The Influence of Network Form on Inter- organizational Knowledge Transfer Difficulty: Does Form Matter? DSI Conference Jennifer Lewis Priestley Subhashish

The Influence of Network Form on Inter-The Influence of Network Form on Inter-organizational Knowledge Transfer Difficulty: organizational Knowledge Transfer Difficulty:

Does Form Matter?Does Form Matter?

DSI ConferenceDSI Conference

Jennifer Lewis PriestleyJennifer Lewis Priestley

Subhashish SamaddarSubhashish Samaddar

November 23, 2003November 23, 2003

Presentation OutlinePresentation Outline

1.1. Why study knowledge transfer?Why study knowledge transfer?2.2. Network formsNetwork forms3.3. Factors influencing knowledge transfer Factors influencing knowledge transfer 4.4. Proposed modelProposed model5.5. Research Limitations and ImplicationsResearch Limitations and Implications

Why is knowledge important?Why is knowledge important?

Knowledge is a source of Knowledge is a source of competitive advantagecompetitive advantage

“…“…the essence of economic growth…” the essence of economic growth…”

– – Teece (1998)Teece (1998)

“…“…the underpinning of competencies…” (KBV)the underpinning of competencies…” (KBV)

– – Grant (1996)Grant (1996)

“…“…quickly displacing capital and labor as a firm’s basic quickly displacing capital and labor as a firm’s basic economic resource…” economic resource…”

– – Drucker (1995)Drucker (1995)

Why is knowledge Why is knowledge transfer transfer important?important?

Organizations cannot know all that is knowable (TCE)Organizations cannot know all that is knowable (TCE)- Williamson (1973, 1975);- Williamson (1973, 1975);

““Second-hand” knowledge is often cheaper and faster to Second-hand” knowledge is often cheaper and faster to obtain than “first-hand” knowledge;obtain than “first-hand” knowledge;“…“…Factors of production cannot become mobile unless Factors of production cannot become mobile unless they are known…”they are known…”

- Lippman and Rumelt (1982)- Lippman and Rumelt (1982)

Alliances/partnerships and networks provide a channel to Alliances/partnerships and networks provide a channel to access incremental knowledge in an effort to manage access incremental knowledge in an effort to manage environmental uncertaintyenvironmental uncertainty. . – – Madhavan (1998)Madhavan (1998)

Specific examples of knowledge transfer studies Specific examples of knowledge transfer studies within networks:within networks:

Powell et al., 1996 – study of biotech firmsPowell et al., 1996 – study of biotech firms Darr et al., 1995 – study of pizza franchisesDarr et al., 1995 – study of pizza franchises Ingram and Simons, 2002 – study of kibbutzimIngram and Simons, 2002 – study of kibbutzim Postrel, 2002 – recounting of the 1999 Mars Climate OrbiterPostrel, 2002 – recounting of the 1999 Mars Climate Orbiter

Inter-organizational Network FormsInter-organizational Network Forms

NetworkNetworkTypeType

Knowledge Knowledge TransferTransferDifficultyDifficulty

Factors of Factors of KnowledgeKnowledge

TransferTransfer

ScopeLow High

Cen

tral

ity o

f A

utho

rity

High

FF

CC

Compe

tition

High

VV

II



How do each of these specific network types How do each of these specific network types influence knowledge transfer difficulty?influence knowledge transfer difficulty?


TransferTransfer



• Franchise• Value Chain• Innovative• Co-opetive

Factors of Knowledge TransferFactors of Knowledge Transfer

Several factors have been shown in the KM literatureSeveral factors have been shown in the KM literatureto influence knowledge transfer:to influence knowledge transfer:

Absorptive CapacityAbsorptive Capacity“…“…the ability of a firm to recognize the value of new, external the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability as a firm’s its innovative capabilities. We label this capability as a firm’s absorptive capacity.”absorptive capacity.” (Cohen and Levinthal, 1990) (Cohen and Levinthal, 1990)

Causal AmbiguityCausal Ambiguity“…“…ambiguity is an intermediate state between ignorance and risk…the ambiguity is an intermediate state between ignorance and risk…the level of causal ambiguity refers to the number of distributions that are level of causal ambiguity refers to the number of distributions that are not ruled out by one’s knowledge of the situation.”not ruled out by one’s knowledge of the situation.” (Mosakowski, 1997) (Mosakowski, 1997)

Outcome AmbiguityOutcome Ambiguity


Outcome AmbiguityOutcome Ambiguity

““The inability of the knowledge source to identify the possible The inability of the knowledge source to identify the possible outcome associated with knowledge transferoutcome associated with knowledge transfer.” (Samaddar and .” (Samaddar and Priestley, 2003) Priestley, 2003)

Szulanski (1996) identifies “unprovenness” of knowledge as a factor Szulanski (1996) identifies “unprovenness” of knowledge as a factor of knowledge transfer difficulty.of knowledge transfer difficulty.

