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1 International Research Journal of Applied and Basic Sciences 2013 Available online at ISSN X / Vol, 7 (6): Science Explorer Publications Effects of organizational culture, structure and strategy on organizational effectiveness by using knowledge management Case Study: Seven International Transportation Company Razieh naserinajafabady 1, Hassan Rangriz 2, Javad Mehrabi 3 1. MA Student of Executive Management, Kermanshah Islamic Azad University, Department of Sciences and Research Unit, Kermanshah, Iran. 2. Associate Professor of Business Administration, faculty of management university of Economic, NO, 66, Roudsar Ave, Hafez Ave, p.o. 3. Assistant professor, faculty of management& Accounting, Qazvin branch, Islamic Azad University, Qazvin, Iran,NO.1,Daneshgah Ave,p.o. Corresponding Author raz.nas1366@gmail.com ABSTRACT: Today, one of the most important and valuable assets at any organization is organizational knowledge. Therefore, organizations seek to identify crucial factors and an effectual bed to make knowledge management, and while enhancing organizational effectiveness, take maximum advantage of their knowledge of resources and environment. Therefore the aim of this study is to investigate the effects of organizational culture, structure and strategy on the effectiveness of organization through knowledge management. The present study is applied in terms of objective and is of a correlative-descriptive type in terms of data collection. The study statistical community is composed of all employees and managers (300 persons) in international transportation company Seven. The study sample includes 200 employees and managers. To gather data, library studies and questionnaires were used. Data analysis and hypotheses testing were performed using structural equation model and particularly path analysis technique using LISREL software. The study results indicated that knowledge management acts as a mediator between the effects of organizational culture on organizational effectiveness, and partially acts as a mediator between the effect of structure and strategy on organizational effectiveness. The findings imply that one of the important factors in organizations for achieving organizational effectiveness and achieving successful knowledge management is taking privilege of a culture best suited for that particular organization. Finally, the output of the software represents the suitability of the model. Keywords: Knowledge management, organizational effectiveness, organizational culture, organizational strategy, organizational structure INTRODUCTION Future world is full of competition, the development of emerging markets, uncertain environment factors, the promotion of technology and the development of trade. Condition for success in this field is taking advantage of the opportunities and embracing the challenges ahead.. For success in organizations, knowledge as an asset must be exchangeable between humans and have the ability to grow. Knowledgeable organizations know that knowledge is an intellectual capital and is the only capital that will change with time. Taking advantage of all intellectual resources in organization can have considerable benefits. Due to the significance of this issue, knowledge management must be evaluated because it makes concepts and procedures clear, creates considerable benefits and enables us to overcome available challenges (Beigy, 2010).Based on the belief in the role of management in the organizational effectiveness, knowledge management measurement is difficult and the relationship between knowledge management processes is not properly investigated ( Wzhen, 2010). While organizational effectiveness is deeply embedded in organizational literature and it is considered as a central theme in all organizational analyses. According to Armstrong, effectiveness is a complicated concept that is defined in different ways and could be measured and evaluated in proportion to each definition (Armstrong, 2007). Since a condition of survival at any organization in today's turbulent and chaotic environment is improving organizational efficiency and effectiveness, it must be determined which organizational

2 factors have the maximum effect on the effectiveness. Given that structure has a considerable impact on the development of organization using its content, dimensional and environmental aspects, it is considered to be one of the factors which enhance the productivity of organization. But as strategy is first formulated in organization and then managers develop structure, appropriate drafting of strategy must not be forgotten in a way that organization can fulfill its main objectives. This necessitates an appropriate culture within the organization that will support the organization in implementing strategies rather than an obstacle to the failure of strategy (Beygi, 2010).Given the above, this study seeks to answer the question whether there is a significant relationship between culture, structure and strategy, by knowledge management, and finally the study attempts to identify a model that investigates the relationship between organizational factors and their effectiveness. Research literature Relationship between knowledge management Knowledge management includes managerial efforts to facilitate the learning activities, creation, storage, classification, distribution, development and spread of knowledge by individuals and groups. Many knowledge management frameworks are specified and three processes that are more important than others include: knowledge creation, knowledge sharing