Making the Most of
Knowledge Sharing
By R. Cameron Cockrell; Shani N. Robinson, CPA; and Dan N. Stone
EXECUTIVE SUMMARY
Every organization—whether it is a
commercial enterprise, a university, or
a nonprofit—is only as good as its collective knowledge base. Smart people
drive success, but no single person
can do it alone. An open environment
that encourages knowledge sharing is
the key to fostering innovation and
creating a competitive landscape, both
within the firm and externally. A survey of CMAs (Certified Management
Accountants) examines how well
U.S. organizations are mining this
important resource.
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
he public’s trust in financial professionals has been
seriously shaken in recent years. The banking
bailout, the Madoff Ponzi scheme, collateralized
debt obligations, and a raft of wrongful foreclosures have all fueled beliefs that financial professionals lack ethics and systematically manipulate information
out of greed. In addition, a recent global KPMG investigation
indicated that the “typical fraudster” is a 36- to 45-year-old
male employee who “holds a senior management position…in
the finance function or in a finance-related role.”1
Is there truth to the public’s perception of a dysfunctional
culture within the finance industry? And are there ways to
lessen the extent of greedy behavior that was evident in some
of the financial scandals?
Our research suggests that a better understanding of
knowledge sharing (KS) among accounting and finance professionals across industries helps address these concerns.
Specifically, a recent survey that we conducted of those who
hold the CMA® (Certified Management Accountant) credential identified key steps to assist finance and accounting managers in building stronger KS environments while simultaneously reducing the potential for counterproductive, greedy
behavior. These findings can help managers combat the negative perceptions of finance and accounting professionals—real
or imagined—that persist in the public eye.
T
21
FALL 2013, VOL. 15, NO. 1
To gain insight into the recent financial scandals, we
first considered the role and importance of knowledge
sharing among finance professionals. Functional KS,
which we define as “knowledge sharing that benefits
the sharers’ organization,” is a critical driver of economic growth and firm value. In contrast, dysfunctional
KS, motivated by personal gain or reward, harms or fails
to benefit the sharers’ organization. Despite the importance of functional KS to organizational success, our experience suggests that many organizations—often
through the misuse of financial incentives—create
knowledge cultures that simultaneously motivate dysfunctional KS while discouraging functional KS.
worse—important insights into the joint influence of organizational cultures and financial rewards on KS. Examples of functional and dysfunctional KS include:
◆ Functional. Sharing knowledge with management to
improve organizational decisions. For example, a
management accountant or auditor advises a client
that an existing, implemented technology or system
should be replaced.2
◆ Functional. Sharing “war stories” with colleagues
about challenging management accounting issues.
For example, representatives from a pilot branch office share lessons learned from implementing a 360degree assessment process.
◆ Dysfunctional. In a situation where a known solution
exists, intentionally submitting a less-efficient solution (“wheel reinvention”) in order to obtain a reward.3 This would include, for example, copying and
distributing commonly known advice on managing
the risks related to information systems development
or related to managing a project.
◆ Dysfunctional. Sharing “more than you know.” An example would be copying and sharing a colleague’s
spreadsheet template with another work group when
the sharer knows the spreadsheet is tangential or
even completely unrelated to the current problem.4
Theory and Expectations
Two theories of behavior underlay our investigation:
self-determination theory (SDT) and the triple helix
model. SDT argues that the type of motivation influences the resulting quality of motivation. The four types
of motivators are extrinsic, introjected, identified, and
intrinsic. Extrinsic motivators (such as a desire for
wealth or power) and introjected motivators (based on
guilt and shame, for example) produce “low-quality”
motivation that, while producing some functional outcomes, more often results in dysfunctional behaviors. In
contrast, intrinsic and identified motivators produce
“high-quality” motivation. These motivations are based
on passion and a commitment to shared values, respectively. More often, they result in functional behavior
rather than dysfunctional behaviors. Based on an extension of SDT, we speculated that the influence of external motivators on KS would depend on the extent to
which organizations attempt to build on the intrinsic
and identified motivations of their workforce.
Our research also applies the triple helix model, which
helps describe differences in the “knowledge cultures”
of organizations and industries. Specifically, the triple helix model posits that the cultures found in industry, university, and government organizations are characterized
by different motivations, goals, and forms of control. According to this theory, the primary knowledge goal of industry is wealth creation, whereas the primary knowledge goal of academia is knowledge creation. When
overlaid with these relevant theories, survey data collected with the help of IMA® provides—for better or
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
KS Culture and Motivations
We surveyed 428 CMAs regarding their perceptions of
the relationship between organizational culture and
knowledge sharing. Participants told us about the following aspects of their organizations:
1. Perceived financial incentives for KS (the extent to
which organizations provide financial rewards for
KS),
2. The KS culture (the extent to which the organization’s KS culture promotes trust, openness, and
sharing),
3. The quality of KS motivation (the extent to which
KS motivation is based on intrinsic and identified vs.
introjected and extrinsic motivation), and
4. The extent of pseudo-knowledge sharing (the extent
to which participants mask useless knowledge as
useful in order to obtain financial rewards).
