carefulness in authenticity from one aspect and
the indices of a general pattern of knowledge management including creation, organizing,
sharing and application of knowledge from the other aspect.
Akhavan et al (2013) explored the role of ethics in knowledge management process in an
industrial organization. The ethical indices that they used in their research are shown in
Table 2.
Table 1 Ethics indices and their citations (Akhavan et al, 2013)
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Citations Area
Land (2007), Chua (2002) Accountability
Huysmans and Wit (2004) Working Conscience
Azmi (2010), Chua (2002), Nahapiet and Ghoshal (1998) Commitment
George (2008), Inkpen (2005), Hutchings and Michailova (2004)
Collective trust
Galford and Drapeau (2003), Mirzaeei et al (2009) Organizational trust Azmi (2010) Secrecy Azmi (2010), Lang (2004), Renko (2001) Intellectual property right
Azmi (2010) Care in authenticity
Azmi(2010), Lang (2004) Honesty Azmi (2010), Huysmans and Wit (2004), Chua (2002) Helping and empathy with
others Jordan (2010), Bove and Johnson (2009), Huang and Huddleston (2009)
Loyalty
Calof and Smith (2012), Johnston (2012) Foresight
Sayce (2012), Khenifer and Moghimi (2009) Trusteeship
AL-Aali (2008) Fair Behavior
Khenifer and Moghimi (2009) Humility
AL-Aali (2008) Criticism – taking Harper et al (1998) Council with others Neck et al (2000), Raps (2005) Perseverance in
works Ferris et al (2008) Affability Hsiang and Yang Kuo (2003) Self – control
Research model and hypotheses In our recent research (Akhavan et al, 2013) we investigate the opinions of six experts for
identifying the suitable ethics dimensions. These experts were KM professionals working in
different industries which were completely familiar with ethics and most of them took part in
setting of organizations’ credo and ethical statements of the corporations. They have different
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positions like: managers, deputy, supervisor and senior experts. The dimensions were
designated as shown in Table 3.
Table 3 Ethics dimensions
Row Dimensions Indicators
1 Value - based View
Collective trust Organizational trust Honesty Fair behavior Humility Criticism – taking Perseverance in works
2 Team working culture Council with others Helping and empathy with others Affability Self – control
3 Commitment and responsibility Responsibility Working Conscience Commitment Loyalty Foresight
4 Intellectual ownership and Trusteeship
Secrecy Intellectual property right Trusteeship Care in authenticity
Source: Adapted from Akhavan et al (2013)
Figure 1 shows the conceptual model of this research according to literature review band
experts’ opinions. In this model, ethics are considered as independent variable and
dimensions of knowledge creation process (KCP) and performance are taken as
dependent variables. The main purpose of the current paper is to explore the role of ethics
and the knowledge creation process in organizational performance. Therefore, research
hypotheses are as follows:
H1.There is a positive and significant relationship between ethics and organizational
performance.
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H2. There is a positive and significant relationship between ethics and knowledge
creation process.
H3. There is a positive and significant relationship between knowledge creation
process and organizational performance.
Fig. 1 Research Conceptual Model
Research Methodology
In order to study the relationships between research variables, the needed data were
collected by means of a questionnaire. This questionnaire consists of 40 questions.
Knowledge creation section includes 8 questions, ethics section has 20 questions, and 12
questions are contained in the organizational performance section. Furthermore, LIKERT
5-choice scale was used in this tool.
Reliability and validity analyses
The reliability of different dimensions of research questionnaire showed 0.711 for KCP,
0.919 for ethics, 0.843 for performance and 0.928 for overall questionnaire.
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Measurement tools development in this paper is based on literature review and experts’
opinions. Therefore, the questionnaire in this paper has a certain degree of content
validity.
Empirical analysis
For this research, 110 questionnaires were collected. Among the collected questionnaires,
8 questionnaires were incomplete, so they were discarded. Therefore, 102 valid and
complete questionnaires were ready to analyze. Table 4 shows the basic data of the
respondents of the effective questionnaires.
