Organizational knowledge networks, search and exploratory invention

Abstract

This paper examines the effect of decomposability in a firm's knowledge network—the extent to which knowledge elements in a firm's knowledge base are coupled with each other or isolated from each other in separate knowledge clusters—on external knowledge sourcing and exploratory invention. We contend that decomposability shapes the process of inventive search and knowledge recombination. We show that the extent of external knowledge sourcing decrease and then increases with an increasing level of decomposability in a firm's knowledge network. Second, we reveal that the opposite—inverted U-shaped—relationship exists between decomposability and new knowledge creation; nearly decomposable networks enhance the creation of new knowledge elements in a firm's inventions. To test our hypotheses we investigate the innovation activities of a sample of firms from the global photographic equipment and supplies industry between 1975 and 2008. We highlight the contributions of these findings for research on knowledge networks, knowledge search, and recombination and discuss their implications for practice.