Appendix A presents the research instruments that
22
FALL 2013, VOL. 15, NO. 1
we used to assess these constructs.
Based on the triple helix model, we decided to focus
on two industries: finance, investment, and real estate
(FIRE) and higher education (HIED), which we expected would have differing organizational cultures.
Our survey sample included 102 respondents in these
industries, split almost evenly between the two.
Table 1: Descriptive Statistics
MEAN
VARIABLE
FIRE
HIED
(N=52)
(N=50)
39%
60%
Gender (% of Males)
Education*
Age
1.64
2.38
40.04
46.60
Organizational Tenure (Years)
What Our Study Revealed
Knowledge Culture
Different KS cultures do indeed exist between the
FIRE and HIED industries, as the results in Table 1
suggest. Despite similar backgrounds and educations,
finance and accounting professionals in FIRE industries
share more worthless “pseudo-knowledge”—useless
knowledge shared in order to obtain a personal
reward—than those in HIED. Further, the KS culture
in the FIRE industry includes higher levels of mistrust
and less openness to functional sharing.
Because of these differences in KS cultures, offering
financial incentives for KS in FIRE vs. HIED industries had very different results, as illustrated in Figure 1.
In organizations characterized by openness, trust, and
the sense that KS was both fun and valued, offering financial rewards enhanced functional KS (shown in the
upper-right corner of Figure 1). In these organizations,
offering financial rewards supercharged an already vibrant KS culture. KS and organizational commitment
were highest in functional cultures that offered financial
incentives for KS, but KS was also functional, though
somewhat less so, in trusting cultures that did not offer
financial rewards (shown in the upper-left corner of
Figure 1). We most often observed positive effects from
financial rewards in HIED settings, where offering
even small rewards—linked to strong interpersonal ties
among workers—created positive outcomes.
On the other hand, in organizations characterized by
distrust and a sense that KS was just another burden
imposed from above, offering rewards for KS had an opposite effect. Specifically, in distrusting knowledge cultures, offering financial rewards supercharged the existing dysfunctional KS culture (shown in the lower-right
corner in Figure 1). This result made an already distrusting culture even more narcissistic: more internally
focused rather than team- and sharing-focused. Hence,
in these organizations, financial incentives made a bad
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
6.96
10.03
20.52
23.36
Pseudo-Knowledge Sharing
10.17
8.00
Quality of Knowledge-Sharing
16.06
20.40
6.58
5.60
Motivation
Financial Incentives
*1 = Undergraduate degree, 2 = Master’s degree, 3 = Ph.D.
culture even worse. In dysfunctional cultures that did
not offer financial incentives, KS was also dysfunctional,
but less so than when financial incentives were offered
(shown in the lower-left corner in Figure 1). We saw
these effects most often in FIRE industry organizations,
Figure 1: Effects of Rewards
and Culture on Knowledge
Sharing
◆ Culture:
◆ Culture:
Trusting
◆ Rewards:
Low
Trusting
◆ Rewards:
High
Moderate
functional
sharing
Moderate
dysfunctional
sharing
◆ Culture:
Distrusting
◆ Rewards:
Low
23
FALL 2013, VOL. 15, NO. 1
High
functional
sharing
High
dysfunctional
sharing
◆ Culture:
Distrusting
◆ Rewards:
High
where financial rewards often increased both knowledge hoarding, such as failing to share contact information with colleagues, and dysfunctional, individually
motivated KS, such as duplicative contributions to a
knowledge repository.
(2) Rally leaders to develop strategies and interventions
Limitations and Implications
One caution about our results is that we focused on two
industries where we expected, and found, the biggest
differences in KS cultures. While we would expect our
results to hold in other industries, the size of the effects
would likely be smaller in industries where the organizational cultures are less extreme. Based on our results,
it appears that financial incentives matter to KS but
not in the ways that many professionals and executives
believe. Specifically, financial incentives strengthened
whatever organizational culture existed before their
implementation. In trust-based organizations where
the KS culture was functional, offering incentives
increased positive sharing—a result most often observed in HIED. When the KS culture was backbiting
and mistrustful, however, and existing KS was often
dysfunctional—which we saw more often in FIRE
organizations—offering incentives resulted in morebrazen acts motivated to obtain individual rewards,
usually to the organization’s detriment.
