Big Fish, Big Pond? The Joint Effect of Formal and Informal Core/Periphery Positions on the Generation of Incremental Innovations

Abstract

In this paper, we apply a core/periphery framework to an intraorganizational context to study the interplay between formal and informal core/periphery structures. Specifically, we consider how core positions occupied by inventors in the corporate research and development division of a large multinational high-tech company affect their ability to generate incremental innovations. We theorize and empirically observe that formal and informal core positions have positive and independent effects on the generation of incremental innovations. These effects have a multiplicative impact on innovative productivity when inventors who are core in the informal knowledge-sharing network are also affiliated with a core organizational unit. We also observe, however, that the positive effect of being located at the core of both the informal and formal structures is negatively moderated by individuals’ distribution of knowledge ties when these reach outside the core of their informal knowledge-sharing network.