the relationship between transformational leadership and

THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP AND

ORGANIZATIONAL LEARNING IN A JAPAN BASED ELECTRONICS FIRM IN

HONG KONG

KA MAN CHAN

BBA (Hons) City University of Hong Kong

MA Chinese University of Hong Kong

Mbus University of Newcastle

Doctor of Business Administration

NOV, 2016

Statement of Originality

The thesis contains no material which has been accepted for the award of any other

degree or diploma in any university or other tertiary institution and, to the best of my

knowledge and belief, contains no material previously published or written by another

person, except where due reference has been made in the text. I give consent to the final

version of my thesis being made available worldwide when deposited in the University’s

Digital Repository**, subject to the provisions of the Copyright Act 1968.

**Unless an Embargo has been approved for a determined period.

KA MAN CHAN

_____________________

Table of Contents

1. Introduction.........................................................................................................................5

2. Theoretical background and hypotheses....................................................................10

2.1 Organizational Learning ................................................................................................. 10

2.2 The 4I framework of organizational learning ............................................................... 11

2.3 Transformational leadership .......................................................................................... 13

2.4 Transformational leadership and organizational climate ........................................... 18

2.5 Organizational climate, trust and intention to share knowledge ................................ 20

3. Research design and method.........................................................................................22

3.1 Participants and procedures ........................................................................................... 22

3.2 Measures ........................................................................................................................... 24

3.3 Analysis ............................................................................................................................. 26

4. Results................................................................................................................................29

4.1 Descriptive statistics ........................................................................................................ 29

4.2 Analysis of measurement statements ............................................................................. 34

4.3 Reliability analysis ........................................................................................................... 38

4.4 Confirmatory factory analysis ........................................................................................ 41

4.5 Hierarchical multiple regression analysis ..................................................................... 45

5. Discussion..........................................................................................................................50

6. Limitations and future research...................................................................................52

Abstract

This paper examines how the transformational leadership style influences the

occurrence of organizational learning in a Japan based electronics firm in Hong Kong.

The main focus of this study is to investigate the relationship between transformational

leadership of middle managers and their influence on the employees in terms of

knowledge sharing. This research would be beneficial to middle managers in

encouraging them to share ideas in the workplace and generate interest on what other

aspects drive knowledge sharing among workplace other than organizational climate. At

the same time, managers could encourage other managers in supporting the

organizational learning in their organization. Data was collected from a Japanese

electronics firm in Hong Kong, consisting of 100 employees at middle managerial grade

or below. Hypotheses were tested with reliability analysis, confirmatory factory analysis

(CFA) and hierarchical multiple regression analysis. The results highlight positive

associations between transformational leadership, organizational climate, trust and

intention to share knowledge. We seek to contribute to the transformational leadership

and organizational learning field by linking organizational climate, trust and intention to

share together. This study adds to the growing body of research suggesting

transformational leadership plays an important role in creating knowledge sharing

intention among employees in workplace.

5

THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP AND

ORGANIZATIONAL LEARNING IN A JAPAN BASED ELECTRONICS FIRM IN

HONG KONG

1. Introduction

In facing the dynamic environment under the business turbulence, organizations are

seeking ways to survive (Nonaka & Johansson, 1985; Nonaka & Takeuchi, 1995). In

order to enhance the organizations’ competitive advantages, evidence suggests that

there is positive association between organizational learning and innovative

performance of organizations (Brockman & Morgan, 2003; Dodgson, 1993; Fiol &

Lyles, 1985; Garvin, 1993). Organizational learning contributed to the organization by

knowledge creation, which was favorable in generating innovative ideas through

knowledge exchange process. Jiménez-Jiménez and Sanz-Valle (2011) defined

organizational learning as a process when organizations developed knowledge and new

insight through knowledge sharing among employee and potentially influenced the

behavior among them. With the help of leadership style which support knowledge

sharing, an organizational climate has been created (Liu & Phillips, 2011). Employees

are willing to express their ideas under this atmosphere where they trust each other (Liu

& Phillips, 2011).

The importance of organizational learning has been repeatedly shown and justified

(Nonaka, 1991). Crossan, Lane, and White (1999) commented that the concept of

organizational learning has existed for several decades. Learning is defined as “the

process within the organization by which knowledge about action-outcome relationships

6

and the effect of environment on these relationship is developed” (Duncan & Weiss,

1979, p. 84). The process included creating, retaining and transferring knowledge within

an organization and it improved from time to time once it gained experience.

Knowledge has generated from individual basis, group and extended to organization.

There were different studies related to organizational learning, such as leadership

(Fullan, 2005; Lee, Almanza, Jang, Nelson, & Ghiselli, 2013; Sheppard, Brown, &

Dibbon, 2009), information-processing (Huber, 1991), bounded rationality (March &

Olsen, 1975) and strategic renewal (Crossan & Berdrow, 2003; Crossan et al., 1999).

Traditionally, studies have tended to focus on the output and benefits of organizational

learning (Nonaka, 1991; Stata, 1989). However, more recent developments on

organizational learning have started to emphasize its inputs and drivers. For instance,

some scholars examined the relationship between human resources and organizational

learning (Hirano, Uchida, & Suzuki, 2009; Izumi K., Ayse S., & Pam, 2001; Nonaka &

Johansson, 1985; Salis & Williams, 2010). However, it was still under early stage in

studying the role of leaders who driven the organizational learning (Robbins & Judge,

2009). Leadership style is closely related to organizational learning. (Sheppard et al.,

2009) suggested that leadership and organizational learning were facilitating with each

other. A review of studies on leadership style, especially transformational leadership,

and organizational learning argue that they are positively related (Fullan, 2005; Lee et

al., 2013; Lei, Slocum, & Pitts, 1999; Montes, Moreno, & Morales, 2005; Sheppard et

al., 2009; Swiering & Wierdsma, 1992; Tushman & Nadler, 1986). However, those

studies were mostly theoretically focused, it might be difficult for management to

understand and adjust their behaviors and policies to stimulate organizational learning.

This dissertation contributed to managers by illustrating theoretical framework in a

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simple way with practical example that makes them understand easily. It provided

evidence to show the positive linkage between transformational leadership,

organizational climate, trust, and intention to share knowledge.

One of the characteristics of transformational leader is openness to experience (B. J.

Avolio & Yammarino, 2013; Judge & Bono, 2000; Moss, McFarland, Ngu, &

Kijowska, 2007). Transformational leadership is important to organizational learning, as

the first step in the organizational learning process is knowledge creation (Jashapara,

2004; McShane & Travaglione, 2007). One important way through which knowledge is

created, is through the interaction between leaders and subordinates (L. Argote &

Ingram, 2000). Managers have been shown to be able to reach higher level of

motivation and morale from employees through their willingness to share information

with subordinates (Liu & Phillips, 2011; Nonaka & Takeuchi, 1995).

