Organizational knowledge networks and local search: The role of intra‐organizational inventor networks

• Author: Snehal Awate,Srikanth Paruchuri
• DOI: http://doi.org/10.1002/smj.2516
• Published date: 01 March 2017
• Date: 01 March 2017

Strategic Management Journal

Strat. Mgmt. J.,38: 657–675 (2017)

Published online EarlyView 12 April 2016 in WileyOnline Library (wileyonlinelibrary.com) DOI: 10.1002/smj.2516

Received 15 May 2013;Final revision received18 February 2016

ORGANIZATIONAL KNOWLEDGE NETWORKS AND

LOCAL SEARCH: THE ROLE OF

INTRA-ORGANIZATIONAL INVENTOR NETWORKS

SRIKANTH PARUCHURI1*and SNEHAL AWATE2

1Department of Management & Organization, The Pennsylvania State University,

University Park, Pennsylvania, U.S.A.

2Department of Strategy, Indian School of Business, Gachibowli, Hyderabad, India

Research summary: While rms tend to build on their own knowledge, we distinguish between

depth and breadth of local searchto investigate the drivers of these behaviors. Given that inventors

in a rm carry out the knowledge creation activities, we strive to identify inventors responsible

for these behaviors by employing the notion of an intra-rm inventor network. A longitudinal

examination of 14,575 inventors from four large semiconductor rms using patent data supports

our hypotheses that the reach of inventors in the intra-rm network and their span of structural

holes have independent and interactive effects on these two types of local searchbehaviors. These

ndings have implications for researchon exploitation and exploration, organizational knowledge,

knowledge networks, and micro-foundations.

Managerial summary: Large amounts of knowledge may reside within rm boundaries, and

managers are interested in understanding who may leverage this knowledge to generate novel

ideas. We focus on collaborations among knowledge workers to address this question. Using

the collaborations among all knowledge workers in a rm, we show that those who have higher

reach to all others and those who form bridges to connect unconnected groupsof workers tend to

leverage not only more organizational knowledge, but also knowledge that is more dispersed in

the organization. Managers could use these insights to shape the use of organizationalknowledge

by rm inventors, and also to make decisions about granting or withholding access to internal

knowledge platforms for knowledge workers. Copyright © 2016 John Wiley & Sons, Ltd.

INTRODUCTION

Recognizing the prevalence and signicance of

local search (March, 1991; Nelson and Winter,

1982), scholars have examined the drivers of or

ways to overcome local search (Monteiro, 2015;

Rosenkopf and Almeida, 2003; Stuart and Podolny,

1996; Tzabbar, 2009). Some of these explanations

reect the micro-foundations approach (Felin and

Foss, 2005) and primarily focus on individual

Keywords: local search; intra-organizational network;

organizational knowledge; local search dimensions;

knowledge network

*Correspondence to: Srikanth Paruchuri, Smeal College of Busi-

ness, 404 Business Building, University Park, PA16802. E-mail:

sup28@psu.edu

Copyright © 2016 John Wiley & Sons, Ltd.

characteristics (Audia and Goncalo, 2007;

Rosenkopf and Almeida, 2003; Tzabbar, 2009;

Tzabbar and Kehoe, 2014; Tzabbar, Silverman, and

Aharonson, 2015). Others have taken a more macro

approach and focused on rm-level attributes, such

as absorptive capacity (Cohen and Levinthal, 1990),

organizational slack (Greve, 2007), organizational

structure (Jansen, Van den Bosch, and Volberda,

2006), alliances (Stuart and Podolny, 1996), role of

headquarters (Monteiro, 2015), and organizational

age and size (Kotha, Zheng, and George, 2011).

