THE ROLE AND IMPORTANCE OF EMOTIONAL INTELLIGENCE IN

KNOWLEDGE MANAGEMENT
Svetlana Lazovic
International School for Social and Business Studies, Slovenia
lazovicsvetlana@gmail.com
Abstract:
Knowledge management is the main component of knowledge-based society. Learning
organisations are aware of the potential that lies in human resources, and are prone to
developing new concepts of leadership, where hierarchy and pyramid structured decision
making no longer play the main role. The new concept is built on partnership between
professionals from different sectors of the organisation. Partnership alliances depend on
quality of human relations. We suggest that emotional intelligence enhanced with new
concepts of leadership increases generating and transfer of knowledge. The study has a
qualitative approach taken through interviews that were conducted with top management in
order to investigate the role of emotional intelligence and its impact on management in
correlation with sharing knowledge. The findings confirmed our two hypotheses, since
research has shown how the leadership strategy reflects on input of employees, and the way
resulting in stimulation or discouragement of the transfer of knowledge in the organisation.
Keywords: knowledge, emotional intelligence, leadership, human resources.

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1. INTRODUCTION
The purpose of this paper is to reflect on new management paradigms that shape the
development of knowledge-based organisations. Modern ways of doing business are changing
considerably the original structure which was initially based solely on an authoritarian model
of leadership. Experts believe that integration of personal potential of an individual plays a
significant role in developing a successful management style. Referring to human relations,
success depends on recognition and awareness of our emotional reactions towards obstacles
and conflict situations. The intensity of conflicts reflects on organisation climate within the
company, and the quality of relations between individuals. In this paper, we will identify and
examine dimensions of emotional intelligence, and its impact on leadership and creative
decision-making, while trying to encourage the Board of Executives for using more
innovative decisions concerning human resource management. Emotional intelligence serves
as an added value in leading people. Emotionally intelligent abilities are not innate gifts, but
learned skills, and each of them contributes in its own way to a more effective management.
In the theoretical part of this paper, a descriptive method will be used to define the basic
concepts within the thesis, namely leadership, emotional intelligence and knowledge
management. The empirical part is based on a qualitative research; whereby, the research
instrument is presented through semi-structured interviews. The analysis will be based on
interviews conducted with ten senior managers, of which seven will be male and three female,
all employed with a small to medium-sized business organisations. Throughout this paper, we
underline that creating added value among employees, which results in positive stimulation of
their potential, is equivalent to approximation of the companys vision to personal values of
employees.

2. EMOTIONAL INTELLIGENCE AND LEADERSHIP

Emotional intelligence bears an important impact on self-development of the manager and his
leadership qualities. Practicing activities that support EI behavior illuminates positive effects
that can be observed and measured by higher productivity. Its impact is visible in building
positive relations and gaining emotional commitment of employees. At a higher level this
strengthens organisational culture, sharpens its resilience and stretches its flexibility, both in
the long run lead to greater competitive advantage in the market. Empathic communication
between CEOs and employees develops a culture of trust that increases synergy among team
members. Synergy stimulates employees creativity, which is essential in developing new
solutions and forming innovative responds to the increasingly complex demands of learning
society.
2.1. Developing leadership skills
Effective leadership requires strong engagement and all-embracing commitment for
developing personal potentials of an individual (leader). The process requires a great deal of
self-discipline, hard work, effort, and continuous learning. Seeking knowledge is a lifelong
journey, and a successful leader is aware of it at all times. By developing his/her inner
potentials and transforming them into personality traits, he/she sets a mile stone for his/her
career development. His/her input in leadership strategy reflects his/her authentic power based
on his/her integrity. Manager's integrity is crucial when addressing the organisational culture
and stimulating the emotional potential of the organisation.