The concept of transformational leadership was introduced by James MacGregor burns

(1978) in his research on political leaders. According to Burns (1978), transformational

leadership is a process in which leaders and followers help each other to advance to a

higher level of morale and motivation. However, studies on the relationship between

transformational leadership and organizational learning was still limited, especially

those with practical examples. This study attempts to fill in the gap supported with the

illustration of practical example for easy understanding and being able to let mangers in

reviewing their organizational learning activities within their organization, focusing

specifically on knowledge sharing (L. Argote & Ingram, 2000; L. Argote, Ingram,

Levine, & Moreland, 2000).

8

The main focus of this study is to investigate the relationship between transformational

leadership of managers and their influence on the employees in terms of knowledge

sharing. Liu and Phillips (2011) concluded that transformational leadership positively

enhanced organizational climate in terms of knowledge sharing. We argue that

employees under this climate would exhibit higher intentions to share knowledge, a key

necessary condition for organizational learning (Liu & Phillips, 2011). Since there is

high level of trust among employees, they are more willing to share knowledge and

open for discussion. Taken together, this study addressed the question:

To what extent does transformational leadership (TL) influence the

occurrence of the knowledge sharing between managers and subordinates

by creating the organizational climate (OC), especially trust (T), within

workplace?

We believe that this study makes important contribution to middle manager research

and practice by providing real example on how transformational leadership influenced

the willingness to share knowledge. Some managers might not realize the linkage

between leadership style and knowledge sharing within workplace, as there were

limited studies in this area. However, studies showed the importance of knowledge

sharing and its beneficial impact on organizations (Du, Ai, & Ren, 2007; Hsu, 2008;

Nonaka, 1991; Renzl, 2008). As the target readers of this study are the managers who

preferred to read studies in practical approach with simple illustration for easy

understanding, we try to explain this research in a simple way.

At the same time, this study is able to spark the interest on what other aspects antecede

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knowledge sharing within workplace. Management can gain advantages for their

organizations by adopting leadership styles that stimulates knowledge and information

sharing within workplace, especially for generating innovative initiatives to cope with

dynamic business environments. Figure 1 showed the research model of this paper

which consists of four constructs, Transformational Leadership (TL), Organizational

climate (OC), Trust (T) and Intention to share (I).

Base on the observation of the researcher who worked for the Japanese company based

company for more than ten years, organizational learning activities, especially in

knowledge sharing, vary within workplace. The researcher hopes to gain a better

understanding on leadership style and organizational learning in an applied setting.

In sum, the research question for this study is: what is the relationship between

transformational leadership and organizational learning.

Figure 1: Research model of this paper

The paper is structured as follows. Section 2 presents the theoretical background and

hypotheses. Followed by the methodology on how we conducted the survey with 90

employees in a Japanese electronics firm in Hong Kong. In Section 4, we illustrate the

result of the survey. Discussion of implication, limitation and suggestion on further

research are covered at the last section.

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2. Theoretical background and hypotheses

2.1 Organizational Learning

Stata (1989) commented that “learning as a process by which individual gain new

knowledge and insights and thereby modify their behavior and action, similarly,

organizational learning entails new insight and modified behavior” (Stata, 1989, p. 64).

Huber (1991) defined “organizational learning occurs when any of an organization’s

units acquires knowledge that the unit recognizes as potentially useful to the

organization” (Huber, 1991, p. 90). It is a process by which starts from individual,

extended to organization and finally, developed into a system (Crossan et al., 1999). It

occurs by sharing insight and knowledge. “Through sharing insights, knowledge and

mental models, organizational learning occurs” (Stata, 1989, p. 64).

A organizational learning framework suggested by Huber (1991) consisted of the

process in knowledge acquisition, information distribution, information interpretation

and organizational memory (Cyert & March, 1992; Jashapara, 2004; McShane &

Travaglione, 2007). Knowledge acquisition is the process that how knowledge is

obtained. Information distribution is the process on how we share knowledge that lead

to new idea and information. Information interpretation is the process by which

information is given different interpretation. And organizational memory is how the

knowledge stored for future use. The framework developed by Huber is comprehensive,

yet, it did not link with different levels within an organization. There are different levels

in an organization, simply, frontline staff, middle managers and top managers.

Organizational learning happens in all levels which started from individual, group and

organization basis. After reading the framework by Huber, managers are able to develop

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a basic understanding of organizational learning and its benefit. However, they might

find difficulties in understanding the relationship between organization learning process

and the organization learning level. Thus, they might face difficulties in carrying out

organizational activities in organization. This is relatively an unfortunate situation. To

extend the framework developed by Huber, especially in matching this concept with

organizational learning levels, the 4I framework provided a better explanation on the

linkage.

2.2 The 4I framework of organizational learning

When it comes to matching the organizational learning processes and organizational

learning level, the 4I framework of organizational learning developed by Crossan, Lane

and White in 1999 gave a better illustration (Figure 2). There are 4 process areas,

intuiting, interpreting, integrating and institutionalizing, which helps to explain the

learning occurred at three levels, individual, group and organization under this 4I

framework (Crossan et al., 1999). They defined the learning process where “Intuiting is

the preconscious recognition of the pattern and/or possibilities inherent in a personal

stream of experience” (Weick, 1995, p. 25) . Interpreting is the explanation of an insight,

or idea to one’s self and to others. “Integrating is the process of developing shared

understanding among individuals and the taking of coordinated action through mutual

adjustment” (Crossan & Berdrow, 2003, p. 1090). “Institutionalizing is the process of

ensuring that routinized actions occur. Because the processes naturally flow from one

into another, it is difficult to define precisely where one ends and the next begins but

quite clearly, intuiting occurs at the individual level and institutionalizing at the

organizational level” (Crossan et al., 1999, p. 525).

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The learning result accumulated from one level to another, which means, starting from

individual learning to group learning and formed to be organizational learning. This

learning flow named as feed-forwarding learning flow. However, sometimes the

learning outcome developed from organizational level and back to group level and

finally, individual level. This is named as feedback learning flow. Base on the

organizational learning studied by Argyris and Schön (1978), individuals are defined as

management leaders. Crossan, Lane and White (1999) commended that management

may facilitate the process of organizational learning, thus, they are performing an

important role in organizational process.

Figure 2: The 4I framework by Crossan, Lane and White, 1999, P.522-537 (Crossan et

al., 1999).

