Industrial Management & Data Systems

The impact of leadership on trust, knowledge management, and organizational

performance: A research model
Alex Koohang, Joanna Paliszkiewicz, Jerzy Goluchowski,
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The impact of
The impact of leadership on trust, leadership
knowledge management, and
organizational performance
A research model 521

Alex Koohang Received 18 February 2016

Revised 11 July 2016
Middle Georgia State University, Macon, Georgia, USA Accepted 17 July 2016
Joanna Paliszkiewicz
Department of Economics, Warsaw University of Life Sciences,
Warsaw, Poland, and
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Jerzy Goluchowski
University of Economics, Katowice, Poland

Abstract
Purpose – The purpose of this paper is to build a research model that examines the impact of leadership on
trust, knowledge management and organizational performance.
Design/methodology/approach – An instrument containing six constructs (leadership: leading
organization; leadership: leading people; leadership: leading self, trust, knowledge management and
organizational performance) was designed and administered to subjects from all levels of management in
various organizations in nine regions of the USA. Collected data were analyzed using partial least squares
path modeling to test the hypotheses.
Findings – The study’s findings revealed positive and significant linear connection among leadership (leading
organization, leading people and leading self), trust, knowledge management and organizational performance.
Practical implications – The findings imply that effective leadership (leading organization, leading people
and leading self) contributes to elevated trust among people, promotes the successful implementation of
knowledge management processes, and in turn enhances organizational performance. Therefore, leadership
training and development must be a top strategic priority for any organization.
Originality/value – This study enriches the literature by demonstrating that effective leadership stands as
the bedrock of the elevated trust, the successful knowledge management processes and the enhanced
organizational performance.
Keywords Knowledge management, Leadership, Organizational performance, Trust
Paper type Research paper

1. Introduction
A large body of research has focused on the impact of trust on knowledge management
and organizational performance (e.g. Politis, 2003; Lee and Choi, 2003; Choi et al., 2008;
Paliszkiewicz and Koohang, 2013; Paliszkiewicz et al., 2014). These studies have
documented a positive relationship among the three variables of trust, knowledge
management and organizational performance. Paliszkiewicz et al. (2015) postulated that
within organizations, effective leadership results in increased trust that brings about
sound knowledge management and leads to successful organizational performance. There
are many studies that have researched the positive impact of leadership on performance,
teamwork and/or trust (e.g. Wang et al., 2014; McColl-Kennedy and Anderson, 2002;
Lee et al., 2011; Schaubroeck et al., 2011). Additionally, Srivastava et al. (2006) investigated
Industrial Management & Data
the roles of knowledge sharing and team efficacy in relation to empowering leadership and Systems
team performance. The authors concluded that empowering leadership was positively Vol. 117 No. 3, 2017
pp. 521-537
related to knowledge sharing and team efficacy that subsequently impacted positive team © Emerald Publishing Limited
0263-5577
performance. The motivation to undertake the present study emerges from the need for DOI 10.1108/IMDS-02-2016-0072
 IMDS research to include the element of leadership when studying trust, knowledge
117,3 management and organizational performance. Our aim is to demonstrate whether
effective leadership stands as the foundation of the elevated trust, the successful
knowledge management processes and the enhanced organizational performance.
Therefore, the primary goal of this study is to build a research model proposing that
within organizations, effective leadership elevates trust among employees. Subsequently,
522 the elevated trust among employees contributes to the successful implementation of the
knowledge management processes. Accordingly, the successful knowledge management
processes enhance organizational performance. Consistent with its goal, this paper is
organized as follows. First, a review of the literature covers leadership and its
characteristics, trust and its vital role among people within organizations, knowledge
management definitions and its processes, and organizational performance and its
indicators. Next, the research model is presented. The model builds six constructs or latent
variables (LVs). Each LV contains several associated characteristics or indicators with
their operational definitions. These are leadership: leading organization, leadership:
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leading people, leadership: leading self, trust, knowledge management and organizational
performance. Afterward, we state the study’s hypotheses based on the research model.
The methodology follows the study’s hypotheses and includes an explanation of the
instrument, the population sample, study procedure and data analysis techniques used to
test the hypotheses. Finally, results, discussion of findings and implications for future
research complete the paper.

