Rethinking the Role of Knowledge Sharing on Organizational Performance in Knowledge-Intensive Business Services

Abstract When implementing the knowledge-based view on organizations, it is crucial to have a comprehensive understanding of the organizational performance. Current research on organizational performance is often fragmented into partial facets leaving the complexity of this domain out of picture. The aim of the paper is to examine the relationship between knowledge sharing and organizational performance, comprising innovativeness, market efficiency, and financial performance. We used partial least squares structural equation modelling on profit-oriented organizations in knowledge-intensive business services (KIBS). The sample consists of 237 observations based on a two-round questionnaire survey, which was distributed to randomly selected companies in the Czech Republic. The results suggest that knowledge sharing between managers and employees enhances organizational performance. Organizations with such kind of knowledge sharing nurture both horizontal and vertical information flow, which in turn fosters innovativeness. Sharing knowledge as a part of work duties are key activities to increase market efficiency and innovativeness. Conversely, the model indicates that despite developing collectivism through sharing best practices and feedback, there is a minimal impact of knowledge sharing on financial performance.