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Supportive leadership creates a community culture and human resources within

organization which facilitating the occurrence of organizational learning, the feed-

forward learning flow is realized (Y. Jung & Takeuchi, 2010). As management leaders

are regarded as the influential individuals and groups, their style subsequently feed-

forward to execute organizational learning (Jansen, Vera, & Crossan, 2009; Mazutis &

Slawinski, 2008; Vera & Crossan, 2004).

2.3 Transformational leadership

Leadership has been a research topic for many decades (Bernard M. Bass, Avolio, &

Atwater, 1996; Hartog, Muijen, & Koopman, 1997). A successful leaders are required

to have an in-depth understanding of leadership theory and organizational learning

(Fullan, 2005). “Leadership styles that enhance knowledge sharing organizational

cultural beliefs will stimulate an environment in which employees have the desire to

share”(Liu & Phillips, 2011, p. 45). Despite different types of leadership styles,

transactional leadership and transformational introduced by Burns (1978) is considered

to be the influential one and researchers tends to extend their study base on Burns’

concept (Bryant, 2003; D. I. Jung & Avolio, 2000; Li, Nahm, Wyland, Ke, & Yan,

2014; Patiar & Mia, 2009; Podsakoff, MacKenzie, Moorman, & Fetter, 1990; Reuvers,

van Engen, Vinkenburg, & Wilson-Evered, 2008; Senior & Swailes, 2010).

Transactional leadership, as defined by Burns (1985), is “the leaders who provided

tangible rewards for work and loyalty of the employees” (Senior & Swailes, 2010, p.

249). “According to Bass (1985), transactional leaders clarify for their followers the

followers’ responsibilities, the expectations the leaders have, the tasks that must be

14

accomplished and the benefits to the self-interests of the followers for compliance”

(Piliai, Schriesheim, & Williams, 1999, p. 898).

Advantages of transactional leadership include reward and incentives, which encourage

productivity if employees exceeded from the expectations. Employees achieve objective

and target through the rewards and punishments by leaders (Burns, 1978). Transactional

leaders tend to manage the organization by linking job performance to rewards. It is

responsive as the employees tend to response to what the leader told them to do in order

to get the reward from leaders (Senior & Swailes, 2010). The structure is clear as

employees know exactly what is expected through the chain of command and they can

better understand what would happened if they are not being obedient to the orders,

employees are continuously being motivated to perform constantly in reaching positive

effect. Under transactional leadership management, employees work within the

organizational culture, where they are not willing to think of any changes but just

follow the request by leaders (Senior & Swailes, 2010). Under this leadership style,

objectives and goals are broken into small pieces and in short term, employees are

motivated as the tasks were easily achieved. Leaders guarantee all the resources that

employees were requiring to achieve the short-term goal. They ensure employees have

necessary resources and apply contingency leadership (McShane & Travaglione, 2007).

Yet, there are disadvantages of transactional leadership. This leadership style only

motivates people in base level where punishment and reward were not effective to

employees with higher requirement or expectation on further development. Especially

for those highly educated employees, such as Bachelor degree holder or above and

those young generation. Under the concept of Maslow’s hierarchy of needs, once their

15

basic need is satisfied, they tend to look for job or organization that is able to fulfill

their interpersonal needs, such as sense of belongings, self-esteem and self actualization

(Maslow, 1943). The creativity is limited under this leadership style as employees are

requested to follow what their leaders assign to them. D. I. Jung (2001) examined how

different leadership styles, transactional leadership and transformational leadership,

affect the creativity. He concluded that “transformational leadership is more

instrumental in fostering creativity than transactional leadership by establishing group

norms that allow members to focus on intrinsic motivation and satisfaction” (D. I. Jung,

2001, p. 192).

Transformational leadership, on the other hand, relies on “giving followers a purpose, a

vision of something to aim for and on creating follower identification with the leader”

(Senior & Swailes, 2010, p. 249). The leadership style is proactive with lots of

communication between leaders and followers. Burns (1978) defined transformational

leaders as the one who is able to lift followers up form their petty preoccupations and

rally around a common purpose to achieve things never thought possible. As followers

work under an organizational culture with lots of communication with leaders and

subordinates, new ideas are generated and they have the common goal. By developing

and communicating an attractive vision, transformational leadership has been

conceptualized to enhance employee’s identification with the company (De Cremer &

Van Knippenberg, 2002). The transformational leaders lead the organization in terms of

changing the organizational to fit the environment (McShane & Travaglione, 2007). The

transformational leaders provides a supportive climate and encourages followers to

come up with new ideas in solving problems, which in turn, empower subordinates and

16

increase their work enthusiasm (Lee et al., 2013). A climate in sharing among team

members is formed under transformational leadership (Liu & Phillips, 2011).

Transformational leadership is able to enhance motivation, morale and performance as

it at lease partly based on shifting follower’s perspective from an individual “I” to “We”

(B. M. Bass, 1998). When transformational leaders engender dynamics that

characterized by inter professional motivation and openness to diversity, effectiveness is

enhanced (R. Mitchell et al., 2014). This leadership style is justified to be favorable in

knowledge creation under the research by R. J. Mitchell and Boyle (2009). Focusing on

the information or decision-making perspective, the role of leadership in facilitating

constructive cognitive effects on knowledge creation (R. J. Mitchell & Boyle, 2009).

Transformational leadership style is positively related to the innovative behavior in

workplace (Pieterse, Van Knippenberg, Schippers, & Stam, 2010). An integrated model

is suggested by Eisenbeiss, Van Knippenberg, and Boerner (2008) in linking

transformational leadership and team innovation. They commented that there is limited

empirical evidence for the role of transformational leadership in causing team. Yet, Van

Knippenberg and Sitkin (2013) critiqued the clear conceptual definition of charismatic-

transformational leadership, the specific causal model and the validity of construct.

Despite the advantage of transformational leadership, there are disadvantages of this

leadership style such as improper use of influence, inspiration fades and generation of

ideas with merit. As transformational managers serves as the role model in the

organization, they would demonstrate how to perform and how the task be

accomplished to their subordinates. Sometimes, they might even take risk to achieve

certain goal which might be harmful to the organization. If leaders always do immoral

17

and unethical behaviors in workplace, the whole organization would suffer. Effelsberg,

Solga, and Gurt (2014) studied the unethical behavior by transformational leaders,

especially in focusing on subordinates’ ethical behavior as an outcome of

transformational leadership. They concluded that “transformational leadership to entail

a certain risk of encouraging followers to contribute to their company’s success in ways

that are generally considered to be unethical” (Effelsberg et al., 2014, p. 81). Inspiration

fades refers to the situation that managers caused employees not to inspire to work as

they gave unreasonable deadlines and long working hours in order to achieve the

company goal. Transformational leaders provided opportunities and arose intellectual

curiosity for employees to be creative in thinking complex ideas (Bruce J. Avolio, Bass,

& Jung, 1999; Moss et al., 2007; Shin & Zhou, 2003; Vera & Crossan, 2004). However,

if the acknowledging procedure is not well established, the generated ideas would be

limited and no merit.