2. Review of literature
2.1 Leadership
Effective leadership has been the topic of research and scientific discussion for many years
(Burns, 1978; Bennis and Nanus, 1985, Bryman, 2007; Hofmeyer et al. 2015). Leadership is
needed at all levels of the organization. Bennis and Nanus (1985), Burns (1978) and Jong and
Hartog (2007) believed that leadership involves relationship building between the leader and
the follower to reach desired results. Gill et al. (2006) believed that leadership skills such as
motivating, encouraging and recognizing people yield productive results. Leadership is the
ability to influence and motivate people within organizations (Dorfman and House, 2004;
House et al., 1999; Javidan and Carl, 2005). Effective leadership influences job satisfaction,
positive relationships, trustful environment, sound knowledge management and improved
organizational performance (Avolio et al., 2004, Dasborough, 2006, Mastrangelo et al., 2014;
Paliszkiewicz et al., 2015).
According to Mastrangelo et al. (2004), personal leadership is described as the personal
attributes of leaders such as expertise, trust, caring, sharing and ethics. Kouzes and Posner
(1993) defined expertise as the perceived ability and competence of leaders. Effective leaders
delegate authority and share information. They lead ethically and with principle (Mayer
et al., 2009; Schaubroeck et al., 2012).
Leaders are considered authentic when they engage in behaviors such as self-awareness,
relational transparency, balanced processing information and internalized moral
perspective (Gardner et al., 2005; Kernis, 2003; Walumbwa et al., 2008). Self-awareness
means the process of understanding personality, behaviors, habits, emotional reactions,
motivations and how they may impact others. Authentic leaders are aware of their
strengths and weaknesses. Their self-esteem helps them to be truthful in relationships and
to achieve relational transparency. They are less likely to look for self-enhancing
information thus, process information in a coordinated and balanced manner. They use
self-control through internalized standards (Kumar, 2014). The leaders who are perceived as
authentic, tend to show increased commitment, satisfaction and superior performance
(Walumbwa et al., 2008).
 2.2 Trust The impact of
Sabel (1993) defined trust as the confidence between two parties with the understanding leadership
that no party will exploit the other’s vulnerability. Trust creates an opportunity to deal with
the complexity of the world (Luhmann, 1979). It represents how much risk we are willing to
accept in exchange for benefits from interactions with others. Trust is also viewed as the
propensity of an individual who can depend on another person to complete a task without
being monitored (Mayer et al., 1995). 523
Psychologists usually describe trust as a personal trait (e.g. Rotter, 1967), sociologists
recognize trust as a social structure (e.g. Lewis and Weigert, 1985). Economists describe it as
a rational choice mechanism (e.g. Williamson, 1993). In the context of management,
Paliszkiewicz (2013) asserted that trust is the prospect that a person acts favorably toward
the trusting party, behaving or responding in a predictable and mutually suitable manner.
The focus of trust in the literature has been on conceptualization of trust (e.g. Mayer et al.,
1995), building trust (e.g. McKnight et al., 1998), rebuilding trust at interpersonal level (e.g. Kramer
and Lewicki, 2010) and organizational trust (e.g. Sankowska and Paliszkiewicz, 2016).
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Trust has been viewed as an imperative element for organizational success

(Meyerson et al., 2006). Gilbert and Tang (1998, p. 322) described trust in organizations as
“a feeling of confidence and support in an employer […] organizational trust refers to
employee faith in corporate goal attainment and organizational leaders, and to the belief that
ultimately, organizational action will prove beneficial for employees.” Bromiley and
Cummings (1996) believed that increased trust among employees enhances performance
and contributes to organizational profitability.

