Social capital, knowledge quality, knowledge sharing, and innovation capability: An empirical study of the Indian pharmaceutical sector

• Author: Debdeep Chatterjee,Anirban Ganguly,Asim Talukdar
• Published date: 01 January 2020
• Date: 01 January 2020
• DOI: http://doi.org/10.1002/kpm.1614

RESEARCH ARTICLE

Social capital, knowledge quality, knowledge sharing,

and innovation capability: An empirical study of the

Indian pharmaceutical sector

Anirban Ganguly

1

| Asim Talukdar

1

| Debdeep Chatterjee

2

1

Jindal Global Business School, O. P. Jindal

Global University, Sonipat, India

2

John Molson School of Business, Concordia

University, Montreal, Quebec, Canada

Correspondence

Anirban Ganguly, Jindal Global Business

School, O. P. Jindal Global University, Sonipat,

Haryana 131001, India.

Email: aganguly@jgu.edu.in

Management of technology and innovation is a topic that has been subjected to a lot

of discussions by the academicians and practitioners alike. Furthermore, researchers

have emphasized the importance of the role that knowledge management/knowledge

sharing can play in promoting innovation in an organization. The purpose of this paper

is to evaluate the role of social capital and knowledge sharing in achieving innovation

capability of an organization. It also discusses the role that knowledge quality might

play in fostering the innovation capability of an organization. The basic research

model was developed based on an in-depth review of the extant literature and subse-

quently tested based on survey data collected from 97 senior executives across multi-

ple pharmaceutical organizations in India. The findings of the partial least squares

structural equation modeling indicated that knowledge quality and explicit and tacit

knowledge sharing had a significant effect on innovation capability of pharmaceutical

organizations in India. It further highlighted that although relational and cognitive

social capital play a significant role in improving the quality of shared knowledge

among the employees, structural social capital did not have a significant role to play.

The findings of this study are expected to aid the pharmaceutical sector to understand

the role that knowledge sharing might play in achieving its innovation capability and

design knowledge management strategies accordingly.

1|INTRODUCTION

Intense competition among organization and their supply chains,

coupled with improvement in technology and global sourcing, has

greatly affected business across the world. As a result, organizations

have started becoming more creative as a part of their survival

strategy. This requires them to adapt novel processes that require gar-

gantuan effort and changes in several parts of the business (Yes¸il,

Büyükbes¸e, & Koska, 2013). Innovation, which can be stated as gener-

ation and implementation of new ideas, products, and processes that

are perceived as new to the relevant group adopting the same

(Rogers, 2003; Thompson, 1965; Zaltman, Duncan, & Holbek, 1973),

is probably the most important weapon for competitive advantage for

an organization. In the context of healthcare, innovation can be stated

as the “changes that help healthcare practitioners focus on the patient

by helping healthcare professionals work smarter, faster, better and

more cost effectively”(Thakur, Hsu, & Fontenot, 2012, p.564,). As a

result, pharmaceutical industries have started to depend heavily on

continuous innovation as a part of their growth and sustainability

strategy (Lilleoere & Hansen, 2011). However, over the years, the pro-

cess of innovation has become extremely complex and often risky,

thanks to the unforeseen changes in customer demand, radical tech-

nological changes, and cutthroat competition among the organizations

(Cavusgil, Calantone, & Zhao, 2003; Griffin, 1997). Rajapathirana and

Hui (2018) argued that the firm's capability to innovate is the most

crucial factor for competitive advantage in highly turbulent market

condition. Innovation capability leads an organization to develop inno-

vations continuously to respond to the changing market environment

Received: 28 March 2019 Accepted: 28 August 2019

DOI: 10.1002/kpm.1614

Knowl Process Manag. 2020;27:25–42. wileyonlinelibrary.com/journal/kpm © 2019 John Wiley & Sons Ltd

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(Slater, Hult, & Olson, 2010), and it is embedded with all the strategies,

system, and structure that support innovation in an organization

(Gloet & Samson, 2016).

Over the years, manufacturing and service organizations have

repeatedly outlined the importance of management and sharing of

knowledge as an integral part of their growth and business strategy

(Ganguly, Chatterjee, & Farr, 2018). Knowledge, which can be defined

as “a fluid mix of framed experience, values contextual information,

and expert insight that provides a framework for evaluating and incor-

porating new experiences and information”(Baskerville & Dulipovici,

2006, p. 84), often gets embedded “not only in documents or reposito-

ries but also in organizational routines, processes, practices, and

norms”(Davenport & Prusak, 1998, p. 5). Therefore, managing organi-

zational knowledge constitutes a key operation for the business suc-

cess of an organization. Effective knowledge management aids an

organization to look for, organize, share, and transfer important infor-

mation and expertise that are necessary for strategic planning and

decision-making (Gupta, Iyer, & Aronson, 2000). Additionally, it has

been repeatedly observed that effective management of knowledge is

critical to the growth and success of an organization, especially organi-

zations that need to be highly creative in order to maintain their com-

petitive advantage (Dieng, 2000). In the context of pharmaceutical

industries, knowledge is generated at a significant rate and is repre-

sented by a plethora of modalities (Abidi, 2007) and sharing of those

knowledge aids in elevating the quality and efficiency of healthcare

services (Ryu, Ho, & Han, 2003). As a result, knowledge management

has become a vital cog in the success of innovation, especially for the

healthcare and the pharmaceutical industries.

