The Moderating Role of Organizational Capital Between Knowledge Acquisition and Firm Performance

Abstract

Knowledge acquisition, particularly that of highly valuable knowledge assets, is generally understood to drive professional service firm performance and lead to the establishment of competitive advantage. However, the possession of a given asset is not synonymous with its effective use, and barriers to the intrafirm diffusion of knowledge abound, stemming from, among other things, the nature of the knowledge assets themselves. Thus, the positive impact of knowledge acquisition on firm performance is far from automatic. We argue that organizational capital may bridge this gap between acquisition and performance. We develop and test the moderating effects of two modes of organizational capital – one structural, one cultural – and we find partial support for our overarching theorizing that insofar as organizational capital engenders the integration of new knowledge assets, it moderates the relationship between knowledge acquisition and firm performance such that firm performance is enhanced. Theoretical and practical implications are discussed.