Simonin (1999), Szulanski (1996) and Hamel (1991) all identified Simonin (1999), Szulanski (1996) and Hamel (1991) all identified different aspects of the relationship between the source and the different aspects of the relationship between the source and the recipient as a factor of knowledge transfer difficulty.recipient as a factor of knowledge transfer difficulty.

Type 1Type 1(Low Outcome Ambiguity)(Low Outcome Ambiguity)Outcome Set: [OOutcome Set: [O11, O, O22, O, O33]]

Type 3Type 3(Med Outcome Ambiguity)(Med Outcome Ambiguity)

Outcome Set: [OOutcome Set: [O11, O, O22, O, O33…O…O∞∞]]

Type 2Type 2(Med Outcome Ambiguity)(Med Outcome Ambiguity)


Type 4Type 4(High Outcome Ambiguity)(High Outcome Ambiguity)


Known Recipient ActionsKnown Recipient ActionsBounded Recipient Action Set:Bounded Recipient Action Set:

[RA[RA11, RA, RA22, RA, RA33]]

Unknown Recipient ActionsUnknown Recipient ActionsUnbounded Recipient Action Set: Unbounded Recipient Action Set:

[RA[RA11, RA, RA22, RA, RA33…RA…RA∞∞]]

Proven KnowledgeProven KnowledgeBounded Knowledge Usage Set: Bounded Knowledge Usage Set:

[KU[KU11, KU, KU22, KU, KU33]]

Unproven KnowledgeUnproven KnowledgeUnbounded Knowledge Usage Set:Unbounded Knowledge Usage Set:

[KU[KU11, KU, KU22, KU, KU33…KU…KU∞∞]]

Outcome Ambiguity Framework:Outcome Ambiguity Framework:


How are each of these factors of knowledge transfer How are each of these factors of knowledge transfer difficulty influenced by network type?difficulty influenced by network type?


TransferTransfer



• Franchise• Value Chain• Innovative• Co-opetive

• Absorptive Capacity• Causal Ambiguity• Outcome Ambiguity


RQ1: What factors influence inter-organizational knowledge transfer RQ1: What factors influence inter-organizational knowledge transfer difficulty?difficulty?

Proposed ModelProposed Model

OutcomeOutcomeAmbiguityAmbiguityOutcomeOutcome

AmbiguityAmbiguity

+

Absorptive Absorptive CapacityCapacity


-

Causal Causal AmbiguityAmbiguity


+KnowledgeKnowledge

TransferTransferDifficultyDifficulty



AmbiguityAmbiguity





ValueValueChainChain

InnovativeInnovative

FranchiseFranchise

Co-opetiveCo-opetive

RQ2: How does network type affect the factors of inter-RQ2: How does network type affect the factors of inter-organizational knowledge transfer difficulty?organizational knowledge transfer difficulty?


AmbiguityAmbiguity

+



-



+KnowledgeKnowledge

TransferTransferDifficultyDifficulty

ValueValueChainChain


FranchiseFranchise



Comprehensive Research Model:Comprehensive Research Model:

FranchiseFranchise InnovativeInnovative Value ChainValue Chain Co-opetiveCo-opetive


H1a – HighH1a – High H2a – LowH2a – Low H3a – LowH3a – Low H4a – HighH4a – High


H1b – LowH1b – Low H2b – HighH2b – High H3b – LowH3b – Low H4b – HighH4b – High

Outcome Outcome AmbiguityAmbiguity

H1c – LowH1c – Low H2c – HighH2c – High H3c – LowH3c – Low H4c – HighH4c – High

Knowledge Knowledge Transfer Transfer DifficultyDifficulty

H1d – LowH1d – Low H2d– MixedH2d– Mixed H3d – LowH3d – Low H4d – HighH4d – High

Proposed Model - HypothesesProposed Model - Hypotheses

Proposed Model – HypothesesProposed Model – Hypotheses

FranchiseFranchise


H1a – HighH1a – High


H1b – LowH1b – Low


H1c – LowH1c – Low


H1d – LowH1d – Low

The Franchise Network will be associated The Franchise Network will be associated with a high state of absorptive capacity.with a high state of absorptive capacity.