In this article, we complement both these streams

of earlier research and focus on intra-organizational

networks, and in particular, on individuals occupy-

ing different positions in the intra-organizational

networks. When an organization creates new

technological knowledge, it is the inventors in

658 S. Paruchuri and S. Awate

the organization who create the new knowledge

by recombining existing knowledge (Fleming,

2001). So, when organizations build on their own

technological knowledge, it is the inventors who

build on the organizational knowledge. But, not

all inventors are likely to build on organizational

knowledge equally.Some inventors may build more

on organizational knowledge than others. These

variations may stem from differences in awareness

of the entire organizational knowledge that exists,

owing to inventors’ bounded rationality (Cyert and

March, 1963), and access to the entire organiza-

tional knowledge (Allen and Cohen, 1969). Prior

research suggests that these differences among

individuals in terms of their awareness and access

to organizational knowledge can be explained in

terms of their positions in the intra-rm network

(Allen and Cohen, 1969; Burt, 1992; Nerkar and

Paruchuri, 2005). In essence, we examine the

extent to which individuals occupying different

structural positions in the intra-organizational

network engage in local search behavior.

Employing the notion of intra-organizational

inventor network, we specically examine the rela-

tionship between an inventor’s reach and span of

structural holes in this intra-organizational inventor

network with local search behavior. Focusing

on organizational boundaries, we distinguish

between two dimensions of local search: depth

of local search— the amount of organizational

knowledge that he or she recombines in his or her

innovations— and the breadth of local search—the

extent of technological domains and geographic

locations from which organizational knowledge is

recombined. We also examine the interactive effect

of an inventor’s reach and span of structural holes.

Our ndings, using patent data on 14,575 inventors

from four large semiconductor rms, largely sup-

port this theoretical framework and have implica-

tions for research on organizational exploitation and

exploration, organizational knowledge, knowledge

networks, and micro-foundations of rm R&D.

THEORETICAL BACKGROUND

AND DEVELOPMENT

Dimensions of organizational local search

Prior research has theorized and broadly docu-

mented that rms build on their own knowledge

(March, 1991; Nelson and Winter, 1982; Teece,

1988). Specically, March (1991) posited that

organizational knowledge is easily accessible and

already familiar compared to external knowledge

bases. Exploiting this familiar and accessible

knowledge not only is less costly, but also provides

more certainty on the outcomes than exploring

knowledge from outside the rm’s boundaries.

We follow this stream of research to focus exclu-

sively on local search within organizational

boundaries— use of organizational knowledge for

recombination activities (Katila and Ahuja, 2002;

Rosenkopf and Nerkar, 2001).

Building on and extending this research, we

distinguish between two dimensions of local

search: depth and breadth of local search. Depth

of local search refers to the amount of organiza-

tional knowledge that is used in one’s innovation

activities. So, we consider inventors using more

organizational knowledge in their innovation activ-

ities to perform deeper local search than inventors

using less organizational knowledge. This is the

same notion of “search depth” developed by Katila

and Ahuja (2002). Breadth of local search refers

to the extent of different domains from which

organizational knowledge is drawn. For example,

technological breadth (geographical breadth) of

local search refers to the extent of technological

classes (geographical locations) from which orga-

nizational knowledge is drawn. So, we consider

inventors who source organizational knowledge

from more technological domains as performing

broader technological local search than inventors

who source organizational knowledge from few

technological domains. Note that this notion of

breadth of local search is quite distinct from “search

scope” developed by Katila and Ahuja (2002).

While both notions refer to breadth of search,

Katila and Ahuja’s notion is unbounded about

which knowledge is searched, whereas our notion

is bounded by search in organizational knowledge.

Intra-organizational networks and local search

behavior

Having claried our notion of local search,

we now theoretically elaborate the role of

intra-organizational networks in shaping local

search behavior. We focus on the network positions

of inventors responsible for such organizational

local search behavior. That is, while a rm is said to

build on its own knowledge, it is the rm’s inven-

tors who actually carry out the knowledge creation

Copyright © 2016 John Wiley & Sons, Ltd. Strat. Mgmt. J.,38: 657–675 (2017)

DOI: 10.1002/smj