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Organizational Knowledge and Innovation in Business Services

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  • Leiponen, Aija
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    Abstract

    This study builds a typology of organizational knowledge in business services and empirically examines the effects of knowledge on innovation performance. We suggest that firms differ with respect to their knowledge creation approaches and that these approaches have implications for firm performance in terms of innovation success. A conceptual framework of knowledge assets with degrees of tacitness and collectiveness as the principal axes is used to ground the empirical analysis. We find that innovation in business services is associated with both tacit and explicit collective knowledge, and with explicit individual knowledge. In contrast, relying solely on tacit knowledge held by individuals may hamper innovation. These empirical results shed new light on the debates in organization studies concerning the strategic effects of tacitness and collectiveness of knowledge: Innovation benefits may be gained from codifying knowledge and making it appropriable at the collective level, as opposed to the individual one. Additionally, our results indicate that tacit collective knowledge is more closely associated with new service introductions while explicit collective knowledge is associated with service improvements. In other words, tacit collective knowledge may be conducive to significant departures from existing capabilities and activities while explicit collective knowledge is conducive to incremental improvements. The firm’s knowledge creation approaches thus need to be aligned with its service strategy.

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    File URL: http://purl.umn.edu/127228
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    Bibliographic Info

    Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127228.

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    Date of creation: Jul 2003
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    Handle: RePEc:ags:cudawp:127228

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    Keywords: Organizational knowledge; innovation; business services; supply relationships; Industrial Organization;

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    1. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 24(4), pages 625-645, December.
    2. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    3. Creplet, F. & Dupouet, O. & Kern, F. & Mehmanpazir, B. & Munier, F., 2001. "Consultants and experts in management consulting firms," Research Policy, Elsevier, vol. 30(9), pages 1517-1535, December.
    4. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December.
    5. Jacques Mairesse & Pierre Mohnen, 2002. "Accounting for Innovation and Measuring Innovativeness: An Illustrative Framework and an Application," American Economic Review, American Economic Association, vol. 92(2), pages 226-230, May.
    6. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    7. Teece, David J, 1977. "Technology Transfer by Multinational Firms: The Resource Cost of Transferring Technological Know-how," Economic Journal, Royal Economic Society, vol. 87(346), pages 242-61, June.
    8. Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
    9. Helfat, C.E. & Raubitschek, R.S., 2000. "Product Sequencing: Co-Evolution of Knowledge, Capabilities and Products," Papers 00-1, U.S. Department of Justice - Antitrust Division.
    10. Fleming, Lee & Sorenson, Olav, 2001. "Technology as a complex adaptive system: evidence from patent data," Research Policy, Elsevier, vol. 30(7), pages 1019-1039, August.
    11. Johan Hauknes, . "Services in Innovation – Innovation in Services," STEP Report series 199813, The STEP Group, Studies in technology, innovation and economic policy.
    12. Senker, Jacqueline, 1995. "Tacit Knowledge and Models of Innovation," Industrial and Corporate Change, Oxford University Press, vol. 4(2), pages 425-47.
    13. Cowan, Robin, 2001. "Expert systems: aspects of and limitations to the codifiability of knowledge," Research Policy, Elsevier, vol. 30(9), pages 1355-1372, December.
    14. Rinaldo Evangelista, 2000. "Sectoral Patterns Of Technological Change In Services," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(3), pages 183-222.
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