It is wondered how traditional medical industry responds to the information era with new knowledge economy. In fact, medical industry is a knowledge-intensive and human-oriented service industry. The interaction among professional staff at various working systems in hospitals, patients visiting hospitals daily, and the upstream and downstream suppliers for medical activities forms an extremely useful knowledge database. Although the application of information technology is not the whole definition of knowledge management, the entire medical industry, based on other traditional factors, is not ranked on the top for the utilization of modern information technology, compared to other industries. For this reason, establishing a special knowledge management environment with the knowledge-intensive and human-oriented characteristics of medical industry is a worthy goal. Aiming at primary hospitals in Shanghai, the management level, physicians, and employees are distributed 360 copies of questionnaire. Total 288 valid copies are retrieved, with the retrieval rate 80%. The research results summarize the positive relations between 1.leadership behavior and knowledge management, 2.knowledge management and organization innovation, and 3.leadership behavior and organization innovation. Finally, suggestions are proposed, expecting to have leaders in medical industry guide the organization to become a self-learning organism and, meanwhile, practice knowledge management in the organization to digitalize the generation, storage, and expansion process of knowledge within the organization
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