2.3 Knowledge management

Knowledge is an important asset that provides organizations the ability to embrace, learn
and utilize organizational resources (Wong, 2005; Argote and Miron-Spektor, 2011). Within
organizations, knowledge management places a critical role in efficiency, competitiveness
and productivity (Nonaka, 1991; Kogut and Zander, 1992).
Holsapple and Joshi (2004, p. 596) defined knowledge management as “[…] an entity’s
systematic and deliberate efforts to expand, cultivate and apply available knowledge in
ways that add value to the entity, in the sense of positive results in accomplishing its
objectives or fulfilling its purpose.” Omotayo (2015) viewed knowledge management as a
process where many activities are formed to carry out essential elements of an
organization’s knowledge management strategy and operations. The aim of knowledge
management is to encourage employees to share knowledge (Martinez, 1998).
Horwitch and Armacost (2002) asserted that knowledge management is the creation,
extraction, transformation and storage of the correct knowledge and information. It is to
design better policy, modify the action and deliver results. Chong and Choi (2005)
described knowledge management as the systematic management of organizational
knowledge, which involves the process of creating, gathering, organizing, storing,
diffusing, using and exploiting of knowledge for creating business value and gaining the
competitive advantage. Davenport (1994) believed that knowledge management process
includes capturing, distributing and using knowledge. According to Lee et al. (2005),
knowledge management activities include creation, accumulation, sharing, utilization and
internalization of knowledge.

2.4 Organizational performance

Organizational performance is the measure of an organization’s progress and development.
It shows how well an organization is accomplishing its goals and objectives. Organizational
performance is an analysis of a company’s performance as compared to goals and objectives
(Otley, 1999).
 IMDS The indicators of organizational performance are well documented in the literature, i.e.
117,3 financial (Parmenter, 2015), employee and customer satisfaction (Leong et al., 1990), learning
and growth (Parmenter, 2015), information technology (Melville et al., 2004), human
resources (Becker and Gerhart, 1996), quality (Gosselin, 2005), reliability (White, 1996),
communities of practice (Lesser and Storck, 2001), quality of work life (Rolstadås, 1998) and
innovation (Rolstadås, 1998).
524 Sink and Tuttle (1989) outlines seven indicators that define organizational performance.
They are effectiveness, efficiency, quality and productivity, the quality of work life,
innovation and profitability. Effectiveness is the ability to produce the desired result;
efficiency is the ability to accomplish a job/task with a minimum expenditure of time and
effort. Quality refers to the quality of a product as a measure of excellence and state of being
free from defects, deficiencies and significant variations. Productivity is the ability to
resourcefully generate, create, enhance and/or produce goods and services. The quality of
work life means that the opportunity that is given to employees to improve their personal
lives through their work environment and experiences can contribute to an organization’s
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competitive advantage. Innovation is the process of transforming an idea/invention into a

product or service that creates value is vital to an organization’s survival, and profitability is
the ability to do more to gain the competitive advantage (c.f. Paliszkiewicz et al., 2015).

3. Purpose of the study and hypotheses development

The purpose of this study was to build a research model that examines the impact of
leadership (leading organization, leading people and leading self) on trust, knowledge
management and organizational performance. Figure 1 shows the research model. The model
includes six constructs or LVs. These LVs are LO ¼ leadership (leading organization),
LP ¼ leadership (leading people), LS ¼ leadership (leading self), T ¼ trust, KM ¼ knowledge
management and OP ¼ organizational performance.
Effective leaders bring out engagement and enthusiasm in people by showing a
compelling vision and increasing confidence in achieving goals (Conger and Kanungo, 1987,
1998). In a study conducted by Paliszkiewicz et al. (2015), the authors delineated
15 characteristics that define effective leadership chosen from the literature. These
characteristics are leading organization change; leading innovation; motivating employees;
being grounded in values/principles; leading and resolving conflict; listening; empowering;
interpersonal communication; influencing and being flexible; being self-aware; seeking
feedback; managing time; learning; understanding individual differences/diversity and
inclusion; and building/sustaining relationship among people. For the present study,

LO

LP T KM OP

LO = Leadership (leading organization)

