Knowledge Management During Organizational Crisis: The Influence of Leadership

Abstract

This qualitative case study investigates how leadership influences knowledge management (KM) and organizational learning (OL) within a Swedish manufacturing organization facing economic pressure. In an increasingly volatile environment, maintaining knowledge continuity is essential for being competitive and organizational resilient. Data were collected through 27 semi-structured interviews with 31 participants and then analyzed using thematic analysis. The study shows the importance of leadership styles and the leadership's ability to understand the organization from a holistic perspective as well as the digital maturity of the company. The results reveal a significant loss of knowledge resulting from downsizing in order to manage economic pressure, specifically regarding critical tacit knowledge described as "fingertip feeling". This personal, intuitive expertise is vital for navigating production variables and maintaining an old machine park that relies on specialized in-house competence. This means that even if workforce downsizing may be effective in the short-term for managing economic pressure, in the long-term it likely results in critical (tacit) knowledge loss and hence have a negative impact on effectiveness and competitiveness. The study finds that an authoritarian, top-down leadership style acts as a primary barrier to a healthy knowledge culture. Furthermore, it revealed that a lack of transparency regarding major leaderships decisions fosters a culture of silence. The study also revealed a digitalization maturity gap where leadership-driven tools are viewed as administrative burdens due to low digital maturity and a preference for analog methods suited to situated practice. Organizational learning is further hindered because employee improvement initiatives often run out in the sand due to a lack of systematic follow-up and structured feedback loops. The study confirms that leadership is the primary driver for building a culture of continuous learning. To maintain competitiveness and resilience during crises, leadership needs to adopt a holistic perspective that values tacit knowledge and organizational learning. Failing to integrate KM and OL into daily work processes directly compromises long-term organizational memory and the ability to adapt to adverse events.