and use of knowledge. Knowledge creation is a process in which knowledge is created through the organization's internal and external resources. Knowledge sharing means knowledge transfer from one person to another and from one group to another. The application of knowledge is the execution of knowledge. Organizational effectiveness is the degree or extent to which organization get close to desired objectives (Wzhen, 2010). Organizational effectiveness is a condition in which organization uses resources to a limited extent and is able to achieve target or targets, according to a set of specified criteria (Daft, 2009). Organizational performance is the extent to which knowledge is managed to help the effectiveness of the organization. Comprehensive knowledge could lead to the development of product effectiveness, reduction of the problems related to collateral and increase in development efficiency. Based on these studies and other investigations, it is supposed that knowledge management positively contribute to organizational effectiveness (Wzhen, 2010). The relationship between culture and knowledge management Organizational culture dates back to the emergence of organization. So far many definitions of corporate culture have proposed. Robbins in his book defines organizational culture: organizational culture determines the procedure to perform one case in organization for employees ( Robbins, 2002). Culture is the same perception of the organization which could be seen in all members of the organization and represents the common and constant characteristics which distinguish one organization from another organization. In the other words, organizational culture determines the social identity of each organization (Davenport, 2000).Organizational culture is essential to a successful management. Culture represents the beliefs, values and social mores and is the observer of the behavior of individuals in the organization. A culture supportive of knowledge management values knowledge and encourages its sharing, creation, and application. Chekell in a study concluded that the biggest obstacle to the creation of knowledge-based organizations lies in culture. In general it can be said that organizational culture with coordination between its different sectors, encouraging innovation and development of individuals' views of environment, supports the process of knowledge management in organization. Organizational culture does not affect organizational culture directly, but it represents itself in shaping the behavior of the organization's members who are present in its behavioral values (Robin, 1990). Knowledge management activities seek to recognize how to attract new domestic and foreign information, and how to exchange and organize them into organizational memory. They form a sensing mechanism where they organization's members convert meanings into data and new information, reconstruct new shared meanings, share replaced meanings and make decisions on activity periods based on their new understanding. The entire process is regulated by organizational culture as a set of values and behavioral norms maintained by members of the organization is used as a filter in the process of meaning and sense generation. The relationship between structure, effectiveness and knowledge management Organizational structure represents the form of duties and activities (De long, 2000). The effectiveness in organizations with a centralized structure and high level decision making is less common (Skiving, 1991). But in the organizations without a centralized structure, organizational structure results in a more effectiveness (Rxckert.1985) A non-centralized structure encourages communications and increases employees' satisfaction and motivation. A centralized structure limits power to organization's high levels, so decreases the employees' opportunity to grow and develop (Malholtra, 2000). The structure can affect the effectiveness of managers through the frequency of information among members, because the frequency of information facilitates knowledge distribution and sharing (Davenport, 1990). The structure can affect knowledge management 356

3 processes through creation of patterns and repeated communications among organization's members and also enhance creativity and effectiveness. Organizational strategy, organizational effectiveness and knowledge management Organizational strategy is long-term plan for organization which helps organization achieve its goals in a competitive environment (Benet, 1999). Organizational strategy is related to organizational performance and it could be said that organizational strategy provides a plan to create and utilize intellectual capital and knowledge in organization (Daft, 2007). Management knowledge defines the effect of strategy through the function of strategic knowledge, the coordination between critical knowledge transfers and such factors can lead to high effectiveness in organization (Wzhen, 2010). The study conceptual model The present study attempts to investigate the effects of organizational culture, structure and strategy on organizational effectiveness by knowledge management in Seven International Transportation Company. Therefore, based on the above-mentioned studies, the study seeks to examine the causal effects of the variables such as culture, structure, strategy, effectiveness and knowledge management by using the proposed model and figure 1 originated from the study hypotheses. Also the study analyzes the conceptual model and study framework in Seven International Transportation Company. Organization al Structure