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Kyle (2000, p. xi) defines the primary goal of efficient leadership as achieving results,
nurturing the team and increasing competence of all team members. He believes that the
leader's role is to create circumstances which allow the team members to demonstrate their
knowledge and skills. Achieving desired state is conducted by nurturing shared values,
integration of intentions of an individual with the intentions of the organisation, and creation
of a shared vision. Every manager who desires to become a great leader should impersonate
active and permanent dedication to understanding the extension between assigned positional
power, and his/her own personal power. This connection forms a context which applies
feedback information regarding emotional commitment of employees, their orientation
towards the common goal and their willingness for behavioural change. A manager who does
not pay enough attention to his/her leadership potential is able to achieve only short-term
results, otherwise he/she is not able to establish a relationship that encourages employee's
innovation, creativity and emotional affiliation to the organisation. In other words, the leader
will operate his/her team members, but will not lead them.
2.2. Emotional intelligence and its impact on leadership skills
Joseph LeDoux, neurologist and researcher at the Centre for Neurological Sciences at New
York, refuted traditional views of neurology on the operation of our limbic brain. In his
discoveries, he pointed out the complexity of our emotional mind. His research represents a
major turning point in understanding the emotional life, as there were for the first time
explained ways in which emotions literally bypass neocortex1 (Goleman, 1997, p. 3138).
Based on LeDoux's analyses of his research data, Daniel Goleman formed a model of
emotional intelligence that connects individual's set of skills powered by the brain dynamics
in the background with one's reactions. He divided emotionally intelligent skills into two
groups; the first group indicates abilities for successful management of ourselves as
individuals, while the second group determinates how receptive we are to the guidance of
others. His findings are based on scientific disciplines that study human complexity, such as
biopsychology and neurology. According to his conclusions, the oldest centres of the human
brain, those responsible for feelings, are also responsible for managing ourselves and our
social skills. These are skills that are contained in the genetic development of people and
serve for the survival and adaptation of mankind. The emotional part of the brain perceives
the world differently than the reasonable part. This conclusion brings new perspective on an
enormous gap between cognition and emotion. Some skills are just cognitive, such as
analytical thinking and technical skills. Some of them are a mixture of combined parts
between cognition and emotion; this is called emotional intelligence (Goleman, 2001, p. 18
36).
The core of emotional intelligence is based on adaptation of creating conscious and intelligent
actions regarding our own emotional responses as well as managing other people's reactions
to an emotionally charged situation. In order to be able to successfully manage all these
reactions, we first need to acknowledge the emotional state that we find ourselves in, and
subsequently recognize its impact on our behavioural patterns. For adjusting, or better yet
transforming those patterns, we must use our conscious mind while evaluating if we are
1

LeDoux discovered how sensory signals that are coming from our eyes or ears must first travel into the specific
part of our brain the thalamus. Thalamus sends impulses from all sensory systems into the cerebral cortex, and
from there through only one synapse passes into the amygdala, the centre of our emotional reactions. Next signal
is directed into the neocortex, our reasoning mind. With such a diversification of signals, amygdala may overtake
neocortex's reaction. Neocortex must first ruminate on the information before it can finally create a response.
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addressing ourselves and others in a respectful manner. Respect is the cornerstone of any nonviolent and effective communication.
Development of emotional intelligence and illumination of the important insights that we
benefit from, is not meant to be magnified to the extent that overshadows the importance of
intellectual intelligence. We are simply underlining the importance of making a connection
between our mind and our emotional triggers in a way that they do not dominate us. The
findings that focus on managing our emotional responses suggest the possibility of building a
more effective working environment. We wish to emphasize that the concept of leadership
and the concept of emotional intelligence may not exist in isolation; anyone who wants to
become a successful manager/leader, must learn at first how to manage/lead himself/herself,
and then set an example in leading others successfully. Emotional intelligence can therefore
be defined as the ability to recognize and adjust our emotions that trigger our responses with
certain situations or people. We can learn how to gain control over our responses and actively
participate in forming our social skills. Emotional intelligence the ability to manage
ourselves and our relationships consists of four fundamental capabilities: self-awareness,
self-management, social awareness, and social skill. Each capability, in turn, is composed of
specific sets of competencies (Goleman, Boyatziss & McKee, 2002, 263265).
Table 1: The impact of emotional intelligence in personality, and leadership skills
DEVELOPMENT OF PERSONAL TRAITS
Self-awareness
Emotional self-awareness:
the ability to read and understand your emotions
as well as recognize their impact on work
performance, relationships.
Accurate self-assessment:
a realistic evaluation of your strengths and
limitations.
Self-confidence:
a strong and positive sense of self-worth.

DEVELOPMENT OF SOCIAL SKILLS

Social awareness
Empathy: skill at sensing other people's
emotions, understanding their perspective,
and taking an active interest in their
concerns.
Organisational awareness: the ability to read
the currents of organisational life, build
decision networks, and navigate politics.
Service orientation: the ability to recognize
and meet customers' needs.

Self-management
Self-control: the ability to keep disruptive
emotions and impulses under control.
Trustworthiness: a consistent display of
honesty and integrity.
Conscientiousness: the ability to manage
yourself and your responsibility.
Adaptability: skill at adjusting to changing
situations and overcoming obstacles.
Achievement orientation: the drive to meet an
internal standard of excellence.
Initiative: a readiness to seize opportunities.

