The Effect of Leadership Behavior, Knowledge Management Practice, Corporate Culture on Organizational Performance for Banking Institution in Taiwan

Abstract

Under this rapidly changing environment, it is hard to keep the same strategy. However, leaders should know the goal of company development, customers’ future needs, and issue constant change in corporate strategy. After the 1990’s, knowledge management became an important issue, as it can gradually influence organizational performance. Additionally, the execution of knowledge management, leadership behavior and corporate culture will influence business performance. Thus, this study aims to show knowledge management execution, leadership behavior and corporate culture influences the business performance in the context of financial institutions in Taiwan. There are seven banks join this important survey which including Bank of Taiwan, Land bank, Cathay bank, Tai-shin bank, SK bank, Far Eastern bank and En-Tie bank. The research samples are to be collected and the data will be analyzed by Descriptive statistics, Ordinal least squares (OLS) and Partial Least Squares (PLS).The empirical results show that leadership, practice and culture all have positive and significant effect on Taiwan commercial banks’ organizational performance. The results of the Descriptive statistics helped to point out what aspects of the knowledge management system influence were most important for organization to execute knowledge management. According to original theory, leadership, practice and culture these three dimensions are overlapping. Therefore, assumption one is three dimensions run multiple regressions separately. They are four factors in each dimension. And, they are two to three factors in dimension are significant. Assumption two is that three dimension, there are seven factors run multiple regressions, and find out only three factors are significant. The empirical results show the banking system need to improve trust and authentic leadership and enforce other dimension to help organization to improve organizational performance. In order to solve the problem of multicollinearity in OLS multiple regressions, a system equation model was established by using PLS method. The empirical results of PLS method for different assumptions and hypothesis shows that leadership behavior, knowledge management practice and corporate culture have positive and significant effect on organizational performance for banking institution in Taiwan.

Under this rapidly changing environment, it is hard to keep the same strategy. However, leaders should know the goal of company development, customers’ future needs, and issue constant change in corporate strategy. After the 1990’s, knowledge management became an important issue, as it can gradually influence organizational performance. Additionally, the execution of knowledge management, leadership behavior and corporate culture will influence business performance. Thus, this study aims to show knowledge management execution, leadership behavior and corporate culture influences the business performance in the context of financial institutions in Taiwan. There are seven banks join this important survey which including Bank of Taiwan, Land bank, Cathay bank, Tai-shin bank, SK bank, Far Eastern bank and En-Tie bank. The research samples are to be collected and the data will be analyzed by Descriptive statistics, Ordinal least squares (OLS) and Partial Least Squares (PLS).The empirical results show that leadership, practice and culture all have positive and significant effect on Taiwan commercial banks’ organizational performance. The results of the Descriptive statistics helped to point out what aspects of the knowledge management system influence were most important for organization to execute knowledge management. According to original theory, leadership, practice and culture these three dimensions are overlapping. Therefore, assumption one is three dimensions run multiple regressions separately. They are four factors in each dimension. And, they are two to three factors in dimension are significant. Assumption two is that three dimension, there are seven factors run multiple regressions, and find out only three factors are significant. The empirical results show the banking system need to improve trust and authentic leadership and enforce other dimension to help organization to improve organizational performance. In order to solve the problem of multicollinearity in OLS multiple regressions, a system equation model was established by using PLS method. The empirical results of PLS method for different assumptions and hypothesis shows that leadership behavior, knowledge management practice and corporate culture have positive and significant effect on organizational performance for banking institution in Taiwan.