Proceedings of the 8th International Conference on Intellectual ...

Knowledge Leadership in Value Networks: The Joint Effect
<strong>of</strong> Trustworthiness Factors and Levers <strong>of</strong> Control
Maurizio Massaro 1 and Andrea Moro 2
1 University <strong>of</strong> Udine, Udine, Italy
2 University <strong>of</strong> Leicester, Leicester, UK
maurizio.massaro@uniud.it
a.moro@leicester.ac.uk
Abstract: The ability to learn, to generate new ideas, to propose new solutions to problems and in general to be
creative, is related to <strong>the</strong> ability <strong>of</strong> <strong>the</strong> company to create a significant network in order to acquire and generate
new knowledge. A value network is <strong>the</strong> network <strong>of</strong> relationships that creates tangible and intangible value through
<strong>the</strong> complex and dynamic exchanges between two or more organizations. According to Holsapple and Jones’
model <strong>the</strong> Knowledge leadership is suggested to be a key factor linked to <strong>the</strong> ability <strong>of</strong> establishing conditions
which could help <strong>the</strong> knowledge chain to generate value. They suggest that knowledge leadership is
characterized by being a catalyst for traits such as inspiring, mentoring, learning, teaching and knowledge
sharing. The level <strong>of</strong> trust between network’s members and <strong>the</strong> tools <strong>of</strong> control implemented within <strong>the</strong> network
can affect <strong>the</strong> development <strong>of</strong> knowledge leadership. Present research analyzes qualitatively 20 Italian value
networks focused on new product/process development. It elaborates a conceptual framework that shows how
different trust factors suggested by Mayer et al (1995) - namely ability, benevolence and integrity - could be used
jointly with <strong>the</strong> levers <strong>of</strong> control (LOCs) suggested by Simons (1995) - namely, belief, boundary, diagnostic and
interactive LOCs - to create a dynamic tension. Such dynamic tension is valued as a key factor to enable
effective knowledge leadership development. The conceptual framework explains when trust and levers <strong>of</strong> control
can substitute each o<strong>the</strong>r, when <strong>the</strong>y reinforce each o<strong>the</strong>r and when <strong>the</strong>y could be used in a dynamic tension in
order to facilitate <strong>the</strong> knowledge leadership process. In addition, <strong>the</strong> conceptual framework suggests how control
tools in a low trust environment can support <strong>the</strong> development <strong>of</strong> trust.
Keywords: knowledge management process, knowledge leadership, levers <strong>of</strong> control, trustworthiness factors,
value networks
1. Introduction and research questions
Acquiring, sharing and generating knowledge are viewed as primary processes in organizational
evolution. These processes help companies to choose and adopt new practices in order to increase
<strong>the</strong>ir competitive advantage (Bijaya and Uday Bhaskar, 2011). Scholars argue that it is imperative for
companies to pay attention to <strong>the</strong> development <strong>of</strong> knowledge process in order to acquire competitive
skills and capabilities (Loermans 2002). In addition, <strong>the</strong> key role <strong>of</strong> networking in this process is also
emphasized (Faems, Janssens and Van Looy, 2010).
Despite <strong>the</strong> importance <strong>of</strong> <strong>the</strong> topic, <strong>the</strong>re is no such thing as a common definition <strong>of</strong> network and
knowledge management. Current work defines value networks as “a network <strong>of</strong> relationships that
creates tangible and intangible value through <strong>the</strong> complex and dynamic exchanges between two or
more organizations” (Timonen and Ylitalo 2008, p. 505). Instead <strong>of</strong> <strong>the</strong> narrow definition <strong>of</strong> knowledge
management (KM) as “a set <strong>of</strong> techniques and practice that facilitates <strong>the</strong> flow <strong>of</strong> knowledge into and
within <strong>the</strong> firm” (Birkinshaw, 2001), current research relies on <strong>the</strong> process perspective (Bijaya and
Uday Bhaskar, 2011). The literature review shows multiple approaches on KM processes identifying
several phases (Bijaya and Uday Bhaskar, 2011). Nold (2011) pointed out that Holsapple and Jones’
model (2005) as well as Nonaka and Takeuchi’s model (1995) seem to be “more robust than many
o<strong>the</strong>r models because <strong>the</strong>y attend to identify enabling factors that drive KM influence and integrate
<strong>the</strong> process”. Present paper focuses on Holsapple and Jones’ model, which defines knowledge
leadership (KL) as <strong>the</strong> ability to establish conditions which could help knowledge to generate value.
They suggest that knowledge leadership is characterized by being a catalyst for traits such as
inspiring, mentoring, example setting, establishing a vision, listening, learning, teaching and
knowledge sharing. Thus, KL process involves planning activities (e.g. creating guidelines for aligning
KM with business strategies) and executing activities (e.g. creating a KM culture for sharing
knowledge). In a network perspective, KL should support network members to work jointly towards
<strong>the</strong> shared target. Typically, control mechanisms are implemented to monitor whe<strong>the</strong>r firms are
pursuing <strong>the</strong>ir shared targets: specific formal control systems could be used in order to verify beliefs
<strong>of</strong> actors and to place limitations on <strong>the</strong>ir actions by verifying <strong>the</strong> progress between planned and
executed activities that create a common knowledge approach. Such control tools are not trustneutral
since <strong>the</strong>y might affect levels <strong>of</strong> trust within <strong>the</strong> network. Interestingly, trust levels impact on
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