Impact of Knowledge Sharing and Leakage on Innovative Performance

Organizations share knowledge in order to achieve its strategic objectives and enhance innovative performance, most important business process and critical knowledge are subjected to unwanted leakage. This study focused on the aspects and concerns associated with knowledge sharing within and outside organizations. To achieve this objective, the study construct, validate, and test the structure equation modeling for knowledge sharing, knowledge leakage, and innovation performance. A survey was designed and the data were collected in 2015 from managers and owners of 600 industrial companies in KSA. The total responses were 276. Confirmatory factor analysis was used to validate the constructs, then subjected to structure equation modeling to test hypothesis. Model fit parameters indicated normal fit and suitability as the research model. Finding indicated that knowledge leakage negatively mediate the positive impact of knowledge sharing on innovation performance, and some of leakage may be beneficial and have a positive impact, especially when sharing knowledge with customers and competitors in order to develop market innovation. Theoretical implication supplement few empirical studies that shown knowledge leakage as mediator leads to minimize positive results of knowledge sharing. Since KSA recently began the transition to knowledge economy, where much of knowledge sharing occurs dramatically, the study provides analytical framework for Managerial and practical implication about important aspects of knowledge sharing, the method and measures proposed by this study allow organizations to map, formalize and measure their knowledge activities, model can be applied in corporate level to identify the specific impact among organizational units and company's networks.