Exploring Qualitative Differences in Knowledge Sources: A Study of Hierarchical Effects of Judgmental Confidence and Accuracy Performance

Focusing on knowledge management (KM) and strategic decision making in service businesses through the constructs of strategic capital and knowledge sharing, the study investigates qualitative differences in domain-specific knowledge of frontline employees and executives. The study draws on cognitive theory and investigates the extent to which the knowledge of these subject groups is correct with respect to incorporating intuitive judgments by various employee groups into forecasting and following strategic decision making. The authors carried out this investigation through an exploratory study of the subject groups’ confidence and accuracy (CA) performance in a constructed knowledge-based forecasting setting. The groups’ intuitive judgmental performances were examined when predicting uncertain business and industry-related outcomes. The authors surveyed 39 executives and 38 frontline employees in 12 hotels. The analysis is based on a between-participants design. The results from this setting do not fully confirm findings in earlier CA studies. Their results indicate that there are no significant differences in the accuracy of executives (as experts) and frontline employees (as novices). Although executives demonstrate overconfidence in their judgments and frontline employees demonstrate under confidence, in line with earlier CA theory of experts and novices, the differences we find are not significant. Similarly, the CA calibration performance difference between the two groups is not significant. They suggest, among other reasons, that our findings differ from earlier CA studies because of organizational politics and culture by power distance, social capital, misuse of knowledge and the size of the business.