The Franchise Network will be associated The Franchise Network will be associated with a low state of causal ambiguity.with a low state of causal ambiguity.

The Franchise Network will be associated The Franchise Network will be associated with a low state of outcome ambiguity.with a low state of outcome ambiguity.

The Franchise Network will be associated The Franchise Network will be associated with low knowledge transfer difficulty.with low knowledge transfer difficulty.

Detailed hypothesis - Detailed hypothesis -




H2a – LowH2a – Low


H2b – HighH2b – High


H2c – HighH2c – High


H2d – MixedH2d – Mixed

The Innovative Network will be associated The Innovative Network will be associated with a low state of absorptive capacity.with a low state of absorptive capacity.

The Innovative Network will be associated The Innovative Network will be associated with a high state of causal ambiguity.with a high state of causal ambiguity.

The Innovative Network will be associated The Innovative Network will be associated with a high state of outcome ambiguity.with a high state of outcome ambiguity.

The Innovative Network will be associated The Innovative Network will be associated with mixed knowledge transfer difficulty.with mixed knowledge transfer difficulty.



Value ChainValue Chain


H3a – LowH3a – Low


H3b – LowH3b – Low


H3c – LowH3c – Low


H3d – LowH3d – Low

The Value Chain Network will be associated The Value Chain Network will be associated with a low state of absorptive capacity.with a low state of absorptive capacity.

The Value Chain Network will be associated The Value Chain Network will be associated with a low state of causal ambiguity.with a low state of causal ambiguity.

The Value Chain Network will be associated The Value Chain Network will be associated with a low state of outcome ambiguity.with a low state of outcome ambiguity.

The Value Chain Network will be associated The Value Chain Network will be associated with low knowledge transfer difficulty.with low knowledge transfer difficulty.





H4a – HighH4a – High


H4b – HighH4b – High


H4c – HighH4c – High


H4d – HighH4d – High

The Co-opetive Network will be associated The Co-opetive Network will be associated with a high state of absorptive capacity.with a high state of absorptive capacity.

The Co-opetive Network will be associated The Co-opetive Network will be associated with a high state of causal ambiguity.with a high state of causal ambiguity.

The Co-opetive Network will be associated The Co-opetive Network will be associated with a high state of outcome ambiguity.with a high state of outcome ambiguity.

The Co-opetive Network will be associated The Co-opetive Network will be associated with high knowledge transfer difficulty.with high knowledge transfer difficulty.


“…“…there is a growing realization that the variables which there is a growing realization that the variables which are most theoretically Interesting are those which are are most theoretically Interesting are those which are least identifiable and measurable.”least identifiable and measurable.”

Spender and Grant (1996)Spender and Grant (1996)

LimitationsLimitations

Data CollectionData Collection

Unit of AnalysisUnit of Analysis

Sample SizeSample Size

ImplicationsImplications

For practice – For practice –

Enable management of organizations currently outside Enable management of organizations currently outside of a network (or considering the formation of a network) of a network (or considering the formation of a network) to determine which form will most effectively support its to determine which form will most effectively support its knowledge-based objectives.knowledge-based objectives.

Enable management of organizations currently operating Enable management of organizations currently operating within a network to determine how they can manage within a network to determine how they can manage their relationships within the network to minimize their relationships within the network to minimize knowledge transfer difficulty.knowledge transfer difficulty.

ImplicationsImplications

For Research – For Research –

Introduces a new factor of inter-organizational Introduces a new factor of inter-organizational knowledge transfer difficulty for further research and knowledge transfer difficulty for further research and refinement (outcome ambiguity).refinement (outcome ambiguity).

Introduces a unique framework through which to address Introduces a unique framework through which to address the issues associated with inter-organizational the issues associated with inter-organizational knowledge transfer difficulty. Further research could knowledge transfer difficulty. Further research could pursue a network-oriented focus or a factor-oriented pursue a network-oriented focus or a factor-oriented focus.focus.

Questions? Comments? Discussion?Questions? Comments? Discussion?

Documents

The Influence of Network Form on Inter- organizational Knowledge Transfer Difficulty: Does Form Matter? DSI Conference Jennifer Lewis Priestley Subhashish