Organizational Culture Knowledge Management Organizational Effectiveness Organizational Strategy Figure1. Source: Wzhen, w., yang, B. Mclean, G.N( linking organizational culture, structure, strategy, and organizational effectiveness; mediating role of knowledge management). The study Hypotheses Based on the pattern presented, the following hypotheses are considered for the present study. Table1. First hypothesis: There is a positive and significant relationship between knowledge management Second hypothesis: There is a positive and significant relationship between organizational culture Third hypothesis: There is a positive and significant relationship between organizational culture and knowledge management Fourth hypothesis: There is a positive and significant relationship between organizational structure and organizational effectiveness Fifth hypothesis: There is a positive and significant relationship between organizational structure and knowledge management Sixth hypothesis: Seventh hypothesis: and knowledge management Eighth hypothesis: and organizational culture Ninth: hypothesis: and organizational structure Tenth hypothesis: There is a positive and significant relationship between organizational structure and culture 357

4 METHODOLOGY As the study aims to investigate the causal relationship between the variables such as culture, structure and strategy on effectiveness by knowledge management, the study is applied in terms of the objective and it is descriptive-correlative in terms of data collection and is based on structural equations. In this study, in order to test the significance of the relationship between questions and variables and the fit of the obtained measurement models and also to analyze confirmatory factor validity, confirmatory factor analysis is used. And finally, in order to study the effects of the study variables, the structural equations model and particularly path analysis method is used using software LIZREL. In the study, the main instrument to gather data is questionnaire, which is specific to the employees and managers of Seven International Transportation Company. Also, in order to assess the validity of the questionnaire, the confidence coefficient was calculated using Cronbakh Alpha method, which was determined above 0.7 for each variable separately. And this indicates the validity of the questionnaire (Taiebei, et al, 2009). The study findings The measurement model: before testing the hypotheses and the study conceptual models, it is necessary to ensure the accuracy of the models for measuring strategy, culture, structure, effectiveness and knowledge management. Therefore, in the next sections of the study, the models for measuring these variables are presented which is performed by confirmatory factor analysis. The confirmatory factor analysis is one of the oldest statistical methods which are applied to investigate the relationship between the hidden variables (the obtained factors) and the observed variables and also the applied questions, and represents the measurement model ( Byrne, 1994). The estimation results (the fit of the model) indicate the suitability of the indices. As LIZREL output calculated k 2 is equal to which is less than 3 compared to freedom degree 160. The degree of RMSEA is 0.062, and the indices NFI, AGFI, GFI are equal to 0.90, 0.91 and 0.92, respectively and totally represent the suitability of the model. Figure2. The variables' confirmatory factor analysis in the standard estimation state (using LISREL) 358

5 Figure3. The variables' confirmatory factor analysis in the significance number state (using LISREL) The study Structural Model Ensuring the accuracy of the variables measurement models, the study hypotheses are considered. The study hypotheses results based on structural model in standard estimation state which measure the effectiveness of the variables, and in the significance number state which considers the significance state between variables and acts as the basis for rejection or confirmation of the significance degree hypotheses, if lies between 1.96 and -1.96, the hypothesis is rejected, otherwise it is confirmed. Figure4. The structural model of hypotheses testing in standard estimation state Figure5. The structural model of hypotheses testing in significance number state The fit of the study final model To investigate the study conceptual model, its suitability and fit must be ensured. In fact, it must be determined whether there is such effect or relationship between variables based on the sample and data obtained by it or not? And the criteria for the model fit must be analyzed by the output of software LIZREL. The following table depicts the most significant the model fit indices and their standard amount and amount obtained by software LIZREL. 359