Reviewing the characteristics of these two leadership styles, transformational leadership

style facilitates the communication within organizations as the leaders creates an open

discussion organizational climate for followers. It is suggested, “an organizational

climate can promote the innovative capacity of individuals to acquire and exploit new

knowledge in order to innovate their practice or to resolve common problems”

(Hammami, Amara, & Landry, 2013, p. 115). Lee et al. (2013) justified that attitudes

and intentions for employees in following practices is impacted under transformational

leadership style and organizational climate.

There is positive relationship between work unit effectiveness and transformational

leadership (Reuvers et al., 2008). As there is consensus between managers and workers,

18

their ideas generated through daily communication is timely and innovative which is

able to cope with the ever changing business environment. The requirement of users,

markets and the development of product are quickly fulfilled and responded by

knowledge creating companies (Nonaka, 1991). Knowledge transfer activities happens

under an organizational climate which workers are welcome with open discussion (J.

Alberto Arago´n-Correa et al., 2007). Referring to the research done by Hammami et al.

(2013), they showed that the organizational climate as multidimensional concept has a

positive impact on knowledge transfer activities.

This paper attempted to investigate the organizational learning behavior, especially in

the intention of knowledge sharing aspect, under transformational leadership style. In

particular, what drives the intention of knowledge sharing with the help of trust,

organizational climate and transformational leadership. Several hypotheses will be set in

discussing the relationship between transformational leadership, organizational climate,

trust and intent to share knowledge.

2.4 Transformational leadership and organizational climate

Organizational climate refers to “the perceptions that organization members share of

fundamental element of their organization” (West, Smith, Feng, & Lawthom, 1998, p.

262). It is “a set of attributes of the work environment, perceived directly or indirectly

by the employees, that is assumed to be a major force in influencing employee

behavior” (Ivancevich, Konopaske, & Matteson, 2008, p. 33). Employees’ behavior is

affected by the background and culture of the managers who creates organizational

climate. The recurring patterns of attitudes, behaviors in the organization is regarded as

19

organizational climate, where organization cultures tends to be deep and stable (Isaksen

& Ekvall, 2007). Here, we focus on the organizational climate instead of its associated

concept of organization culture. Burke and Litwin (1992) defined clearly on how

organizational climate is different from organizational culture. “It is in terms of

perceptions that individuals have on how their local work unit is managed and how

effectively they and their colleagues work together on the job. The level of analysis,

therefore, is the group, the work unit. Climate was much more in the foreground of

organizational members’ perceptions, whereas culture was more in the background and

defined by beliefs and values. The level of analysis is the organization. Climate is, of

course, affected by culture, and people’s perceptions define both, but at different levels”

(Burke & Litwin, 1992, pp. 526-527). Leaders create and develop the climate of the

organization and leadership has been treated as the antecedent of organizational climate

over the past 50 years (Lee et al., 2013; Zohar & Tenne-Gazit, 2008).

Managers create a climate that is receptive to new ideas in order to encourage

employees in sharing their ideas by (Bryant, 2003). Developing and creating an

appropriate climate is needed to be focus by managers so as to promote company's

policies and practices (Lee et al., 2013). Leaders create an environment that workers are

willing to share ideas as they have common understanding on company’s policy and

goal (Kangis, Gordon, & Williams, 2000). The shared employee perception of the

organizational context is reflected the climate of organization (Schneider, White, & Paul,

1998). The climate is formed, which is favorable to generate new ideas through frequent

communication (Adair, 1990; J. Alberto Aragoń-Correa, Garcıá-Morales, & Cordoń-

Pozo, 2007; Quinn, 1998).

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Thus, we hypothesized:

Hypothesis 1. There is positive relationship between transformational leadership (TL)

and organization climate (OC).

2.5 Organizational climate, trust and intention to share knowledge

Under transformational leadership, information sharing activities are relatively more

easily found in organizations (Lee et al., 2013; Liu & Phillips, 2011). McAllister (1995)

commented that developing and maintaining trust relationships is especially important

for managers and professional in organizations. “The trust and cooperation is essential

for effective knowledge-sharing to occur” (Liu & Phillips, 2011, p. 45). Therefore, a

high level of trust is a key element to accelerate information sharing. “A high level of

trust among followers is what enables a transformational leader and his or her followers

to persist in their efforts and to overcome significant obstacles” (D. I. Jung & Avolio,

2000, p. 951). If there is lack of trust between employees, they are reluctant to discuss

freely in workplace (Liu & Phillips, 2011). As trust enables people to take risk on

whether the others will take advantage on me or not (Lyman W. Porter, Edward E.

Lawler, & Hackman, 1975). Due to the close relationship between transformational

leaders and their followers, the mutual trust, share visions is established and they had

clear perceptions regarding the organization’s policies, procedures, and practice (Zohar

& Tenne-Gazit, 2008). Podsakoff et.al (1990) commented that one of the important

variable that can mediate the effectiveness of transformational leadership is the trust by

followers toward their managers. It is believe that the “fundamental nature of

transformational leadership should effectively foster the sense of trust” (Liu & Phillips,

2011, p. 45).

21

Denison (1990) mentioned that the organizational climate is different between

organizations with high corporate performance than those with low performance.

Shared beliefs must be possessed by team members to show that the team environment

is trustworthy (Liu & Phillips, 2011). The bonding of employees has to be tight and

they have to trust each other, otherwise, a leakage of know-how would create business

failure. Especially under electronics field, new ideas involved some know-how

technology as those confidential ideas may be developed into a new product or

technology that are going to launch in the market. With the beneficial effect on team

coordination, team performance is improved through knowledge sharing (Srivastava,

Bartol, & Locke, 2006). Effective coordinated action is sustained as there is mutual

confidence or trust (Thompson, 1967). Thus, we suggested.

Hypothesis 2. There is positive association between organizational climate (OC) and

trust (T).

Trust is relatively important in electronic company as it involves the business secret,

know-how technology. Li et al. (2014) reviewed the lean manufacturing by using

Chinese firm as an example, they commended that “workers’ trust in management is a

key component of successful lean manufacturing implementation” (Li et al., 2014, p. 4).

Electronic companies with manufacturing section and research and development (R&D)

department, innovative ideas are mostly generated in Research and Development

department. It then develops from ideas to the new product of the company and passes

to manufacturing section for mass production. This know-how is the most important

intangible assess of the company and if there is no trust between employees, they are

22

not willing to share new ideas, which affect the company growth. In order to justify the

relationship with real life example, our hypothesis is as follow:

Hypothesis 3. There is positive relationship between trust (T) and Intention to share (I)

The hypotheses are summarized in the model below, as also previously presented in

Figure 1.