Social skill
Visionary leadership: the ability to take
charge and inspire with a compelling vision.
Influence: the ability to wield a range of
persuasive tactics.
Developing others: the propensity to bolster
the abilities of others through feedback and
guidance.
Communication: skill at listening and at
sending clear, convincing and well-tuned
messages.
Change catalyst: proficiency in initiating
new ideas and leading people in a new
direction.
Conflict management: the ability to deescalate disagreements and orchestrate
resolutions.
Building bonds: proficiency at cultivating
and maintaining a web of relationships.
Teamwork and collaboration: competence at
promoting cooperation and building teams.
Source: Adapted from Goleman, Boyatziss and McKee, 2002, p. 265.

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2.3. Creating emotionally intelligent teams

Goleman et al. (2002, p. 39) state that employees under the leadership of emotionally
intelligent individuals are more prone to give mutual support to each other. Their participation
is evident in an exchange of ideas, transfer of knowledge, and taking responsibility for
making and carrying out joint tasks. Emotionally intelligent leader will also be able to
spontaneously develop and create emotionally intelligent teams. Goleman et al. (2002, p. 199)
describe emotionally intelligent teams with the same characteristics as individuals, as for EI
skills are interrelated and cumulated in a group. Self-awareness of team members and parallel
recognition of needs and moods bring more empathy into the work environment. On a team
level, empathy is the basis for building effective relationships within the team as well as with
other parts of the organisation. Therefore, leaders who are able to develop empathy and other
important social skills, must bound themselves to forming emotionally intelligent
organisations. Employees should be given the opportunity to develop their potentials and
participate in forming organisational integrity. Managers on the other hand, should find
appropriate ways to transform organisations vision into actions that support emotionally
intelligent practice. On a strategic level, this reflects measures that create systems, where
rules, statutes and personnel practice in human resource management are aligned with the
desired objectives. Goleman et al. (2002, p. 210) indicate triple benefits from creating
emotionally intelligent organisation for CEOs. Firstly, open conversation and honest
assessment of behavioural and emotional aspects of an organisational culture and leadership
style create new, healthy relations among employees. Secondly, new process reflects in
generating new habits: when employees see the behavioural change in head managers, they
are more likely to verbalize their needs and develop a more respectful attitude towards their
co-workers, since they try to replicate the behaviour from their team leaders. And thirdly, if a
head manager is someone people can look up to, a person of integrity, all employees,
especially those in lower positions, are more willing to take risks.

3. THE CORRELATION BETWEEN EI LEADERSHIP SKILLS AND

KNOWLEDGE MANAGEMENT
Knowledge management is the centre of all strategic planning on how to increase the value of
human resources while trying to conduct the most effective form of stimulating their
potential. From a managers perspective, knowledge, its effective use, and integration in all
pores of the work process stand for a corporal value that must be nurtured and respected.
Effective leadership and management skills that reflect in a successful stimulation of
generating new knowledge, transfer of knowledge, and other knowledge-based processes
delineate the company as a learning organisation. Knowledge, like innovation and creativity,
needs to be encouraged and stimulated in appropriate ways, it can not be produced on
command. Commitment to acquiring new knowledge is related to the quality of interpersonal
relations. Those relations rely to a great extent on emotional intelligence of key individuals.
They create synergistic effects at all levels of the organisation, which leads to enrichment of
intellectual capital, while allowing a transparent flow and transfer of knowledge through
different sectors of the organisation.
3.1. Knowledge management
Knowledge management is by definition part of the overall management process that focuses
on systematic analysis, acquirement, creation, development, storage and use of knowledge. Its
main purpose is to maximize human capital to the extent where we can transform it into

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structural capital, a part of intellectual property which allows organisations to develop