Table 4 Demographic profile of respondents
Structural equation modeling
Fig. 2 shows the parameter estimates of the research structural model. Afterwards, an
examination of the model estimates and assessment of the overall fit indicators and
modification index can be made to evaluate model fit.
Area Description Number of respondents
Percent Cumulative (percentage)
Job Title Expert Supervisor Manager
48 19 35
47 19 34
47 66
100
Education Under BS Bachelors (BS) Masters (MS)
12 64 26
12 63 25
12 75
100
Job experience
Below 5 years 5- 10 years 10 – 15 years Above 15 years
19 34 21 28
19 33 21 27
19 52 73
100
Age
Below 30 30 - 35 35 – 40 Above 40
19 38 26 19
19 37 25 19
19 56 81
100
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This paper uses a SEM for validation and analysis of the examination of reasonability of
the research structure and the results of the research issues. The standardized coefficient
of ethics and knowledge creation is 0.56, and t-value is 3.55, p < 0.001, reaching
statistical significance. The results indicate that ethics has positive and direct influence on
knowledge creation process (H1). In order to show visible variables, ethics dimensions
are shown by F1 – F4 also KCP dimensions by SO, EX, CO, IN and Performance
dimensions by O, A and HR (see figure 2). The standardized coefficient between ethics
and organizational performance is 0.78, t-value is 4.02, and p is less than 0.001, also
reaching statistical significance. These numbers suggest ethics has positive and direct
influence on performance of organization (H2). The standardized coefficient between
knowledge creation and organizational performance is 0.11, t-value is 0.96, indicating no
statistical significance regarding to these latent variables (H3).
Fig. 2 Research structural model
Results show that the process of knowledge creation has no significant influence on the
performance of organization. Notably, the direct impact of ethics on performance is
significantly greater than that of ethics on knowledge creation. Accordingly, the no
significant effect of knowledge creation on performance can be explained through the
mediated role of the KCP on organizational performance. Furthermore, Table 5
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represents a correlation matrix across all variables with all values being statistically
significant.
Table 5 Correlation matrix
Variables Socialization
Externalization
Combination
Internalization
Output Adaptability
Human resource
s
Ethics 0.400** 0.277** 0.389** 0.214* 0.394** 0.521** 0.718**
KCP 0.668** 0.724** 0.728** 0.707** 0.293** 0.214* 0.404**
Performance
0.213* 0.245* 0.304** 0.206* 0.840** 0.855** 0.788**
**Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed)
In addition, the higher the model fit, the higher usability the model has, as far as the
model fit assessment is concerned. This also means that parameter estimates are more
meaningful. This paper refers to absolute fit indicators, incremental fit indicators, and
goodness of fit index recommended by Hair et al. (1998) for the validation of overall fit.
Table 6 shows all the overall fit indicators. Among the absolute fit indicators, χ2/df is
1.91, the Goodness-of-fit index (GFI) value of this model is also 0.94, root mean square
residual (RMR) value is 0.033, and root mean square error of approximation (RMSEA)
value is 0.077, all within an acceptable range, as suggested by past scholars. Huang
(2004) suggested that if the RMSEA value is between 0.05 and 0.08, and χ2/df reach
below 3, they imply a good fit.
As far as incremental fit indicators are concerned, the adjusted goodness of fit index
(AGFI) value of this model is 0.92, normed fit index (NFI) value is 0.97, comparative fit
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index (CFI) value is 0.96, and incremental fit index (IFI) value is 0.98, all the values
reach the standards suggested in literature. Among the goodness of fit index, the
parsimonious normed fit index (PNFI) value of this model is 0.644 and parsimonious
comparative fit index (PCFI) value is 0.708. They are both greater than 0.5, reaching the
standards suggested by previous scholars.