LP = Leadership (leading people)
LS = Leadership (leading self)
Figure 1. LS T = Trust
The research model KM = Knowledge management
OP = Organizational performance
 we chose the 15 leadership characteristics/indicators outlined by Paliszkiewicz et al. (2015) The impact of
and defined three separate leadership constructs: leading organization (LO), leading people leadership
(LP) and leading self (LS). The leading organization (LO) construct encompasses the
characteristics that a leader possesses to ensure the advancement of an organization.
These characteristics are change, innovation, influence and diversity/inclusion. The leading
people (LP) construct includes the characteristics that a leader demonstrates to
improve productivity among people. These characteristics are motivation, listening, 525
empowerment, interpersonal communication, building relationships and conflict resolution.
The Leading self (LS) construct includes the characteristics that enrich a leader’s insight,
self-development and self-improvement for making sound decisions. These characteristics
are being grounded in values and principles; being constantly self-aware of situations;
seeking and accepting feedback for self-improvement; efficiently managing time; and
willing and open to continuously learn for self-development.
Effective leadership empowers and cultivates trust in people. As a result, people are
motivated to assume more responsibilities (Yukl, 2002). Trust enables cooperative, altruistic
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and extra-role behavior (Fukuyama, 1995). Trust fosters a high level of information
exchange (Li et al., 2010; Malhotra and Murnighan, 2002; Casimir et al., 2012). Trust is an
essential component of successful and efficient teamwork (Moreland and Levine, 2002; Salas
et al., 2008; Berry, 2011; Driskell and Salas, 1992; Erdem and Ozen, 2003; Gibson and Cohen,
2003). For the present study, we adopted and modified the ten characteristics of trust from
Paliszkiewicz et al. (2015) and placed them in the trust (T) construct. They are ability/
competence, benevolence, communication, congruency, consistency, dependability,
integrity, openness, reliability and transparency.
Gardner (1989) asserted that effective leadership develops trust among people.
Paliszkiewicz et al. (2015) believed that effective leadership is a prerequisite for the creation
of trust within organizations. Therefore, we theorize that effective leadership (leading
organization, leading people and leading self) can positively influence the elevated trust
among employees within organizations and develop the following three hypotheses:
H1. The effective leadership (leading organization) positively and significantly
contributes to the elevated trust.
H2. The effective leadership (leading people) positively and significantly contributes to
the elevated trust.
H3. The effective leadership (leading self) positively and significantly contributes to the
elevated trust.
Trust is particularly vital in the process of knowledge management (Politis, 2003;
Sankowska, 2013; Zuo and Panda, 2013; Berraies et al., 2015). Holste and Fields (2010)
believed that without trust, people would not be able to share and manage knowledge.
For the present study, we adopted the five characteristics of knowledge management
advanced by Paliszkiewicz (2007) and placed them in the knowledge management (KM)
construct. They are localization; usage of knowledge; knowledge acquisition and
development; knowledge codification; and knowledge transfer.
Kuo (2013) asserted that trust is the basis of generating commitment among members of
an organization for managing knowledge. Therefore, we theorize that the elevated trust
based on effective leadership (leading organization, leading people and leading self)
can positively contribute to the successful implementation of knowledge management
processes within organizations. We then develop the following hypothesis:
H4. The elevated trust within organizations (as a result of effective leadership) positively
and significantly contributes to the successful implementation of knowledge
management processes.
 IMDS Paliszkiewicz et al. (2015) stated that the knowledge management processes can contribute
117,3 to the organizational performance. Organizational performance is the measure of an
organization’s growth (Simonin, 1997). For the present study, we selected the seven
characteristics of organizational performance advanced by Sink and Tuttle (1989) and placed
them in the organizational performance (OP) construct. These characteristics are effectiveness,
efficiency, productivity, quality, quality of work life, innovation and profitability.
526 Zack et al. (2009) found that knowledge management is directly related to organizational
performance, and Simonin (1997) suggested that knowledge management improves
organizational performance. Therefore, we theorize that the successful knowledge management
processes (as a result of elevated trust entrenched from effective leadership) can enhance
organizational performance within organizations. We then develop the following hypothesis:
H5. The successful knowledge management processes (as a result of elevated trust that
is rooted in effective leadership) significantly and positively contribute to the
organizational performance.
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4. Methodology
4.1 Survey Instrument
The survey instrument was first developed by Paliszkiewicz et al. (2015). Based on the research
model, we refined the instrument to include six constructs. The constructs are leadership:
leading organization, leadership: leading people, leadership: leading self, trust, knowledge
management and organizational performance. The items of each construct are as follows.
Leadership: leading organization construct:

(1) Change: a leader must lead change within an organization.