One of the key components of knowledge management is knowl-

edge sharing, which can be defined as “the act of making knowledge

available to others within the organization”(Ipe, 2003, p. 341). Knowl-

edge transaction is dependent on social interaction that involves the

exchange of employee knowledge, experiences, and skills throughout

a department or an organization (Lin, 2007). Knowledge sharing leads

to an increase in the speed, efficiency, and quality of a process (Hogel

et al., 2003; Lin, 2007), along with reducing the cost of production and

enhancing innovation capabilities (Gruenfeld, Martorana, & Fan,

2000). Radaelli, Lettieri, Mura, and Spiller (2014), in their study per-

taining to knowledge sharing in healthcare, found out that employees

who share knowledge also engage more in creating, promoting, and

implementing innovations. The importance of knowledge sharing in

contributing to innovation capabilities has been stressed by numerous

researchers (Akhavan & Hosseini, 2016; Liao, Fei, & Chen, 2007; Lin,

2007; Yes¸il et al., 2013), and knowledge donation and collection—

which form two major components of knowledge sharing—have been

observed to generate new ideas, thereby facilitating innovation activi-

ties (Lin, 2007).

Literature on knowledge management and sharing has exhibited

the existence of two broad types of knowledge that can be shared—

explicit and tacit. Although explicit knowledge has been known to be

documented, codified knowledge, its tacit counterpart mostly consists

of unwritten, word of mouth categories that are often shared infor-

mally. In other words, explicit knowledge can be transferred in

a formal, systemic language, whereas tacit knowledge is rooted in

actions and involvement in a specific context (Nonaka, 1994; Polanyi,

1962). Therefore, a successful knowledge sharing process should

involve complimentary methods for both explicit and tacit knowledge

(Jørgensen, Scarso, Edwards, & Ipsen, 2018). Although it has been

exhibited in previous researches that tacit knowledge transfer plays a

significant role in fostering the innovation capability of an organization

(Cavusgil et al., 2003), explicit knowledge can also lead to the creation

of innovative ideas (du Plessis, 2007). Abidi (2007) calls this as

“resource mediated knowledge sharing,”which are identified, regis-

tered, and shared as potential sources of knowledge for a specific

healthcare issue. Smith (2001), in her study on the role of knowledge in

the workplace,argued that both explicit and tacit knowledge aid in fos-

tering creativity and innovation and stated that an optimal balance of

explicit and tacit knowledge has to be drawn for an organization to be

successful.Therefore, it is imperative that bothexplicit and tacit knowl-

edge need to be shared and/or transferred for an organization to be

more creative,and in the process, improving itsinnovation capability.

Within the domain of knowledge management, social capital has

been known to be a factor influencing knowledge sharing behavior

and intention, and in turn, facilitating more innovative activities.

Social capital has been observed to contribute significantly to knowl-

edge sharing activities, thereby affecting innovation activities in the

process. Social capital, which is defined as “… the goodwill that is

engendered by the fabric of social relations and that can be mobi-

lized to facilitate actions”(Adler & Kwon, 2002, p. 17), has become a

cornerstone of knowledge sharing, and its importance has subse-

quently trickled down to innovation and competitive advantage.

Social capital comp rises of three dimension s—structural, relational,

and cognitive (Nahapiet & Ghoshal, 1998)—all of which can affect

knowledge sharing through sharing a common ability that aids in the

correct assessmen t and interpretation of other people's know ledge

(van den Hooff & Huysman, 2009). Alguezaui and Filieri (2010), in

their study on the influence of social capital on innovation, deter-

mined that social capital can provide an organization the ability to

access novel knowled ge, which will lead to a benefit in t he firm's

innovation perfor mance. Furthermore, van d en Hooff and Huysman

(2009) concluded that knowledge sharing is not dependent on man-

agement intervention but on the social capital of a group of people.

In additional to these, there have been multiple studies underlining

the importance of social capital in nurturing knowledge sharing and

innovation (Akhavan & Hosseini, 2016; Chiu, Hsu, & Wang, 2006;

Göksel & Aydıntan, 2017; Inkpen & Tsang, 2005; Sechi, Borri,

Lucia, & Celmins, 2011; Yen, Tseng, & Wang, 2015). Hence, social

capital plays a vital role in knowledge sharing behaviors and can

most definitely contribute to the innovation capabilities of an

organization.

Another important aspect of successful knowledge sharing and

using the shared knowledge creatively is the quality of knowledge

GANGULY ET AL.

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