The Influence of Network Form on Interorganizational Knowledge Transfer Difficulty: Does Form Matter

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The Influence of Network Form on
Inter-organizational Knowledge Transfer
Difficulty Does Form Matter?

• DSI Conference
• Jennifer Lewis Priestley
• Subhashish Samaddar
• November 23, 2003

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Presentation Outline

• Why study knowledge transfer?
• Network forms
• Factors influencing knowledge transfer
• Proposed model
• Research Limitations and Implications

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Why is knowledge important?

• Knowledge is a source of competitive advantage
• the essence of economic growth
• Teece (1998)
• the underpinning of competencies (KBV)
• Grant (1996)
• quickly displacing capital and labor as a
  firms basic economic resource
• Drucker (1995)

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Why is knowledge transfer important?

• Organizations cannot know all that is knowable
  (TCE)
• - Williamson (1973, 1975)
• Second-hand knowledge is often cheaper and
  faster to obtain than first-hand knowledge
• Factors of production cannot become mobile
  unless they are known
• - Lippman and Rumelt (1982)

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Inter-organizational Network Forms

• Specific examples of knowledge transfer studies
  within networks
• Powell et al., 1996 study of biotech firms
• Darr et al., 1995 study of pizza franchises
• Ingram and Simons, 2002 study of kibbutzim
• Postrel, 2002 recounting of the 1999 Mars
  Climate Orbiter

Factors of Knowledge Transfer
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Inter-organizational Network Forms
F
V
C
I
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Inter-organizational Network Forms
How do each of these specific network types
influence knowledge transfer difficulty?
Factors of Knowledge Transfer
Network Type
Knowledge Transfer Difficulty

• Franchise
• Value Chain
• Innovative
• Co-opetive

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Factors of Knowledge Transfer
Several factors have been shown in the KM
literature to influence knowledge transfer

• Absorptive Capacity
• the ability of a firm to recognize the value of
  new, external information, assimilate it, and
  apply it to commercial ends is critical to its
  innovative capabilities. We label this
  capability as a firms absorptive capacity.
  (Cohen and Levinthal, 1990)
• Causal Ambiguity
• ambiguity is an intermediate state between
  ignorance and riskthe level of causal ambiguity
  refers to the number of distributions that are
  not ruled out by ones knowledge of the
  situation. (Mosakowski, 1997)
• Outcome Ambiguity

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Factors of Knowledge Transfer
Outcome Ambiguity

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

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

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

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Factors of Knowledge Transfer
Outcome Ambiguity Framework
Type 3 (Med Outcome Ambiguity) Outcome Set O1,
O2, O3O8
Type 1 (Low Outcome Ambiguity) Outcome Set O1,
O2, O3
Type 2 (Med Outcome Ambiguity) Outcome Set O1,
O2, O3O8
Type 4 (High Outcome Ambiguity) Outcome Set O1,
O2, O3O8
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Factors of Knowledge Transfer
How are each of these factors of knowledge
transfer difficulty influenced by network type?
Factors of Knowledge Transfer
Network Type
Knowledge Transfer Difficulty

• Absorptive Capacity
• Causal Ambiguity
• Outcome Ambiguity

• Franchise
• Value Chain
• Innovative
• Co-opetive

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Proposed Model

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

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Proposed Model
RQ2 How does network type affect the factors of
inter-organizational knowledge transfer
difficulty?
Franchise
Absorptive Capacity
Value Chain
Causal Ambiguity
Innovative
Outcome Ambiguity
Co-opetive
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Proposed Model
Comprehensive Research Model
Franchise
Value Chain
Innovative
Co-opetive
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Proposed Model - Hypotheses
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Proposed Model Hypotheses
Detailed hypothesis -
The Franchise Network will be associated with a
high state of absorptive capacity.
The Franchise Network will be associated with a
low state of causal ambiguity.
The Franchise Network will be associated with a
low state of outcome ambiguity.
The Franchise Network will be associated with
low knowledge transfer difficulty.
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Proposed Model Hypotheses
Detailed hypothesis -
The Innovative Network will be associated with a
low state of absorptive capacity.
The Innovative Network will be associated with a
high state of causal ambiguity.
The Innovative Network will be associated with a
high state of outcome ambiguity.
The Innovative Network will be associated with
mixed knowledge transfer difficulty.
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Proposed Model Hypotheses
Detailed hypothesis -
The Value Chain Network will be associated with
a low state of absorptive capacity.
The Value Chain Network will be associated with
a low state of causal ambiguity.
The Value Chain Network will be associated with
a low state of outcome ambiguity.
The Value Chain Network will be associated with
low knowledge transfer difficulty.
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Proposed Model Hypotheses
Detailed hypothesis -
The Co-opetive Network will be associated with a
high state of absorptive capacity.
The Co-opetive Network will be associated with a
high state of causal ambiguity.
The Co-opetive Network will be associated with a
high state of outcome ambiguity.
The Co-opetive Network will be associated with
high knowledge transfer difficulty.
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there is a growing realization that the
variables which are most theoretically
Interesting are those which are least
identifiable and measurable. Spender and Grant
(1996)
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Limitations

• Data Collection
• Unit of Analysis
• Sample Size

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Implications

• For practice
• Enable management of organizations currently
  outside of a network (or considering the
  formation of a network) to determine which form
  will most effectively support its knowledge-based
  objectives.
• Enable management of organizations currently
  operating within a network to determine how they
  can manage their relationships within the network
  to minimize knowledge transfer difficulty.

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Implications

• For Research
• Introduces a new factor of inter-organizational
  knowledge transfer difficulty for further
  research and refinement (outcome ambiguity).
• Introduces a unique framework through which to
  address the issues associated with
  inter-organizational knowledge transfer
  difficulty. Further research could pursue a
  network-oriented focus or a factor-oriented focus.

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Questions? Comments? Discussion?