Decentralization, Social Networks, and Organizational Learning
AbstractResearch on the exploration and exploitation of knowledge in organizations suggests that the autonomy of subsidiaries or units encourages innovation. However, that same autonomy potentially discourages the exploitation of innovations through inter-unit communication – suggesting a tradeoff between innovation, associated with exploration, and communication, associated with exploitation. Analyzing data on the operational decisions of captains in the English East India Company, we find that high unit autonomy encourages the transfer of information via social networks, whereas centralization depresses the use of social networks. Further, the information transferred via social networks does make its way into the formal knowledge base of the firm.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 12-01.
Date of creation: 2012
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Web page: http://www.druid.dk/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-CSE-2012-03-21 (Economics of Strategic Management)
- NEP-ICT-2012-03-21 (Information & Communication Technologies)
- NEP-KNM-2012-03-21 (Knowledge Management & Knowledge Economy)
- NEP-NET-2012-03-21 (Network Economics)
- NEP-SOC-2012-03-21 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carlos, Ann M, 1992. "Principal-Agent Problems in Early Trading Companies: A Tale of Two Firms," American Economic Review, American Economic Association, vol. 82(2), pages 140-45, May.
- Hejeebu, Santhi, 2005. "Contract Enforcement in the English East India Company," The Journal of Economic History, Cambridge University Press, vol. 65(02), pages 496-523, June.
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