Abstract
This study is an effort towards understanding the role of organizational systems in innovation performance. We consider two distinct perspectives of organizational systems in terms of knowledge creation and innovation performance. One perspective considers organizational systems as serving to recombine existing knowledge to create new knowledge and thus value, while the other views organizational systems as a tool for implementing knowledge created by individual members in a value-adding way. The study develops a model in which organizational systems mediate the relationship between knowledge and organizational innovation performance in order to better understand how organizations themselves, as distinct from the individuals which make up the organization, contribute to innovation. The study applies Structural Equation Modeling (SEM) to plant level data to explore the importance of organizational systems on knowledge transfer and performance. The findings suggest that organizational systems mediate the relationship between knowledge transfer and innovation performance, supporting the idea of the organization as a central actor in knowledge creation. Also, internal knowledge sources were found to contribute more to the knowledge transfer within the firm when compared to external knowledge sources.
Highlights
The importance of knowledge as a strategically important resource and as a source of competitive advantage is widely accepted (Conner and Prahalad, 1996; Grant, 1996; Kogut and Zander, 1992; Szulanski et al, 2016)
We develop a model in which organizational systems mediate the relationship between knowledge and organizational innovation performance in order to better understand how organizations themselves, distinct from the individuals which make up the organization, contribute to innovation
Knowledge transfer appears to have an effect on innovation performance that is mediated by organizational systems
Summary
The importance of knowledge as a strategically important resource and as a source of competitive advantage is widely accepted (Conner and Prahalad, 1996; Grant, 1996; Kogut and Zander, 1992; Szulanski et al, 2016). The capability of an organization and its systems to absorb, transfer, replicate, and combine knowledge plays a significant role in determining its ability to generate innovative new ideas, products, or processes. This ability to transfer knowledge effectively between organizational units is necessary for superior performance and productivity, whereas the organizations lacking this ability are considered to be at a disadvantage (Almeida and Kogut, 1999; Argote et al, 1990; Hansen, 2002; Inkpen and Tsang, 2005). There remains some disagreement regarding the level at which knowledge creation takes place and the role played by the organization versus that of the individual members of the organization in the creation of new knowledge
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