(2) Innovation: it is necessary for a leader to lead innovation within an organization.
(3) Influence: the ability of a leader to positively shape the organization, people and self by
setting a vision, translating it into realistic business strategies and expecting outcomes.
(4) Diversity and Inclusion: a leader values and respects diversity and inclusion within
an organization. Diversity brings about innovation. Inclusion ensures the right
conditions for all, working together to enhance organizational effectiveness.
Leadership: leading people construct:

(1) Motivation: a leader must motivate and bring out the best in people.
(2) listening: a leader must empower others to do their jobs;
(3) empowerment: a leader must be a good listener and put people at ease;
(4) interpersonal communication: a leader’s interpersonal communication is necessary
to bring people together to work effectively;
(5) building relationship: a leader must build and maintain relationships with
subordinates; and
(6) conflict: a leader should not be afraid of conflict (a leader’s attitude should be that
conflict is “good” and should not be avoided).
Leadership: leading self-construct:

(1) Values/principles: in making decisions, a leader must be grounded in values and

principles;
 (2) self-awareness: a leader must be self-aware (knows his or her strengths and The impact of
weaknesses and is willing to improve); leadership
(3) feedback: a leader must seek and use feedback from others;
(4) managing time: a leader must know how to manage time efficiently; and
(5) learning: a leader must seek the opportunity to learn continuously.
Trust construct: 527
(1) Competence: a leader’s ability and competence lead to improved trust among people;
(2) benevolence: compassion and empathy demonstrated by a leader, build trust among
people;
(3) communication: a leader’s sound and constant communication (verbal, non-verbal,
written and visual) improve trust among people;
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(4) congruency: the attitude of partnership and association demonstrated by a leader

build trust among people;
(5) consistency: consistency in doing things by a leader brings about trust among
people;
(6) dependability: exhibiting dependability by a leader develops and creates trust
among people;
(7) integrity: a leader’s honesty and principle contribute to elevated trust among
people;
(8) openness: acceptance and broad-mindedness demonstrated by a leader contribute to
increased trust among people;
(9) reliability: exhibiting reliability by a leader develops and creates trust among
people; and
(10) transparency: a leader’s transparency is central to building trust among people.
Knowledge management construct:

(1) Localization: In any organization, knowledge must be localized to include all

activities that indicate where knowledge exists;
(2) usage of knowledge: successful usage of knowledge depends on creating a set of
roles and skills in organizations that encourage efficient use of knowledge;
(3) knowledge acquisition and development: the culture of embracing the knowledge
that is acquired and developed is important in gaining the competitive advantage;
(4) knowledge codification: organizations must be able to successfully and continuously
re-use the knowledge they capture; and
(5) knowledge transfer: transmission of knowledge and use of the transmitted
knowledge in any organization is vital to gaining the competitive advantage.
Organizational performance construct:

(1) Effectiveness: the ability to produce the desired result should be an important part of
any organization;
(2) efficiency: the ability to accomplish a job/task with a minimum expenditure of time
and effort should be central to any organizations;
 IMDS (3) quality: the quality of a product (as a measure of excellence and state of being free
117,3 from defects, deficiencies and significant variations) brings about the competitive
advantage to any organization;
(4) productivity: the ability to resourcefully generate, create, enhance and/or produce
goods and services is vital;
(5) the quality of work life: the opportunity that is given to employees to improve their
528 personal lives through their work environment and experiences can contribute to an
organization’s competitive advantage;
(6) innovation: the process of transforming an idea/invention into a product or service
that creates value is vital to an organization’s survival; and
(7) profitability: a financial profit or gain gives an organization the ability to do more to
gain the competitive advantage.
The survey instrument used the following measuring scale: 7 ¼ Completely Agree,
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6 ¼ Mostly Agree, 5 ¼ Somewhat Agree, 4 ¼ Neither Agree nor Disagree, 3 ¼ Somewhat

Disagree, 2 ¼ Mostly Disagree, 1 ¼ Completely Disagree.

4.2 Subjects and procedure

The survey instrument was administered electronically via a professional internet survey
site to 2,161 subjects from all levels of management in various organizations in nine regions
of the USA. They were from public, private and not-for-profit organizations. Of the
2,161 subjects, 223 completed the survey. Six of the 223 surveys were eliminated because of
the missing data yielding a final population sample of 217.
The subjects were male (47.5 percent, n ¼ 103) and female (52.5 percent, n ¼ 114).
The subjects’ highest degree earned were bachelor’s (63.1 percent, n ¼ 137), master’s
(26.7 percent, n ¼ 58) and doctorate (10.1 percent, n ¼ 22). Their job function included senior/
top level management (24.9 percent, n ¼ 54), middle level management (44.7 percent, n ¼ 97)
and supervisory/lower level management (30.4 percent, n ¼ 66). Subjects were told that their
participation in the study was voluntary. All subjects were over the age of 18. The subjects
were assured confidentiality and anonymity.