3. Research design and method

3.1 Participants and procedures

A well-known Japanese electronics firm in Hong Kong was selected as research site. It

is a sale office of one of the leading electronics company in worldwide with head

quarter in Japan. The mother company has been established for more than 75 years, all

the top management in Hong Kong branch is Japanese who are transferred from head

quarter. This company was selected as the researcher is the current employee of this

company for over five years. She knew pretty well about the company culture of this

company and able to get the contact easily which increased the response rate.

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There are totally 120 employees, in which 100 were middle managerial grade or below.

Figure 3 showed the organization hierarchy of the firm.

Figure 3: Organization hierarchy of the research site

Managing Director (MD) and senior managers are clarified as top management where

those ranking below, including managers, assistant managers, officers, executives and

clerks are classified as middle managerial grade below. They are invited for

participation. An information letter with project details was sent via email to the

employees. The questionnaire was conducted in English and under on-line bases that

there was no limitation on when to complete the survey and the participants had rights

to quit at any time. As it was critical to maximize the response rate, researchers

designed the questionnaire with simple layout to minimize time-consuming. A follow

up reminder was sent out via email after first invitation to increase the response rate.

24

The online questionnaire was available to be accessed from Aug – Sep, 2015. A total

number of 90 responses out of 100 were received. Participants were not limited to

gender, age, department but their ranking should be middle manager or below, so as to

get a general understanding of the leadership style as well as the knowledge sharing

activities within workplace. Participants implied consent to participate the research once

they responded to the online questionnaire and submitted after complete. Only

completed questionnaire was considered for analysis.

This research was undertaking in quantitative approach, data was analysis by SPSS after

collecting all questionnaires from the employees. Raw data was interpreted into

meaningful descriptive statistics using SPSS. Base on the result generated by SPSS,

further analysis and interpretation can be made. Descriptive analysis, reliability test,

confirmatory factor analysis and hierarchical multiple regression analysis were

completed for testing the data and hypothesis.

3.2 Measures

Questionnaire statements were developed base on the previous studies. There were four

main constructs, namely, transformational leadership (TL), Organizational climate

(OC), Trust (T) and Intention to share (IT). A seven-point Likert scale was being used

in all constructs for easy analysis. Responses were made on the scale ranging from 1

(Strongly disagree) to 7 (Strongly agree).

Transformational leadership (TL)

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The Multifactor Leadership Questionnaire (MLQ, Form 5X: B. J. Avolio and Bass

(1995)) was being used as it measured a board range of leadership style from passive

leaderships to transformational leadership. It identified the characteristics of

transformational leader through the questionnaire. Respondents were being asked to rate

their managers base on the 20 questions under MLQ. There were several dimensions

under this MLQ, namely, idealized influence, inspirational motivation, intellectual

stimulation and individualized consideration, where these were considered to be related

to transformational leadership behaviors. For example, under the dimension of

individualized consideration, sample questions related to coaching and staff

development. Transformational managers were expected to be training their staff and

helping them to growth in their career.

Organizational climate (OC)

To examine the employees’ evaluation on the organizational climate, seven items from

Patterson et al. (2005) was used as it covered seven specific area, involvement, training,

innovation and flexibility, reflexivity, clarity of organizational goals, efficiency and

effort. Sample questions such as “Everyone understands the goals of our company”

reflects their opinions toward the clarity of organization goal. Question of “Our

company is very efficient and does not waste time or money” reflects their opinions on

the efficiency within the organization.

Trust (T)

Six items from Podsakoff et al. (1990) were used to measure the trust of the employees

towards their managers as it conceptualized trust with the faith in and loyalty to the

managers. Sample questions included “I feel quite confident that my managers will

26

always treat me fairly” to reflect the employees’ faith in the intentions of their

managers. To reflect the sense of loyalty to managers, sample questions such as “I feel

strong loyalty to my manager” was used.

Intention to share (I)

The five items from Bock, Zmud, Kim, and Lee (2005) were used to measure

employees’ intention to knowledge sharing. Sample questions included “I will share my

work reports and official documents with team members of my organization more

frequently in the future” to reflect their willingness in sharing information.

Control Variables.

Demographic questions, such as age, education level, nationality, year of service in the

organization, position and the year of service in electronics industry were also covered

in order to getting general ideas of the background of the respondents.

3.3 Analysis

To test the conceptual model and hypotheses, the collected data were analyzed by

descriptive analysis, reliability test, confirmatory factory analysis (CFA) and

hierarchical multiple regression analysis through SPSS.

Descriptive analysis demonstrated the profile of the respondents so as to gain a better

understanding of the background of the respondents. Reliability test were completed to

test the consistency and the stability of the items under each construct base on the result

of the Cronbach’s alpha with the benchmark of 0.7. Cronbach’s alpha indicated the

27

reliability coefficient of how well the items in a set were positively related to one

another. The larger value of Cronbach’s alpha represented the greater degree of

reliability.

As there were many variables in certain construct, confirmatory factory analysis is

carried out. It is a test for summarizing the structure of a set of variables. After running

this test, whether or not the matrix was suitable for factoring was justified with the

correlation excess benchmark of 0.3. Base on the result of Kaiser-Meyer-Olkin Measure

(KMO) and Bartlett’s test with figure greater than benchmark of 0.6, the Bartlett’s test

of sphericity was significant. Approximate Chi-Square result with great value and the

significance was smaller than benchmark of 0.5 (P<0.5), null hypothesis (H0) was

rejected which means all variables were correlated. Anti-image correlation was

generated in order to test if all the measures of sampling adequacy were good or not if

the figure was above the acceptable level of 0.5. For the percentage of the variances in a

variable jointly explained by factors, data under communalities was shown. The test

also indicated that which factor with highest percentage of variance among all variables

and its eigenvalues. Factor loading was created to represent the correlation coefficient

between a factor and a variable.

After testing the correlation of among variables, regression analysis was adopted to test

our hypotheses. When independent variables were correlated with one another and with

the dependent variable, this analytical method was used (Coakes & Ong, 2010).

Multiple regression was the extension of bivariate correlation where the correlation test

was done to test the correlation between two variables. It was a technique that allows

additional factors to enter the analysis separately so that the effect of each can be

28

estimated. Quantifying the impact of various simultaneous influences upon a single

dependent variable was valuable (Sykes, 1993). The result of the regression represented

the best prediction of a dependent variable from several independent variables (Coakes

& Ong, 2010). Among three major multiple regression mode, standard, hierarchical and

stepwise regression, hierarchical multiple regression was applied in our case as we base

on theoretical knowledge to set the order of entry. We determined the order of entry of

the independent variable based on the theoretical knowledge under hierarchical multiple

regression (Coakes & Ong, 2010).