Table 6 The indicators of model fitness
Result Validation value Criteria Fitness indicator
Absolute fit indicators
Compliant 1.91 < 4 χ2/df Compliant 0.94 > 0.90 GFI Compliant 0.033 < 0.05 RMR Compliant 0.077 < 0.05 or 0.05 – 0.08 RMSEA
Incremental fit indicators
Compliant 0.92 > 0.90 AGFI Compliant 0.97 > 0.90 NFI Compliant 0.96 > 0.90 CFI Compliant 0.98 > 0.90 IFI
Goodness of fit index
Compliant 0.646 > 0.5 PNFI Compliant 0.708 > 0.5 PCFI
Discussion
Based on a conceptual model of research and structural equation modeling, it was
concluded that there is a positive and significant relationship between ethics and
organizational performance. This is in consistent somewhat with previous studies which
they are interested in showing the impact of knowledge management processes on
performance (Tsang, 2008; Zack et al., 2009). The relationship between ethics and
knowledge creation process is also positive and significant but there is not a significant
correlation between knowledge creation process and organizational performance.
Additionally, another result of the current research suggests that there exists a positive
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and significant correlation between ethics and dimensions of organizational performance
including productivity, adaptability, and human resources (see Table 5). According to the
analyzed definitions and models as well as features of our sample in this study, it can be
stated in explaining the obtained results that human resource is one of the dimensions in
all models which proposed for organizational performance and furthermore, more
specifically within the organization under study, the human resource is regarded as the
main capital based on its mission and goals.
On the other hand, the ethics have always had the largest and the most essential influence
on human resources. The ethics in the current research are also defined and depicted in
connection with human resource. Perhaps, the positive and strong correlation between
ethics and organizational performance might be explained according to the
aforementioned fact, and it would be possible to analyze why human resource mostly
influenced by ethics among the other dimensions of organizational performance.
Concerning adaptability, taking into account the components of this dimension such as
increase in supply of research- based products, promotion of master’s satisfaction,
increase of research projects assigned to organization, it can be clearly asserted that
human capital especially knowledge workers play a crucial role in the realization of these
components and enhancement of adaptability, and consequently, improvement of
organizational performance. Moreover, regarding to ethics, attributes like mutual trust to
each other and to the organization, consultation with others, accountability and
responsiveness, envisioning and loyalty to the organization will greatly affect the
efficiency of knowledge workers, and as a result, their adaptability. For these reasons,
adaptability seems to be in second priority after human resources in terms of being
influenced by ethics. With regard to output, it can be stated that this dimension of
performance is more related to costs, revenues, and financial issues of organization (Zack
et al., 2009), and also, due to the fact that the respective organization is affiliated to
government, the output is less directly influenced by human assets compared to other
dimensions. Therefore, apparently due to these reasons, output is less influenced by
ethics compared to other dimensions of performance.
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Another result of the current research implies a direct and significant relationship of
ethics and dimensions of knowledge creation including socialization, externalization,
combination, and internalization (see Table 5). These affirmative results were contrasted
with recent study conducted by Rezaiian and Ghazinouri (2010). This result is also
explained according to the requisites of the respective organization. It can be contended
in this regard that due to the organization’s emphasis on team work the accentuation is on
personnel’s learning from each other and sharing experiences in team level as well as
organization level. Thus, socialization is highly significant in the respective organization.
Furthermore, socialization is based on social relations and interactions of people, and
accordingly, the role of ethics is highlighted in it. Seemingly, due to the aforementioned
reasons, socialization is the dimension which is mostly influenced by ethics. Concerning
externalization, this dimension is also specifically important owing to emphasis of
organization on transforming a variety of knowledge into explicit knowledge and also on
its taxonomy, storage, and protection. From another aspect, ethics play a significant role
in encouraging personnel within the organization to manifest their knowledge. Probably,
on the same basis, it is possible to explain the significant and direct correlation between
ethics and externalization. Due to some features of the respective organization, a great
deal of emphasis is made on collecting explicit knowledge of individuals and groups, also
protection of them in order to develop new products. More ever, ethics especially
attributes such as confidentiality, intellectual property right and trustfulness can deeply
impact encouragement of personnel and even organization to move from explicit personal
knowledge to explicit knowledge in both group and organizational levels. Finally, the
aforementioned reasons might explain why the combination is positively influenced by
ethics in the respective organization.