4.3 Data analysis

Partial least squares (PLS) path modeling, a variance-based structural equation modeling
(SEM) was used to analyze the data. The PLS path modeling performs three essential analyses
before testing for hypotheses (Ringle et al., 2005). These analyses are establishing convergence
validity, establishing discriminant validity and examining the structural model.
To establish convergent validity, the following must be met: indicators’ loadings for each
LV should be significant and greater than 0.70; the average variance extracted (AVE)
for each LV should be greater than 0.50; and the composite reliability (CR) for each LV
should be greater than 0.80.
To establish the discriminant validity, the square root of AVE of a LV should be greater
than its correlations with all other LVs.
Once the convergence validity and discriminant validity are established, the structural
model is used to evaluate the R2 values of the dependent variable. The R2 values determine
the predictiveness of the research model. Falk and Miller (1992) assert that for any
meaningful interpretation of data, R2 values must be at the minimum 10 percent.
Finally, the hypotheses are tested for acceptance or rejection. According to Chin (1998),
the strength of the contribution of the independent variable on the dependent variable is
determined by the standardized path coefficients. Consequently, the t-value determines the
acceptance or rejection of the hypotheses.
 5. Results The impact of
5.1 Establishing convergence validity leadership
To establish the convergence validity, we look at the results of each LV for the indicators’
lodgings, the AVE and the CR. First, all indicators’ loadings for each LV must be greater than
0.70. The “conflict” indicator from the LV_2: (leadership – leading people) the “managing time”
indicator from the LV_3: (leadership – leading self) and the “transparency” indicator from the
LV_4: (trust) were removed from the model because the loadings of these indicators were less 529
than 0.70. After removal of these three indicators from the model, the indicators’ loadings for
each LV yielded values greater than 0.70. Second, the AVE for each LV must be greater than
0.50. The results of AVEs for all six LVs yielded values greater than 0.50. Third, the CR index
for each LV was greater than 0.80. These results successfully established the convergence
validity of the research model (see Table I).

5.2 Establishing discriminant validity

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To establish the discriminant validity, the results of the square root of AVE of each LV must
be greater than its correlations with all other LVs. As can be seen in Table II, the sufficient
discriminant validity was established for the research model.

5.3 The structural model

The R2 values for the Trust (T), knowledge management (KM) and organizational
performance (OP) were 0.74, 0.48 and 0.48, respectively. Therefore; the model’s R2 values
have established a substantial and meaningful interpretation of the data.

5.4 Accepting/rejecting the hypotheses

Table III shows the standardized path coefficients results and the t-value for determining
the acceptance or rejection of the study’s hypotheses.
H1 that stated “the effective leadership (leading organization) positively and
significantly contributes to the elevated trust” was accepted ( β ¼ 0.19, t ¼ 2.22, p ¼ o0.01).
H2 that stated “the effective leadership (leading people) positively and significantly
contributes to the elevated trust” was accepted ( β ¼ 0.34, t ¼ 2.38, p ¼ o0.01). H3 that stated
“the effective leadership (leading self) positively and significantly contributes to the elevated
trust” was accepted ( β ¼ 0.40, t ¼ 2.70, p ¼ o0.01). H4 that stated “the elevated trust within
organizations (as a result of effective leadership) positively and significantly contributes to the
successful implementation of knowledge management processes” was accepted ( β ¼ 0.69,
t ¼ 10.35, p ¼ o0.001). H5 that stated “the successful knowledge management processes (as a
result of elevated trust that is rooted in effective leadership) significantly and positively
contribute to the organizational performance” was accepted ( β ¼ 0.68, t ¼ 9.38, p ¼ o0.001).