In order to test the hypotheses, we added the control variables and the predictor into the

model to see if there was any statistical significant change. 3 models were tested with

predictor and the control variables. All 3 models consisted with 2 blocks of the result

where the first block was control variables and the second blocks included the

independent variable. We then analyzed the result base on the 3 output from SPSS,

correlations, model summary and coefficient table. First we analyzed the correlations

between 2 continuous variables by referring the correlation table. The coefficient has a

range of possible value from -1 to +1, and the value indicate the strength of the

relationship with the sign (+ or -) indicate the direction (Coakes & Ong, 2010). We

particularly looked at the SIG figure (P value) to judge whether or not it is statistically

significant. If the SIG figure is less than 0.05 (P<0.05), it is statistically significant and

there is linear relationship among variables. The accepted significant level was set to be

0.05 as it meant that there was 95% of chance that the relationship among variables was

not due to chance. Second, we looked at the R-square figure listed on the model

summary as this statistic told us how much of the variation in the value of the dependent

variable can be explained in our regression model. We can see if there was any

29

statistically significant change on the model by comparing the outcome with and

without independent variables. Finally, we referred to the coefficient table to evaluate

each of the independent variables so to find out how well each of the variables

contributed to the final model. Beta figure under the table represented the unique

contribution of each variable.

4. Results

4.1 Descriptive statistics

To collect data, 100 employees were invited to participate the survey. An invitation

email with online survey link was sent to them. Upon the deadline of the survey, 90

responses were received with a response rate of 90%. Of the 90 responses, female

occupied 60% of the total responses, rest of the 40% were male. Approximately half of

the respondents (46.7%) were aged between 35-44, 37.8% were aged between 25-34,

14.4% were aged between 45-54 and 1.1% were aged 55 or above. More than half of the

respondents were Bachelor degree holder or above, in which 51.1% were Bachelor

degree holder, 18.9% were master or postgraduate degree holder, 2.2% were Doctorate

degree holder. The majority of the respondents were Hong Kong people with 88.9% and

rest of the respondents (11.1%) came from Japan, Taiwan, China and Malaysia.

Additionally, in terms of the year of service in this company, 45.6% of the total

respondents have been working for 1-5 years, 30.1% has been working for 6-10 years,

12.2% has been working for 11-15 years and the rest of 12.1% has been working for 16

years or above. For the position of the respondents, 56.7% were front line staff, in

which, 18.9% were clerks (rank 1), 20% were executives (rank 2) and 17.8% were

30

officers (rank 3). Rest of the 43.7% was managerial grade, in which 16.7% were

Assistant Managers (rank 4) and 26.7% were managers (rank 5). Upon the year of

service in electronics industries, close to half (43.7%) of the respondents has been

working for 6-10 years where 18.8% and 19.9% has been working for 1-5 years and 11-

15 years respectively. Rest of the 17.6% has been working for 16 years or above (Table

1).

Table 1

31

Skewness and kurtosis values of variables were summarized in Table 2. Both skewness

and kurtosis values of all variables were less than standard error of 0.55 and 1.10. This

represented that there were no significant degree of skewness and kurtosis in the data.

Table 2

Statistic Std. errorTransformational Leadership (TL) Skewness -0.698 0.254

Kurtosis 0.368 0.503Organizational Climate (OC) Skewness -0.095 0.254

Kurtosis -0.687 0.503Trust (T) Skewness -0.579 0.254

Kurtosis -0.009 0.503Intention to share knowledge (I) Skewness -0.654 0.254

Kurtosis 0.216 0.503

Descriptives

In referring to the normality Q-Q Plot of four variables under Table 3 to 6, we saw that

the observed value were closely on the diagonal line which represent a normal

distribution. We concluded that the variables showed normality and equality of variable

and satisfied the condition for performing the analysis of variance calculation.

Table 3

32

Table 4

33

Table 5

Table 6

34

4.2 Analysis of measurement statements

Descriptive data of each measurement items in terms of mean and standard deviation

were consolidated in Table 7. All statements were measured on a seven-point Likert

scale with 1 represented strongly disagree; 4 represented neutral and 7 represented

strongly agree. For transformational leadership (TL), the mean value of the

measurement statement ranged from 4.36 to 5.13 with the standard deviation ranged

from 1.267 to 1.664. The majority of the employees were positive to their managers’

management style and being proud to work under transformational leadership. With the

highest mean of 2 items (TL4 and TL12), it indicated that their managers were full of

confidence in achieving goals, which was a big motivation towards employees.

However, the lowest mean were TL17 and TL20, which were related to coaching and

35

staff development. Managers were expected to be developing and teaching their

subordinates under transformational leadership style.

The mean value of 7 items under organizational climate (OC) ranged from 3.76 to 4.43

where the standard deviation ranged from 1.597 to 1.691 under a seven-point Likert

scale. Employees are slightly feeling disagree to neutral under the measuring items of

organizational climate. With the lowest mean of OC6 and OC7, which were related to

the efficiency and the job satisfaction, they tended to comment that the organization was

not very efficient and wasted time or money on certain area, at the same time, they were

not excited about their work and lack of intention to do their best. On the other hand,

they found that they were involved in the decision-making and having common goal

towards the organization. This was closely related to transformational leadership style,

as one of the characteristics of the transformational leadership was letting followers to

involve in decision-making and understand the company goal through the frequent

discussion with managers.

Under the measurement items of Trust (T), the mean value ranged from 4.51 to 5.07

where the standard deviation ranged from 1.481 to 1.625. The majority of the

employees tended to be positive on trust within the organization and towards their

managers. This was also aligning with the characteristics of transformational leadership,

as there was high level of trust between managers and subordinates. The highest mean

were T5 and T6 which was related to the loyalty and being supportive towards

managers.

36

Employees attitude towards Intention to share knowledge was positive as mean value of

all measurement items were over 5, ranged from 5.31 to 5.43 and the standard deviation

ranged from 1.211 to 1.29 on the seven-point Likert scale). Items I2 andI3 with the

highest mean value, the majority were willing to share their manuals, experience to

other members of their organization. Even if the mean of I1, I4 and I5 were the lowest,

it also over 5 under the seven-point Likert scale. This result matched with the result of

trust as employees were willing to share information as they built trust in between, this

close bonding around employees were favorable to organizational learning as they were

able to learn with each other.