Internalization could also lead to effective learning of employee from existing
documents, and for this reason, is particularly important. Nonetheless, due to a particular
identity of the organization under study in the current research, internalization activity is
less taken into account compared to other activities of knowledge creation process. It
might be asserted that internalization is less influenced by ethics compared to other
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dimensions of the knowledge creation process. According to findings of LISREL, no
significant relationship between knowledge creation process and organizational
performance is another result of the present study and the following reasons can be listed
for its justification:
Perhaps as the most important reason, it can be stated that the infrastructures needed for
complete implementation of knowledge management and its processes have not been yet
provided, and knowledge management has not been performed in all dimensions of the
organization, because this concept is a relatively new issue in this organization.
Furthermore, the employees have not yet acquired a perfect insight of its concept;
consequently, knowledge management has not been so far able to exhibit its tangible
impact on the organizational performance in the respective organization, while recent
study indicated that KM can influence on organizational performance, of course,
mediating role of others factor should be considered (Lee and Huang, 2012).
However, since the impacts of the knowledge creation process and ethics on
organizational performance are simultaneously evaluated in the research model, also
taking into mind the fact that ethics influence the performance very strongly, accordingly,
impact of other factor such as knowledge creation on performance is therefore reduced in
a way that standard coefficient between these two variables becomes 0.11 in the model
(see Fig. 2), and their correlation is not confirmed in LISREL.
Conclusions
The Major objective of the current research is to determine the influence of ethics and the
knowledge creation process on organizational performance. The results showed that
ethics positively and strongly affect the organizational performance based on the
proposed analytical model. Ethics are also positively and significantly correlated to
knowledge creation process but no significant relationship is observed between
knowledge creation and organizational performance. Therefore, it is clear that although
ethics directly have a positive and strong impact on the performance but they are not able
to influence the performance through mediated role of the knowledge creation process. In
fact, considering the findings of the research, it can be stated that ethics as a key factor,
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along with other effective factors, play a key role in promotion of organizational
performance as well as successfulness of knowledge creation processes. Since, ethics as
social capital are among the concepts that could lead to higher productivity of human
assets. In the light of the obtained results, consideration of ethics in organizations is
recommended to be provided. Ethics should be emphasized and considered so that the
personnel play further and more effective part in the improvement and promotion of their
organization’s performance and enhancement of performance indices of their
organization; this could improve the competitiveness ability of an organization in the
business environment.
Also, through emphasizing on ethics consideration in organizations, knowledge
management systems can deal with the tasks more successfully and individuals can
actively participate in knowledge management processes. In addition, according to results
of hypotheses analysis for the respective organization, knowledge management issue is
recommended to be more seriously pursued by both personnel and managers, and the
infrastructures required for complete implementation of knowledge management should
be furnished so that knowledge management can demonstrate its tangible and remarkable
effectiveness in the organizational performance. The reason is the fact that intangible
assets are currently a major part of possessions of any organization (Mehralian et al.,
2013), which of course constitute a remarkable part of organizational performance , and
successful implementation of knowledge management could result in maintenance,
organizing and enhancement of intellectual and intangible capitals.
Research Limitations and further research
Our study has some limitations. One limitation refers to specific organization which can
be developed by researchers to other knowledge- based environments. Next, although we
believe that our sample is representative of that organization, a larger sample could help
to improve the generalizability of this study further. Finally, a couple of
recommendations are proposed for future research works in this field:
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- It is recommended to apply other models and processes of knowledge
management and to analyze their relationship with ethics besides comparison of
their results with the findings of the current research;
- As another recommendation, future researches might incorporate determining
other similar variable instead of knowledge management such as intellectual
capital and analysis of its relationship with ethics and organizational performance.
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