competitive advantages and efficiently reach goals (Moina, 2006, p. 131).
Intellectual capital can be divided into two crucial segments which are also very important for
understanding the meaning of knowledge. First segment belongs to employees, and after
finishing work and leaving the office, they take it home with them. We identify it as human
capital. Second part of this segment belongs to the organisation and remains there even after
employees leave work. We refer to it as structural capital. Therefore, we can conclude that
knowledge of employees presents only a part of the entire intellectual capital and overall
knowledge, considering a larger perspective (Sitar, 2006, p. 6768).
According to Sitar (2006, p. 6768), human capital can be further characterized as employees
competencies, their attitude towards work and intellectual flexibility. Competencies reflect the
understanding and use of knowledge, both theoretical and academic, corresponding to the
level of individuals education as well as learned skills practical knowledge, gained by
training or learned and obtained by experience; this also includes talents of an individual.
Attitude towards work mainly depends on personal traits of each individual and represents the
creation of added value through work motivation and testing of employees responses to new
circumstances, including behavioural reactions and tendency to stay positive in terms of
optimism and enthusiasm. Intellectual flexibility reflects in ability to transfer knowledge from
one situation to another, the ability to integrate skills, to provide constant development of
knowledge, the ability to be innovative and to transform ideas into products and services all
this can be understood as part of human capital.
The definitions above imply the importance of creating conditions for effective use of
knowledge management. The responsibility for creating such circumstances lies with the
CEOs, while the co-responsibility lies with the employees engagement to the transfer of
knowledge. Terms for creating added value depend on stimulation of acquiring knowledge
and circumstances that integrate knowledge into the corporal strategy along with the work
process itself. All requirements must be fulfilled; knowledge management should summarize
all aspects of operation, which shape and support the core strategy of the organisation.
3.2. Platform for an effective transform of knowledge: creating synergy effects
A simple definition of synergy insinuates the state in which two or more things working
together in a particularly fruitful way produce an effect greater than the sum of their
individual effects. The definition can also be interpreted as the whole is greater than the sum
of its parts. The description points out the importance of relations between different parts,
which are an important component of the total. Those relationships present a valuable
resource for catalysing and strengthening as well as encouraging the operation of each part.
Synergy is therefore the essence of successful management, for it is activating, releasing and
combining creative forces of employees.
Dziechciarz (2003, p. 288) believes that a successful synergy management performance
requires a lot of practice in managing leader's emotions and inner views. We highlighted some
of the main components of this process. Managers performance is the key to success, because
there is a close correlation between his/her personality and further business development.
His/her main concern should be focused on building trust among him/her and his/her team
members, by doing so, he/she is maintaining his/her authority. The emotional potential of the
leader should serve as a security card for making efforts. Maintenance of systematic

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implementation of activities which build high level of motivation and self-assessment of team
members is emphasized, as well as development of abilities that determine priorities with
ensuring the implementation of everyday tasks and combining them with corporal strategy.
Training in communication techniques must also not be overlooked.
Moina (2006, p. 137138) states the key ingredients for conducting a successful, selflearning organisation. An active leader, who enables to himself/herself, employees and
organisation a continuous development by constant investment in his/her personal and
professional engagement. Positive work environment stimulates employees' striving for
achieving organisational goals. Opportunity for high performance, as managers must make
every effort for delivering all means (resources, labour conditions) to employees, which
derive with new solutions and correspond to changes. Promotion of gaining new knowledge
and personal development requires constant attention to the development of individuals and
teams. Capacity and willingness to understand people with whom we work, a leader must
carefully study the behaviour of his/her team members. Their performance at work depends
on their personal values. Therefore, a leader should be someone with developed EI skills, who
can successfully lead others and himself/herself. Responsibility for informing the team,
transfer of information in a manner that best suits his/her colleagues (written or oral). Getting
feedback from colleagues and transforming it into self-improving tools; focusing on
understanding of yourself and employees, considering both, strengths and weaknesses.
Removing obstacles and destructive habits of employees any time and anywhere. Treating
employees as colleagues rather than subordinates. It is aimed to build partnership relations
based on equivalence.
EI leadership is a foundation for performing synergy-oriented management. Furthermore, this
encourages conversion of implicit knowledge on an individual level into explicit knowledge,
accessible to everyone. Implicit knowledge, that can not or will not be converted into explicit
knowledge, does not bear the value of usefulness. Self-awareness, an element of emotional
intelligence, is an important cognitive process which points us into direction of revealing
hidden, internal knowledge. The externalization of knowledge may also indirectly influence
the negative attitudes and behavioural patterns of management and employees. Only quality
interpersonal relations constitute a fertile ground for effective knowledge transfer.
3.3. Summary of the interviews conducted with ten head managers
The empirical part consists of a qualitative research focusing on the role and importance of
emotional intelligence in management skills. We were trying to discover how integrating the
emotional potential of employees benefits the management process, improves the functioning
of the knowledge management and thus result in a more efficient and profitable management
of human resources. We were particularly interested in performing knowledge management
solutions and how this is reflected through organisations basic management policies. We also
dealt with the role of emotions and their influence on the leadership strategy; whether they
reflect the managers creativity in the decision-making process and concern for efficient
transfer of knowledge and thus lead to added value creation.
In the scope of conducting semi-structured interviews with key management personnel from
ten business organisations, managers were asked a set of twenty-nine questions that were
divided into three categories: the first set of questions referred to general information about
the interviewee; the second set of questions focused on the management of intellectual capital,
and the third set of questions reflected the integration of emotions in the leadership strategy.