6. Discussion
This study was undertaken to build a research model that included six constructs or LVs.
The constructs were leadership (leading organization, leading people and leading self), trust,
knowledge management and organizational performance. Through path analysis, the study
endeavored to test five hypotheses. H1-H3 included three leadership constructs and the
trust construct, stating that the effective leadership, i.e. leading organization, leading people
and leading self (each separately) positively and significantly contributes to the elevated
trust within organizations. H4 stated that the elevated trust within organizations positively
and significantly contributes to the successful knowledge management processes. H5 stated
that the successful knowledge management processes positively and significantly
contribute to the enhanced organizational performance. The five hypotheses were tested
using PLS path modeling technique.
 IMDS Loadings AVE Composite reliability Cronbach’s α
117,3
LO (leadership – leading organization)
Change 0.71 0.55 0.83 0.73
Innovation 0.75
Influence/flexibility 0.77
Diversity and inclusion 0.71
530 LP (leadership – leading people)
Motivation 0.74 0.62 0.89 0.85
Empowerment 0.80
Listening 0.80
Interpersonal communication 0.81
Build relationship 0.79
LS (leadership – leading self)
Values/principles 0.84 0.68 0.89 0.84
Self-awareness 0.85
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Feedback 0.85
Learning 0.74
T (trust management)
Competence 0.81 0.69 0.95 0.94
Benevolence 0.82
Communication 0.81
Congruency 0.85
Consistency 0.79
Dependability 0.85
Integrity 0.83
Openness 0.83
Reliability 0.88
KM (knowledge management)
Localization 0.71 0.70 0.92 0.89
Usage of knowledge 0.87
Knowledge acquisition and development 0.87
Knowledge codification 0.85
Knowledge transfer 0.88
OP (organizational performance)
Effectiveness 0.72 0.58 0.91 0.88
Efficiency 0.86
Productivity 0.71
Table I. Quality 0.82
Reliability and Quality of work life 0.73
validity measures of Innovation 0.78
the research model Profitability 0.71

LV_1 LV_2 LV_3 LV_4 LV_5 LV_6

LO 0.74
LP 0.72 0.79
LS 0.78 0.81 0.82
T 0.74 0.80 0.82 0.83
Table II. KM 0.66 0.62 0.68 0.69 0.84
Correlations between OP 0.59 0.67 0.65 0.69 0.68 0.76
latent variables and Notes: LO, leadership (leading organization); LP, leadership (leading people); LS, leadership (leading self); T, trust;
square roots of AVEs KM, knowledge mangement; OP, organizational performance. The values in italic indicate square roots of AVEs
 The study’s findings revealed positive and significant linear connection among leadership The impact of
(leading organization (LO), leading people (LP) and leading self (LS)), trust (T), knowledge leadership
management (KM) and organizational performance (OP). Specifically, these findings imply
that effective leadership (leading organization, leading people and leading self) contributes
positively to the elevation of trust among employees. The elevation of trust among employees
(as a result of the effective leadership) contributes positively to the successful implementation
of knowledge management processes. The successful implementation of knowledge 531
management processes (as a result of the elevation of trust that is based on the effective
leadership) contributes positively to the enhanced organizational performance. These findings
confirm previous studies that effective leadership is a required element for developing trust
among people within organizations (Gardner, 1989; Paliszkiewicz et al., 2015); the presence of
trust is imperative to the process of knowledge management (Politis, 2003; Sankowska, 2013;
Zuo and Panda, 2013; Berraies et al., 2015); and the sound knowledge management processes
enhances organizational performance (Simonin, 1997; Zack et al., 2009).
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6.1 Theoretical contributions

Through PLS path modeling, a variance-based SEM, this study’s research model was tested
for convergence validity to ensure the significance of all indicators belonging to each
construct. Three indicators were eliminated because they did not yield significant loading.
The eliminated indicators were “conflict” indicator from the leadership (leading people (LP))
construct, “managing time” indicator from the leadership (leading self (LS)) construct and
“transparency” indicator from the trust (T) construct. After eliminating these indicators, the
model showed a significant convergence validity that included the acceptable AVE and the
CR for each construct. Accordingly, the LO construct yielded four of the five original
indicators (change, innovation, influence and diversity/inclusion). The LP construct
included the original five indicators (motivation, listening, empowerment, interpersonal
communication and building relationship). The LS construct yielded four of the five original
indicators (values/principles, self-awareness, feedback and learning). The t-construct
included nine of the ten original indicators (competence, benevolence, communication,
congruency, consistency, dependability, integrity, openness and reliability). The KM
construct included the original five indicators (localization, usage of knowledge, knowledge
acquisition/development, knowledge, codification and knowledge transfer). Finally, the OP
construct included the original seven indicators (effectiveness, efficiency and productivity,
and quality, quality of work life, innovation and profitability).
The discriminant validity was then established, and the structural model that evaluated the
R2 values of the dependent variable successfully confirmed the predictiveness of the research
model. This indicated that the theoretical research model is strong enough to test for a linear
connection among leadership (leading organization (LO), leading people (LP) and leading self
(LS)), trust (T), knowledge management (KM) and organizational performance (OP).

