Knowledge management practices for stimulating incremental and radical product innovation

Abstract

According to Agarwal and Helfat (2009, p. 282) strategic renewal includes “the process, content, and outcome of refreshment or replacement of attributes of an organization that have the potential to substantially affect its long-term prospects”. This is a broad definition, which can include many forms of renewal activities, in response to both external opportunities/threats and internal strengths/weaknesses. Examples of renewal activities currently receiving much attention are innovation activities, creating opportunities for both incremental and radical innovation. Crucial to innovation and the subsequent development of sustainable competitive advantage is the organization’s ability to create and transfer knowledge (Nonaka, 1991, 1994). This ability depends upon the extent to which the organization succeeds in combining and exchanging existing knowledge among employees (Nahapiet and Ghoshal, 1998). Several studies have shown that the implementation of knowledge management practices that stimulate individual employees to develop their knowledge base (e.g. job rotation, training, financial incentives for new ideas), exchange their knowledge with others (e.g. teamwork, employee participation, suggestion schemes) or make their knowledge part of the organizational memory (e.g. input of knowledge in lessons learned databases) can be fruitful in this respect (e.g. Chen and Huang, 2009; Greiner, Bohmann and Krcmar, 2007; Lopez-Cabrales, Perez-Luno and Cabrera, 2009; Wang and Noe, 2010; Zhou, Hong and Liu, 2013). These practices incite a learning process, the creation of fresh insights and the discovery of new opportunities among employees, important antecedents of new knowledge creation and innovation.