37

Table 7

38

4.3 Reliability analysis

Reliability analysis was completed in checking the reliability of the measurement of the

constructs. Cronbach’s alpha measured the consistency of multiple items by

representing the average correlation between the items. It was based on the average

correlation of items within a test if the items were standardized. As it can be interpreted

as a correlation coefficient, it ranged from 0 to 1 (Coakes & Ong, 2010). The larger

value of cronbach’s alpha, the great degree of reliability and benchmark was 0.7.

Table 8 showed the reliabilities of all constructs (Transformational leadership,

Organizational climate, Trust and Intention to share). All constructs showed that the

cronbach’s alpha was over 0.7 with Transformational leadership (0.968), Organizational

climate (0.942), Trust (0.952) and Intention to share (0.955). All the data showed the

cronbach’s alpha is close to 1, which represented the reliabilities of the items within the

construct, were relatively high.

39

Corrected item-total correlation was used to check if certain item was correlated with

other items. Referring to the data shown on Table 8, all the data were above 0.5 with the

range 0.578 to 0.907. The result was regarded as satisfactory as all the items were

correlated with others under each construct.

Referring to the column of cronbach’s alpha if item deleted, all the items were above

0.9, which indicated that none of the items is necessary to be deleted in order to increase

the reliability of certain constructs.

To sum up, all items under each construct were considered to be in high reliability in

terms of the Cronbach’s alpha, corrected item-total correlation and Cronbach’s alpha if

item deleted. The question set was valid for our further analysis with hypotheses testing.

40

Table 8

41

4.4 Confirmatory factory analysis

Factor analysis was used as an exploratory analysis tool and was a technique based on

how well various items were related to one another from clusters or factors. It was used

when researchers wished to summarize the structure of a set of variables (Coakes &

Ong, 2010). When the researcher’s goal is to construct a reliable test, factor analysis is

an additional means of determining whether items are tapping into the same construct

(Coakes & Ong, 2010, p. 127). Each factor represented several different variables and it

was more efficient than individual variables at representing outcomes. Confirmatory

factory analysis (CFA) was appropriate in testing a theory about the structure of a

particular domain (Coakes & Ong, 2010). CFA was done in this study to summaries a

set of variables under construct of transformational leadership with 20 variables

involved. Organization climate with 7 variables involved, trust and intention to share

with 5 variables involved respectively.

Result of the CFA is summarized in Table 9. First, correlation of the variables within

constructs was tested with the result from correlation matrix. It showed that all variables

under each construct exceed the benchmark of 0.3. The matrix was suitable for

factoring. Under correlation matrix of transformational leadership, the data ranged from

0.361 to 0.690 where those under organizational climate, the data ranged from 0.572 to

0.710. For trust and intention to share, it ranged from 0.731 to 0.840 and 0.739 to 0.835

respectively. Secondly, by looking at the result from Kaiser-Meyder-Olkin (KMO) and

Bartlett’s test, whether or not the null Hypothesis (H0), variables were not correlated,

was rejected or not. KMO of transformational leadership was 0.935, which was great

than benchmark of 0.6, Bartlett’s test of sphericity was significant. As the approximate

42

Chi-square result was 1835.95, which was large value and the significance was 0.000,

H0 was rejected. All variables under construct of transformation leadership were

correlated. For the result of organizational climate, KMO was 0.898, which was greater

than 0.6, Bartlett’s test of sphericity was significant. Result of approximate chi-square

test was large value up to 535.605 and the significant was0.000, H0 was rejected. All

variables under construct of organizational climate were significant. KMO of trust was

0.897, which was also larger than 0.6, Bartlett’s test of sphericity is found to be

significant. For trust, with the approximate chi-square value up to 563.002 and the

significant value of 0.000, H0 was rejected. All variables under construct of trust were

correlated. Under the testing for intention of sharing, KMO was 0.87 which was larger

than 0.6 with the meaning of significant. Approximate chi-square and significance value

were 496.789 and 0.000 respectively; H0 was reject, which indicated that all variables

under intention of sharing were correlated. Thirdly, inspection of the anti-image

correlation matrix was carried out in reveals that all our measures of sampling adequacy

were well above acceptable level of 0.5. Result of transformational leadership was

ranged from 0.892 to 0.962, organizational climate was ranged from 0.864 to 0.931,

trust was ranged from 0.845 to 0.924 and intention to share ranged from 0.860 to 0.882.

All data were above benchmark of 0.5; we concluded that all the measures of sample

were adequate. Communalities referred to the percent of variance in a variable jointly

explained by the factors. It was measured using h-square statistic, which fell between 0

and 1. For transformational leadership, the highest communalities were TL16 (0.859)

and the lowest communalities were TL2 (0.62), where for organizational climate, the

highest were OC7 (0.828) and the lowest were OC1 (0.603). The highest communalities

of trust were T4 (0.832) and the lowest were T2 (0.697). For intention to share, the

highest communalities were I3 (0.86) and the lowest were I1 (0.748).

43

In order to know how the factor was grouped and its associated eigenvalues, data under

total variance explained was revealed. In the column of initial stage, it explained the

percentage of variance and the cumulative percentages. Referring the eigenvalues with

value greater than 1, it was able to judge which factors were extracted and its

represented percentage of variance. For transformational leadership, factor 1 explained

63% of variance of 20 items, where factor 2 explained 8%. The cumulative percentage

was up to 69% if both factor 1 and 2 applied. Organizational climate, trust and intention

to share with only 1 factor as factor 2 were less than 1. Factor 1 of organizational

climate, trust and intention to share explained 74% of the variance of 7 items, 80% of 6

items and 84% of the variance of 5 items respectively.

Finally, the factory matrix showed a matrix of loadings or correlations between the

variables and the factor. The correlation between factor 1 and TL6 was high as the

figure up to 0.867, which was the highest among 20 variables of Transformational

leadership. The correlation between factor 1 and OC7 was the highest among 7 items

with the result up to 0.915. For the correlation under trust, factor 1 and T4 was the

highest among 6 items with the result up to 0.936. The result of the matrix of Factor 1

and I3 under intention to share was highest as the result up to 0.948.

44

Table 9

45

4.5 Hierarchical multiple regression analysis

Prior to running the multiple regression analyses, we check the descriptive statistics and

the correlation table. No anomalies were identified. Table 10 and 11 shows the

descriptive and correlations of the variables.