Standardized path coefficient t-value p-value Hypothesis accepted or rejected

LO→T β ¼ 0.19 2.22 o 0.01 Accepted

LP→T β ¼ 0.34 2.38 o 0.01 Accepted
LS→T β ¼ 0.40 2.70 o 0.01 Accepted
T→KM β ¼ 0.69 10.35 o 0.001 Accepted
KM→OP β ¼ 0.68 9.38 o 0.001 Accepted Table III.
Notes: LO, leadership (leading organization); LP, leadership (leading people); LS, leadership (leading self); Path coefficients
T, trust, KM, knowledge mangement; OP, organizational performance and t-values
 IMDS Furthermore, the inclusion of the three leadership constructs in the research model implies that
117,3 effective leadership (leading organization, leading people and leading) stands as the foundation of
the elevated trust, the successful knowledge management processes, and the enhanced
organizational performance. In addition, the three leadership constructs in the research model can
be embraced for further studies in future to verify the results of the present study.

532 6.2. Practical implications

As documented in the literature, scholars such as Mintzberg and Waters (1982), Waldman
et al. (2001), Peterson et al. (2003) and Peterson et al. (2009) agree that leadership is one of the
most significant predictors that determines the success of organizations. The major
implication of the findings of this study is that leadership (leading organization, leading
people and leading self) stands as the bedrock of elevated trust, the successful knowledge
management processes, and in turn the enhanced organizational performance. This
implication guides a major imperative recommendation for practice, i.e. leadership training
and development must be a top strategic priority for all organizations.
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Rothwell (2002) stated that organizations are constantly faced with the challenge of
leadership training and development. However, highly successful organizations rise above
this challenge by sound planning for leadership training and development (Conger and
Fulmer, 2003). Therefore, organizations must include leadership training and development
in the planning to produce leaders that possess skills in leading organization, leading people
and leading self.
Furthermore, leadership is the process of defining and refining skills. It involves
continuous development, growth and improvement. The leadership skills (leading
organization, leading people and leading self) can be sharpened through mentoring,
coaching, guidance, practice and continuous leadership assessment (Day, 2001).
The findings further imply that in leading organization, leaders can positively lead
change and advance innovation. They set a clear vision and translate it into business
strategies with expected outcomes. They give close attention to diversity and inclusion.
In leading people, leaders should motivate, listen, empower and bring people together. They
should demonstrate good interpersonal communication skills to build and sustain
relationships. In leading self, leaders must lead based on values and principles. They are
aware of their strengths and weaknesses. Leaders ask for feedback and use the feedback for
self-improvement. Leaders continuously seek the opportunity to learn.

6.3 Conclusion, limitations and future research

This study built a research model to examine the impact of leadership on trust, knowledge
management and organizational performance. The findings showed a positive and
significant linear connection among leadership (leading organization, leading people and
leading self), trust, knowledge management and organizational performance. The findings
imply that effective leadership contributes to the elevation of trust among employees.
The elevation of trust, therefore, contributes to the successful implementation of knowledge
management processes. Consequently, the successful implementation of knowledge
management processes contributes positively to the enhanced organizational
performance. In conclusion, effective leadership stands as the bedrock of the elevated
trust, the successful knowledge management processes, and the enhanced organizational
performance.
This study is not without limitations. The collected data were self-reported. This may
contain potential sources of bias that can limit the generalizability of the findings.
Furthermore, while the population sample for the present study was fairly balanced among
the regions of the USA, a larger sample may have yielded better generalizability of results.
Future studies should focus on a different and larger population sample.
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Corresponding author
Alex Koohang can be contacted at: alex.koohang@mga.edu

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