Thus our results suggest that the key to creating a
functional KS culture is not the incentives but rather
what already lies beneath—the extent of trust and
openness that employees feel toward one another, management, and the organization.
(3)
(4)
(5)
Key Steps for Management
How can organizations build stronger functional KS cultures? Key steps include:
(1) Establishing a “tone at the top” of honest professionalism, rather than greed, is critical to a functional KS culture. A recent article in Strategic Finance
illustrates three cases (Groupon, Chesapeake Energy, and Enron) of how a dysfunctional tone at the
top led organizations to systematically withhold bad
information from investors.5 In contrast, a commitment to telling “the truth and nothing but the
truth” will produce long-term loyalty and commitment from both customers and employees.
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
(6)
to align the firm’s culture to support functional
knowledge use and sharing through acts of kindness
and thoughtfulness. An example would be identifying complex or sensitive accounting and control issues and developing training sessions to empower
inexperienced employees to manage them better.
Focus first on building a functional KS culture that
includes trust in the institution and among team
members. Then encourage employees to engage in
knowledge-sharing activities for and with each other
in order to build a culture of teamwork and reciprocity that promotes innovation. Such knowledge sharing can help discover cases where, for example, employee and customer interests do not align.
Institute and highlight nonfinancial rewards for KS
that instill pride, feelings of accomplishment, and
loyalty. Examples include recognizing an employee
who shares, in a knowledge repository, the lessons
learned from working through a difficult accounting
issue or a loyal employee who focuses on ensuring
that the managerial accounting systems provide information that improves product quality.
Restructure financial compensation for KS contributions to be sure that they reward team and shared
contributions rather than just individual ones. For
instance, organizations may benefit from instituting
cooperative, team-oriented competitions or brainstorming sessions that encourage partnering toward
shared goals. On the other hand, examples of dysfunctional KS include situations in which employees
share useless or pseudo-knowledge with each other,
resulting in misleading data or information overload.
Employee rewards and compensation must align
both with organizational values and with delivering
value to customers.
Leverage technology to build KS portals and databases to enable employees to share their expertise.
Such systems must facilitate and promote sharing as
well as protect proprietary and confidential information from being distributed outside of the network.
What Should Happen
In the current economic climate, many organizations do
not (or perhaps are unable to) offer higher financial
24
FALL 2013, VOL. 15, NO. 1
rewards to accounting and finance professionals. Our research suggests that external rewards, at least with respect to organizational KS, are the icing, not the cake.
Still, carefully crafted and delivered nonfinancial rewards can often produce a level of commitment, loyalty,
and passion that is not matched by a bonus or a salary
increase. Organizations first must get the KS culture
right. Then they can incorporate financial incentives—
where feasible—to reward loyalty, initiative, and knowledge sharing to thereby supercharge a well-structured,
functional knowledge-sharing culture. ■
Endnotes
1 KPMG International, Who is the Typical Fraudster? KPMG International, Switzerland, June 2011.
2 Chee W. Chow, F. Johnny Deng, and Joanna L. Ho, “The
Openness of Knowledge Sharing within Organizations: A Comparative Study of the United States and the People’s Republic
of China,” Journal of Management Accounting Research, December
2000, pp. 65-95.
3 Louise Fickel, “Case Files: Knowledge Management—Knowit-alls,” CIO Magazine, March 2001, pp. 90-93.
4 Raghu Garud and Arun Kumaraswamy, “Vicious and Virtuous
Circles in the Management of Knowledge: The Case of Infosys
Technologies,” MIS Quarterly, March 2005, pp. 9-33.
5 Alfred M. King, “Tone at the Top: Why Investors Should Care,”
Strategic Finance, March 2013, pp. 25-31.
R. Cameron Cockrell, Ph.D., is an assistant professor of accounting at Xavier University in Cincinnati, Ohio. He can
be reached at (513) 745-3206 or [email protected].
Further Reading
Olivia Kyriakidou, “Developing a Knowledge Sharing Culture,”
Management Services, 2004, pp. 22-23.
Frederick. F. Reichheld, Loyalty Rules: How Today’s Leaders Build
Lasting Relationships, Harvard Business Press, Boston, Mass.,
2003.
Edward Deci, Richard Ryan, and Dan Stone, “Beyond Talk: Creating Autonomous Motivation Through Self-Determination
Theory,” Journal of General Management, Spring 2009, pp. 75-91.
Erika Tanhua-Piiroinen and Johanna Sommers-Piiroinen, “Knowledge Sharing Cultures in Finance and Insurance Companies—
Needs for Improving Informal Collaborative e-Learning,” International Journal of Advanced Corporate Learning, 2013, pp. 36-39.
Shani N. Robinson, Ph.D., CPA, is an assistant professor of
accounting at Sam Houston State University in Huntsville,
Texas. You can contact Shani at (936) 294-4241 or
[email protected].
