Knowledge is power? An inquiry into knowledge management, its effects on individual creativity, and the moderating role of an entrepreneurial mindset.

Author:Phipps, Simone T.A.


Organizational performance is critical for the survival of a company. Successful business operation allows firms to compete and stay afloat, while closure looms for those that fail. Many factors influence the effectiveness and performance of both employees and the organization that they serve. Some of these factors include transformational leadership (Bass & Riggio, 2006; Whittington & Goodwin, 2001; Boerner, Eisenbeiss, & Griesser, 2007; Garcia-Morales, Matias-Reche, & Hurtado-Torres, 2008), organizational citizenship behavior (Organ, 1988; Podsakoff & MacKenzie, 1997; Min-Huei, 2004), organizational learning (Arthur & Huntley, 2005; Chich-Jen, Wang, & Fu-Jin, 2009; Chaveerug & Ussahawanitchakit, 2008), and entrepreneurship (Zahra & Covin, 1995; Dyduch, 2008; Covin & Miles, 1999). Ultimately, these dynamics center around, not only the structure and culture of the organization, but also the abilities of the human resources employed within the organization. One such ability is individual creativity. According to Oldham and Cummings (1996), creativity involves the generation of ideas, procedures, or products that are novel or original, and that are potentially relevant for, or useful to, an organization. The authors further clarify novelty as entailing a significant recombination of existing materials or an introduction of completely new materials. Amabile (1983) refers to creativity as a response that is novel, appropriate, and useful to the task at hand.

Creative individuals are an asset to any organization as creativity positively affects organizational performance. Employees' creativity often provides a starting point for successful organizational innovation (Zhou, 2003; Bassett-Jones, 2005), and many researchers agree that creativity is fundamental to ensure an organization's competitiveness and survival (Gilson, 2008; Cox & Blake, 1991). Fentem, Dumas and McDonnell (1998) concede that although the phenomenon of creativity has long been of great interest to the philosophy, psychology, and design research communities, more recently, the business community has become interested due to global competition, our "accelerated culture," and the evermore rapidly changing business environment, which force organizations to constantly innovate their processes, products and services. For today's knowledge and innovation-based economies, as well as entrepreneurship, creativity will define what could be the essence of a business's raison d'etre (De Miranda, Aranha, & Zardo, 2009).

Therefore, it is important to determine the factors that promote or release creativity in individuals, and to find ways to foster their creative vision, so that the organizations for which they work can reap the benefits of their originality and resourcefulness. There are numerous factors that encourage creativity including diversity (Bassett-Jones, 2005), personality, cognitive style, job complexity, relationship with supervisors and coworkers, rewards, evaluation, deadlines and goals, and spatial configuration of work settings (Shalley, Zhou, & Oldham, 2004). Knowledge and learning have also been associated with creativity. Weisberg (1999) mentioned that it is universally acknowledged that one must have knowledge of a field if one hopes to produce something novel within it, because knowledge provides the basic elements or building blocks out of which new ideas are constructed.

However, knowledge must be effectively managed to maximize its creative productivity. Wei and Xie (2008) defined knowledge management as a systematic and organized approach to improve the organization's ability to mobilize knowledge to enhance decision-making, take actions, and deliver results in support of the underlying business strategy. Therefore, KM is a process that aids in the procurement and dissemination of knowledge within an organization. Since creativity builds on knowledge, and KM facilitates the generation, organization, and diffusion of knowledge, KM should positively affect creativity as it ensures the availability of knowledge to employees, who can then assimilate the knowledge as they produce creative solutions.

Another factor that has been associated with creativity is entrepreneurship. Florida (2002) mentions varied forms of creativity including economic creativity, which the author equates with entrepreneurship. According to Pina e Cunha (2007), one of the major issues entrepreneurship research deals with is the creation of opportunities. Ireland, Hitt, and Sirmon (2003) refer to entrepreneurial mindset, which they define as a growth-oriented perspective through which individuals promote flexibility, creativity, continuous innovation, and renewal. Thus, an individual with an entrepreneurial mindset (also referred to as entrepreneurial spirit) should be better equipped rationally or analytically to embody or exemplify creativity. As regards cognitive signs driving the entrepreneurial spirit, creativity is at the heart of an entrepreneur's search for meaning (De Miranda, Aranha, & Zardo, 2009).

The literature suggests that both knowledge management and an entrepreneurial mindset should play a role in individual creativity. Therefore, the primary purpose of this study is to determine the influence of knowledge management on individual creativity, as well as to determine the moderating effect of an entrepreneurial mindset on the knowledge management-creativity relationship. The objectives of the study are as follows:

  1. To explore the relationship between the components of knowledge management (knowledge creation, knowledge storage/retrieval, knowledge transfer, and knowledge application) and individual creativity.

  2. To explore the possibility of an entrepreneurial mindset moderating the relationship between the components of knowledge management and individual creativity.

The significance of this study lies in the ability to use the results to foster an organizational environment, as well as provide resources, and develop processes that promote individual creativity and facilitate the creative process. If the findings show that knowledge management does indeed influence individual creativity, knowledge management systems could be developed with a focus on the components that are shown to impact creativity most. Also, the results can be used in the selection process when hiring new employees or when choosing current employees for special projects. If an entrepreneurial mindset is found to be a moderator, this finding can be considered during selection according to the level of creativity needed to fulfill or surpass the requirements of a particular position or to favorably complete a project.


Knowledge has achieved central importance in modern societies, as well as in business organizations (Hack, 2003), and within knowledge-intensive organizations, techniques for managing existing knowledge and apprehending new knowledge effectively are becoming of key value, particularly where processes are very dynamic (Fentem, Dumas, & McDonnell, 1998). However, there are different views of knowledge, which determine the focus as regards knowledge management (Alavi & Leidner, 2001). The authors explain that depending on whether knowledge is perceived as data and information, an object, a process, a capability, a state of mind, or a condition of having access to information, knowledge management emphasizes exposure to and assimilation of information, building and managing knowledge stocks, the creation, sharing and distribution of knowledge, building core competencies, enhancing learning, or organized access to and retrieval of content.

In this manuscript, knowledge embraces all the aforementioned views, and thus, knowledge management reflects this conceptualization, encompassing the components of systems developed and implemented to support and enhance knowledge management. These components include knowledge creation, knowledge storage/retrieval, knowledge transfer, and knowledge application (Alavi & Leidner, 2001).

According to Nonaka and Takeuchi (1995), knowledge creation involves the acquisition and development of knowledge from both internal and external sources, and is characterized by three main factors, namely metaphor and analogy, the transition from personal to organizational knowledge, and ambiguity and redundancy. Metaphors and analogies assist with the visualization and explanation of difficult concepts, transition from personal to organizational knowledge occurs through individual interaction, and ambiguity and redundancy reflect the willingness to try numerous different approaches, despite the inevitability of some failures.

The authors also mention that knowledge creation...

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