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The field research served as a primary source for our study. A descriptive method and
subsequent analysis (desk research) led us to key findings and conclusions. Analytic induction
was used to determine how the studied areas are related to each other (Malnar, 1999/2000, p.
3).
The interviews provided us with a sufficient representative sample, together with some
additional insights. Semi-structured interviews are mainly focused on the quality of
interaction between the interviewee and the researcher, while still allowing open responses.
Interview location and time were arranged in advance; and each interview was held
individually. Interviews were conducted with ten leading managers employed with
commercial organisations in October 2011.
The survey results indicate the distinction between professional knowledge and leadership
skills of line managers. According to our respondents the latter depend on individual's
personality and their level of emotional intelligence. They reflect on competencies, such as
emotional self-awareness, the ability to successfully resolve conflicts, a high level of selfconfidence, transparency and leadership by example. Emotional self-awareness gives
managers better possibilities for understanding their own emotional dynamics. This
knowledge also helps them to regulate group emotions inside the team and directly affect their
productivity. Ability to successfully resolve conflicts reflects in empathic communication
which provides a deeper insight into the emotional background which led to a conflict
situation in the first place. This creates conditions for smoother transfer of knowledge.
Self-confidence shows the susceptibility for receiving feedback information and accurate
evaluation of individuals strengths and weaknesses. It reflects clear decision-making while
evaluating complex situations. Transparency allows line managers to act in accordance with
their integrity. Managers integrity presents a foundation for respect and inspiration of
employees. Inspiration stimulates the teams creativity. Leadership by example inspires trust,
a sense of belonging and self-confidence. This strengthens the desire to acquire new
knowledge, which is reflected in the professional development of employees. Middle
management is the first membrane through whom knowledge is transmitted, therefore it is
essential that all managers operating at this level understand the importance of sharing
knowledge. Their role must be primarily focused on leading the team members in a manner
that stimulates them to acquire and share knowledge. The problem arises with non-functional
division of tasks and responsibilities among line managers or when the psychological contract
(an agreement about expectations and obligations for both sides involved) is not enough
transparent. This causes disruption and blockages in communication, thereby artificially
interrupts transmission of the vision to run-levels of the organisation. Another cause for this is
poor understanding of the common objectives reflecting in weak relationships in general; this
additionally promotes competitive behaviour and creates conflicts. Synergistic effects and
added value of all team members may be presented only in cohesive groups.
We find that managers in general have more than enough of expert knowledge, however they
lack of leadership skills. Most of them acknowledge and recognize the role of emotions and
use it for a better approach to resolving conflicts. However, in this area there are still
remaining untapped reserves, suggesting the importance of systematic development of
emotional intelligence. There is a lack of proactive thinking in ways that emphasize the
emotional potential of employees and their emotional affiliation. Mangers should practice
synergy-oriented management and put more effort into stimulating the added value of each
individual. Top management must oblige to create synergy effects, which resolve in winwin
situations, forming positive outcome for all parties involved. Emotional intelligence is

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certainly a necessary foundation for contributing to effective management, as the leader with
developed EI skills achieves better results, as his/her teams performance is measured with
higher productivity and finally he/she has allies on both sides; with the employees as well as
the CEOs.

4. CONCLUSIONS
The main objective of this study was to outline new dimensions of leadership practice, which
incorporate elements of emotional intelligence in order to strengthen mutual relations and
employee loyalty. The analysis provided evidence that this creates an organisational culture,
which is based on knowledge and trust and which allows and encourages knowledge sharing
among employees. Top management is responsible for creation of companys culture,
therefore their strategy must not be focused on retention of knowledge by individuals who
feel threatened and consequently have low level of confidence. The primary task of all line
managers focuses on promoting the emotional potential of employees, whereby each
participant provides a unique contribution to overall team performance in accordance with its
capabilities. This promotes synergy instead of leading to conflicts and competitive behavior.
The survey also indicates the importance of developing leadership competencies, since all line
managers must be able to recognize the potentials and limitations of their team members,
which could then be systematically developed in the areas, where such progress is needed.
Our overall conclusion states, that emotional intelligence, which starts on top with the Head
managers and CEOs and operates throughout the company, affects all levels of the
organisation. Obtaining employee commitment to achieve common objectives remains an art
of those managers who have internalized the desire to continuously develop their leadership
potential and create synergistic effects that can be noticed and measured in the entire
organisation.

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