Effective Leadership

Analyzing Leadership and Knowledge Management in Large Companies

Analyzing Leadership and Knowledge Management in Large Companies

Insider Secrets to Grow Your Business Fast With Transformational Leadership: 

In 2001, Chien identified the relationship between the effectiveness of leadership and the type of leadership adopted by top management executives in large companies. He found there was a strong positive correlation between perceived effectiveness by leaders themselves and their employees on the one hand and observed transformational leadership on the other.

In large companies, business leaders need to improve relationships with subordinates to understand mutually expected behaviours. In this example, transformational leadership can provide a significant contribution to leaders in large companies to enhance their interactions and develop the relationships with employees.

Transformational leadership plays a crucial role in developing a learning climate within companies, and empowers employees in the pursuit of organisational goals. Transformational leaders can also enable large companies to actively respond to the changes occurring in the external environment, and create effective changes to build a sustained learning workplace within large companies.

Moreover, it is evident that intellectual stimulation as another aspect of transformational leadership could also positively impact on the effectiveness of leadership in large companies to build a learning workplace through facilitating knowledge sharing around the organisation.

Leaders in large organisations require people who have been inspired to face the changes in the business environment. Based on this, transformational leadership can contribute to these leaders inspiring their followers by inspirational motivation determining a highly desired expectation for employees to some extent. Therefore, transformational leadership is a leadership style which could be employed in order to improve the effectiveness of leadership in large organisations.

Furthermore, in describing the critical role of knowledge management in large organisations, McAdam and Reid (2001) demonstrate that while small organisations suffer from insufficient investment and a lesser degree of advancement in knowledge management, top managers in large companies have a better understanding of the importance of knowledge management and tend to invest more in developing their strategic knowledge management systems.

The results of this research also indicate that large organisations are more advanced in capturing, creating and disseminating knowledge around the organisation. Davies and Warren (2011) assert that the processes of knowledge management in large enterprises can be evaluated by measuring the processes of knowledge finding, integrating and networking with other companies. In Davies and Warren’s (2011) view, large companies firstly investigate new knowledge from various sources. It can be seen that the knowledge finding plays a critical role in large companies in exploring new knowledge through acquiring knowledge and information from the external business environment and developing the required capabilities to create new knowledge within company.

Transformational leadership graph

Secondly, Davies and Warren (2011) focus on internally integrating knowledge through synthesising new knowledge and information in order to improve the effectiveness of organisational processes and the quality of products or services. Finally, they highlight that organisations must commercially collaborate with other companies operating in the business environment, and share their knowledge with them.

This process is also equal to the knowledge reconfiguration process by which knowledge is externally shared with business partners aiming at enabling companies to effectively recognise the changes occurring in external environments and actively responding to them. Therefore, theses three processes of knowledge management could be chosen as a reference to portray knowledge management in large enterprises.


Chien, HJ 2001, A comparison of leadership characteristics in public and large and small private organizations in Taiwan, Nova Southeastern University, US.

Davies, J & Warren P 2011 .Knowledge management in large organizations. In Domingue, J,

Fensel, D & Hendler, JA (ed.) Handbook of semantic web technologies, Springer-Verlag, Berlin.

McAdam, R & Reid, R 2001 ‘SME and large organisation perceptions of knowledge management: comparisons and contrasts’, Journal of Knowledge Management, vol. 5, no. 3, pp. 231 – 241.

About the author

Mostafa Sayyadi

Mostafa Sayyadi

Leadership Development Expert and Senior Corporate Trainer at The National Iranian Gas Company.