Dan N. Stone, Ph.D., CPA (inactive), is Gatton Endowed
Chair in Accountancy at the University of Kentucky in Lexington, Ky., where he also is the director of Graduate Studies
and director of the Ph.D. program for the Von Allmen
School of Accountancy. He is a member of IMA’s Northern
Kentucky Chapter. Dan can be reached at (859) 257-3043
or [email protected].
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
25
FALL 2013, VOL. 15, NO. 1
Appendix A: What the Study Asked CMAs
Perceived Financial Incentives for Knowledge Sharing (4 items)
Source: Developed for this paper.
Question: Please indicate your level of agreement with the following statements regarding your organization’s environment for knowledge sharing.
Scale: Five-point Likert: 1 = not at all true, 5 = very true
1. The firm or company offers monetary incentives or other financial rewards (e.g., raises or bonuses) for sharing
knowledge with the firm or other coworkers.
2. The firm or company offers monetary incentives or other financial rewards for knowledge sharing within groups
and teams.
3. The firm or company offers monetary incentives or other financial rewards for knowledge sharing between
groups and teams.
4. The firm or company offers monetary incentives or other financial rewards for contributions made to a knowledge repository or electronic database.
Knowledge-Sharing Culture (7 items)
Source: Adapted from Jay Liebowitz and Yan Chen, “Knowledge Sharing Proficiencies: The Key to Knowledge
Management,” Handbook on Knowledge Management 1: Knowledge Matters, Clyde W. Holsapple, editor, Springer-Verlag,
Heidelberg, Germany, 2003; and developed for this paper.
Question: Please indicate your level of agreement with the following statements regarding your organization’s environment for knowledge sharing.
Scale: Five-point Likert: 1 = not at all true, 5 = very true
1.
2.
3.
4.
5.
6.
7.
The organization promotes the trust that is needed to encourage knowledge sharing among employees.
The organization has a knowledge-sharing rather than a knowledge-hoarding culture.
The organization makes it easy to share ideas with others.
The organization encourages people who work in groups and teams to share knowledge with one another.
Knowledge-sharing activities earn praise that indicates people are doing their jobs well if they share knowledge.
Knowledge-sharing activities earn praise that indicates what a good employee should do.
The organization does things that make sharing knowledge with others fun.
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
26
FALL 2013, VOL. 15, NO. 1
Quality of Knowledge-Sharing Motivation, i.e., Relative Autonomy Index (4 items)
Source: Developed for this paper. Construct, i.e., Relative Autonomy Index (RAI), adapted from Richard M. Ryan and
James P. Connell, “Perceived Locus of Causality and Internalization: Examining Reasons for Acting in Two Domains,” Journal of Personality and Social Psychology, November 1989, pp. 749-761.
Question: I share my professional knowledge with others.
Scale: Five-point Likert: 1 = not at all true, 5 = very true
Intrinsic
1. Because it is fun.
2. Because I enjoy doing so.
3. Because of the happiness I feel when I share knowledge with others.
4. Because it is interesting and satisfying to share my professional knowledge.
5. Because it is interesting to see how my ideas affect the people I share them with.
Identified
1. Because I want others to understand what I know.
2. Because it is important to me to share knowledge.
3. Because I think it is important to help others at work.
4. Because it is satisfying to help others.
5. Because I believe it is an important personal attribute to share what I know with others.
Introjected
1. Because I want my supervisor to think I’m a good employee.
2. Because I feel bad about myself if I don’t.
3. Because I want people to like me.
4. Because I want people to share their knowledge with me.
5. Because it makes me feel more intelligent.
External
1. Because I could lose my job if I didn’t.
2. Because it is required by my job.
3. Because it would harm my relationships if I did not share what I know with others.
4. Because I know that I’ll get a reward for doing so.
5. Because I feel that I must or I’ll be punished.
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
27
FALL 2013, VOL. 15, NO. 1
Pseudo-Knowledge Sharing (5 items)
Source: Developed for this paper.
Question: Please describe your level of agreement with the following statements regarding knowledge sharing.
Scale: Five-point Likert: 1 = not at all true, 5 = very true
1. If others would evaluate my useless knowledge as useful, I would share information that has little value to
others so that I could increase my job performance evaluation scores.
2. I am willing to share information that has little value to others because I might still get credit for helping others
on my job evaluation.
3. If others would evaluate my useless knowledge as useful, I would share information that has little value to
others so that I could improve my supervisors’ perceptions of my job performance.
4. I would share knowledge with little or no value if it meant I might get a bonus.
5. I sometimes share information that has little value to others because I might still get a reward anyway.
M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY
28
FALL 2013, VOL. 15, NO. 1