6 Table2. the Value of Index in the Model Considered 1.76 %00000 %062 %91 %90 %94 %96 %93 Index df 2 / χ P-value RMSEA GFI AGFI NFI CFI RFI The table above indicates that the model has a relatively good fit, i.e. the study data is in agreement with the conceptual model. THE HYPOTHESES RESULTS Considering the above model (in standard state and significance coefficients), the hypotheses results are as follows: Table 3. Rejecting or confirming the study hypotheses The study Hypotheses Significance Confirm or Reject There is a positive and significant relationship between knowledge management 3.20 Confirm There is a positive and significant relationship between organizational culture There is a positive and significant relationship between organizational culture and knowledge management There is a positive and significant relationship between organizational structure There is a positive and significant relationship between organizational structure and knowledge management and knowledge management and organizational culture and organizational structure There is a positive and significant relationship between organizational structure and culture 2.27 Confirm 2.02 Confirm 1.42 reject 2.10 Confirm Reject 3.89 Confirm 4.27 Confirm 6037 Confirm 4.39 Confirm The Degree of Effect./32./20./16./14./20 -./04./36./35./48./35 CONCLUSION Given the results of the first, second and third hypotheses that indicate there is a significant relationship between the variables namely culture, knowledge management and the effectiveness of relationship, firms must emphasize on the necessity of acculturation for employees to establish a knowledge-based culture in organization, and also must underline promoting sharing culture and knowledge maintenance within employees to enhance efficiency level and promote knowledge management through focus on firms by providing necessary instruments. In addition, firms must emphasize on developing a learning culture and following learners' systems in order to institutionalize learner organization. Based on the fourth and fifth hypotheses that structure can partially affect effectiveness, or this effectiveness is facilitated through knowledge management, firms must take advantage of some actions such as the betterment of organizational structure, utilizing employees' ideas and concepts, delegating responsibility to employees and preventing the emergence of inflexible structures. Based on the results from the sixth and seventh hypotheses that indicate strategy partially affects the effectiveness, or such effectiveness is facilitated through knowledge management, it could be concluded that human resources strategy in organization positively affects employees and prevents any conflict in organization. Holding monthly 360

7 brain storm sessions to make employees aware of the mission and the objectives of organization and also the assessment of 360 degree performance in organizations to enhance employees' performance improves organizational effectiveness. Based on the eighth, ninth and tenth which indicate mutual relations and effectiveness between organizational strategy, culture and culture, organization must consider the best strategy to implement knowledge management in proportion to firm's characteristics (structure, culture and strategy) and also to enhance effectiveness. This result is consistent with the results of the study by Wzhen (2010) and indicates the effects of organizational variables on organizational effectiveness, and Malhotra expresses that knowledge management is a process by which organizations become skilled in learning (knowledge internalization), knowledge coding (knowledge externalization), knowledge distribution and transfer. In addition, Sang (2009) believes that knowledge management is a process through which organizations apply their collected information. In addition, in a study by Mohammad Taghi Zadeh and Mojtaba Shakeri Ravesh (2008) on the relationship between organizational infrastructures and management effectiveness, it was concluded that organizational culture, organizational structure and information technology are organizational infrastructures to develop knowledge effectiveness. A study was also conducted by Abdullah Ahmadi and Tahereh Setarg (2007) on the relationship between organizational culture and creativity in Marvdasht secondary schools; the study results indicated that there is a significant relationship between culture and organizational effectiveness. In addition, there is a positive and significant relationship between creativity and organizational effectiveness. Organizational culture and creativity is able to predict organizational effectiveness. Suggestions Given that knowledge integration leads to the developed effectiveness of products and reduces the volume of defective products, it removes the defects of warranties and enhances the effectiveness and development of organization (Tiwana, 2004). An appropriate organizational culture must be promoted, because based on Checkel's calculations, the culture supportive of knowledge values knowledge and encourages its sharing, creation and application. Checkel in his study concluded that the biggest obstacle to create knowledgebased organizations lies in culture. In general, it could be said that organizational culture supports knowledge management process by creating coordination and coherence among different parts of the organization, encouraging innovation and development of individuals' views of environment (Robin, 1990). Therefore, first by developing an organizational culture dependent upon increased discipline and innovation, it is possible to enhance the market effectiveness in agencies and then by creating a structure dependent upon a hierarchical reduction level, decrease in controls, etc., enhanced market effectiveness in agencies (Naseri et al., 2007). REFERENCES Ahmadi A, Setarg T The relationship between organizational culture, creativity in the Marvdasht secondary schools. Journal of Leadership and Educational Management. No. 10. Armstrong M. The human resources strategic management; Translated by Seyed Mohammad Aerabi, Davoud Izadi, Cultural Research Office. Beigy MH MA Thesis (Presenting the model of key success factors to increase organizational creativity and learning in Iran airports). Bennet R, Gabiel H organizational factors and knowledge management with large marketing department: an empirical study. 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