Existing Knowledge, Knowledge Creation Capability, and the Rate of New Product Introduction in High-Technology Firms

Abstract

A field study of top management teams and knowledge workers from 72 technology firms demonstrated that the rate of new product and service introduction was a function of organization members' ability to combine and exchange knowledge. We tested the following as bases of that ability: the existing knowledge of employees (their education levels and functional heterogeneity), knowledge from member ego networks (number of direct contacts and strength of ties), and organizational climates for risk taking and teamwork.

Does incremental and radical innovation performance depend on different types of knowledge accumulation capabilities and organizational size?

“…Internal knowledge creation is usually a reaction to a perceived need for that knowledge which depends on the firm's experience and knowledge base (Smith et al, 2005). However, it should be recognised that as agents in constant contact with their external environment, members of a firm can create knowledge internally in the firm from external ideas or information.…”

“…It also covers renewal of the knowledge stock through firm's employees exchanging their existing knowledge and combining it in new ways (Danneels, 2008;Helfat and Peteraf, 2003;Rosenkopf and Nekar, 2001;Zollo and Winter, 2002). As Smith et al (2005) point out, implicit in the notion of exchange is the assumption that individuals hold different levels and types of knowledge and they will engage in teamwork and communication to learn from one another.…”

“…Teamwork is also considered a powerful tool to help integrate new knowledge within the organization that can subsequently be applied to different situations, guaranteeing the firm's constant strategic renewal. The firm's directors can also collaborate in the amplification and crystallisation of new created knowledge (Nonaka and von Krogh, 2009) by developing an appropriate structure, an organizational culture to attract and retain qualified human capital, a climate that favours risk taking, a leadership focused on knowledge creation and learning objectives, as well as a clearly recognisable mission to foster employees' identity and alignment with the firm's strategy (Nonaka, 1994;Smith et al, 2005).…”

“…According to Bierly and Chakrabarti (1996), internal knowledge creation occurs when members of the organization generate, transfer and integrate new knowledge within the boundaries of the firm. Internal knowledge creation capability entails the addition of new components in the firm's knowledge base through organizational creativity, experience, apprenticeship, experimentation, R&D, and problem solving (Bontis et al, 2002;Nonaka, 1994;Smith et al, 2005). It also covers renewal of the knowledge stock through firm's employees exchanging their existing knowledge and combining it in new ways (Danneels, 2008;Helfat and Peteraf, 2003;Rosenkopf and Nekar, 2001;Zollo and Winter, 2002).…”

“…However, the literature identifying the key aspects to develop innovation performance based on knowledge accumulation capabilities (Jiménez-Jiménez and Sanz-Valle, 2011) requires additional conceptual and empirical research (Kim et al, 2012;van Wijk et al, 2008). Firms can accumulate new knowledge by generating it internally, through a process of internal knowledge creation grounded on the skills, knowledge and experiences of their employees (Smith et al, 2005), by acquiring it from external sources through the development of their absorptive capability (Cohen and Levinthal, 1990), or by implementing a strategy to accumulate new knowledge that combines both these options.…”