Table 10

46

Table 11

Base on the above figure on the correlations table, the correlations between TL and OC

is 0.679, which falls between possible value from -1 to +1, the strength of the

relationship is strong as the figure (0.679) is positive value and it is shift to right hand

side with positive figure. The Sig value is 0.000, P value <0.05, which means the

47

correlation is statistically significant. The correlations between OC and T is 0.774,

which falls between possible value from -1 to +1, the strength of the relationship is

strong as the figure (0.774) is positive value and it is shift to right hand side with

positive figure. It is the highest among 3 hypothesizes. The Sig value is 0.000, P value

<0.05, which means the correlation is statistically significant. The correlations between

T and I is 0.637, which falls between possible value from -1 to +1, the strength of the

relationship is strong as the figure (0.637) is positive value and it is shift to right hand

side with positive figure. However, it is the lowest among 3 hypothesizes. The Sig value

is 0.000, P value <0.05, which means the correlation is statistically significant.

We summarized the result of 3 models by hierarchical multiple regression in table 12-

14. All hypothesizes are supported.

Table 12

48

Under H1, we examined the relationship of TL and OC with 2 models. Model 1

included control variables, where model 2 included the control variables and TL. Under

the coefficient table, unstandardized coefficient beta is 0.847, which is positive and

significant. The SIG value is 0.000, P value<0.05. The probability of the relationship

between TL and OC due to chance is less than 0.000. Thus, H1 is supported. R square

changed from 0.054 to 0.433, which represented that by introducing TL, the model is

significantly improved.

Table 13

Table 8 showed the relationship of OC and T with 2 models. Model 1 included control

variables and TL, where model 2 included the control variables, TL and OC. Under the

coefficient table, unstandardized coefficient beta is 0.397, which is positive and

significant. The SIG value is 0.000, P value<0.05. The probability of the relationship

between TL, OC and T due to chance is less than 0.000. Thus, H2 is supported. R

49

square changed from 0.69 to 0.086, which represented that by introducing OC, the

model is not significantly improved.

Table 14

Result of the testing related to the relationship between T and I with 2 models is

illustrated in table 9. Model 1 included control variables, TL and OC, where model 2

included the control variables, TL, OC and T. Under the coefficient table,

unstandardized coefficient beta is 0.429, which is positive and significant. The SIG

value is 0.000, P value<0.05. The probability of the relationship between TL, OC and T

due to chance is less than 0.000. Thus, H3 is supported. R square changed from 0.397 to

0.060, which represented that by introducing T, the model, however, is not significantly

improved.

50


5. Discussion

The purpose of this research is to study how leadership style, particularly

transformational leadership, influenced the occurrence of organizational learning.

Advantages of organizational learning were justified by a number of research (L.

Argote, E. Miron-Spektor, 2011; Dodgson, 1993; Garvin, 1993; Nonaka, 1991).

However, how to accelerate the phenomenon of organization learning activities in

workplace or what aspects antecede the sharing of knowledge? What is the relationship

between transformational leadership style, organizational climate, trust, and intention to

share knowledge? In order to answer the above questions, we conducted an online

survey with a japan company in Hong Kong with 90 employees who were middle

managerial grade or below. We sat several hypotheses in answering our research

questions. Hypothesis 1 related to the positive relationship between transformational

leadership (TL) and organizational climate (OC). Hypothesis 2 related to the positive

relationship between transformational leadership (TL), organizational climate (OC) and

trust (T). Hypothesis 3 related to the positive relationship between transformational

leadership (TL), organizational climate (OC), trust (T) and intention to share (IT). After

running several analysis, such as reliability test and confirmatory factor analysis and

hierarchical multiple regression analysis, we concluded that they are positive and

51

statistically significant. Thus, all three hypotheses were supported. Table 15

summarized the result of the research.

Our findings in this research matched with the management practice. We found that

there is positive linkage between transformational leadership, organizational climate,

trust and intention to share knowledge. Management in this japan based electronics firm

in Hong Kong is supportive towards organizational leaning activities within workplace.

They are open to discuss and share ideas. As they encourage all employees to exchange

ideas in both formal and informal situation, which is, not only in boardroom but also in

pantry or even outside the company.. Management creates opportunities for employees

to exchange ideas in a relaxing environment. One of the special practices of this

company is that company lunch, leisure gathering and drinking party after work is held,

so that all employees are able to discuss freely. Management also make used of this

opportunity to share experience and knowledge with employees. Both management and

employees are having close relationship with mutual trust. They can even treat each

other as family members rather than colleagues. As employees get used to share

information, new ideas are generated within organization

Table 15

Summary of the research result Hypothesized path Result Implications H1: TL -> OC Support Managers under transformational leadership help to

create an organizational climate which is favourable to knowledge sharing

H2: OC -> T Support Managers under a knowledge sharing atmosphere, mutual trust is built with colleagues.

H3: T -> I Support Managers are willing to share ideas and knowledge with mutual trust

52

6. Limitations and future research

Transformational leadership had a strong, significant influence on organizational

learning. The objective of this paper is addressing the important of transformational

leadership, which leads to organizational climate, trust and intention of sharing

knowledge. Organizational learning is a key factor in developing the foundation for

gaining sustainable competitive advantages and enhancing organizational performance

(Brockman & Morgan, 2003; Dodgson, 1993; Fiol & Lyles, 1985; Garvin, 1993;

Gayawali, Stewart, & Grant, 1997; Nevis, DiBella, & Gould, 1995 Winter; Stata, 1989).

This study focus on how transformational leadership affects to organizational learning

activities, typically in creating organizational climate, trust and intention to share

knowledge, in workplace with an illustration of japan electronics firm in Hong Kong.

This paper provided evidence to middle managers in convincing others on increasing

the occurrence of knowledge sharing activities under transformational leadership. With

the support of transformational leaders, who are concentrated on value and emphasize

the development of vision, knowledge sharing activities might be able to further

promote in workplace, which is favorable to the organization.

Our result demonstrated a positive linkage between transformational leadership,

organizational climate, trust and intention to share. An organizational climate is formed

under transformational leadership and with the trust occurred between employees, the

occurrence of intention to share increased. Therefore, these variables are positively

related and bring significant effects to each other.

53

Our result is cautiously generalized, as there are several limitations that suggest further

possibilities for empirical research. Firstly, the scale of research is relatively small with

one sample firm and 100 target responds. However, the valid response rate is up to

90%, which is considered to be relatively high. It is suggested to extend the sample into

more firms in order to increase the population size in justifying the result. Secondly, this

research focuses on the electronic industry where there might be different insight or

findings. Further research can be extended to other industry, such as hospitality

industry, which is totally different from the manufacturing industry, some interesting

findings in the servicing industry might be found. Thirdly, the target population of this

research was staff who are managerial grade or below, specifically emphasis the

relationship between middle managers and front line staff. Further research can be

extended to top management, such as the relationship between top managers and middle

managers and thus, front line staff. Or even extend to corporate level, such as the

relationship between staff in branch offices and those in head office. Longitudinal

studies, especially in different contexts would be welcome in supporting our research in

more empirical papers.

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