Open Source Strategy Research Blog

Updating business strategy for a world embracing open source

Wednesday, March 6, 2013

Investigating Knowledge Flows in Meta-Organizations

Here’s the shape of my current dissertation plans.  Feedback welcome!

Is it good or bad for firms to participating in meta-organizations?  The literature has not yet resolved this issue and the objective of my research is to fill this gap by investigating how a firm’s participation in meta-organizations affects its ability to capture value from its knowledge resources. Meta-organizations, which “comprise networks of firms or individuals not bound by authority based on employment relationships” (Gulati, et al., 2012: 573) have received increased attention in the literature recently as they appear to be governed neither by market, nor hierarchy, nor network forces (Demil & Lecocq, 2006). This focus has brought old strategy debates on the boundaries of the firm (Coase, 1937; Williamson, 1975) back into the spotlight because the strategic interactions (Kuk, 2006) that take place between firms during participation inescapably lead to knowledge flowing both into and out of the participating firms. According to the knowledge-based view of the firm, which suggests that firms exist because they are better than other organizational forms at exploiting knowledge to produce useful outcomes (Grant, 1996), there are both incentives and disincentives to extending the knowledge boundaries of the firm by participating in meta-organizations.

On the one hand, extending firm knowledge boundaries can lead to knowledge spillovers to competitors (Dyer & Nobeoka, 2000), which undermine one of the cornerstones of competitive advantage by allowing imitation of the valuable knowledge resource (Barney, 1991; Peteraf, 1993). It may also be pointless to participate in meta-organizations if a firm cannot exploit the knowledge that it learns due to limited absorptive capacity (Szulanski, 1996), rigidities and values within the firm (Leonard-Barton, 1992), or the tacitness of the knowledge (Nonaka, 1994). On the other hand, extending firm knowledge boundaries can improve product development quality (Matusik, 2002) and improve a firm’s ability to internally transmit knowledge (Kogut & Zander, 1992). It may also give a firm access to knowledge that it might not have been able to create on its own (Goldman & Gabriel, 2005). Further, the value lost to competitors in knowledge spillovers might be smaller than the value that firms capture from participation, leading to a net value increase (Casadesus-Masanell & Llanes, 2011). In addition, the net value of participation may be determined by the complementariness of a firm’s resources and capabilities rather than the location of the knowledge boundaries of the firm (Dyer & Singh, 1998).

My research addresses this conflict in the literature by investigating three specific research questions: 1) Which characteristics of meta-organizations are optimal for the development and sustaining of knowledge-based competitive advantage by participating firms? 2) What governance forms and norms of interaction in meta-organizations promote optimal levels of knowledge-exchange between participants?  3) How long and in what ways must a firm participate in a meta-organization in order to generate valuable, exploitable knowledge resources?

The management literature has been unable to address these specific questions despite the availability of large databases that track open collaborations, which are a type of meta-organization comprising “any system of … production that relies on goal-oriented yet loosely coordinated participants who interact to create [something] of economic value, which is made available to contributors and non-contributors alike” (Levine & Prietula, 2012: 4). These databases are the ideal data source for exploring these research questions as the knowledge-sharing routines (Dyer & Singh, 1998) in open collaborations are different from those in traditional alliances and networks (Gulati, 1998) and direct inspection of all of the knowledge flows that take place during the collaborations is possible. Industry-standard databases such as COMPUSTAT only track financial performance and related data. There are no data about the specific knowledge-sharing activities of companies in particular collaborations. By contrast, the open collaboration databases that I have access to from the Mozilla Foundation (known for the Firefox web browser), the Eclipse Foundation (known for their suite of programming tools), and the Linux kernel (the core of the operating system run by over 90% of enterprises) collectively contain over 30 years’ worth of detailed interactions between some of the largest Fortune 500 companies (O’Mahony & Ferraro, 2007). There are more than 20 million unique data points that exhaustively codify all of the knowledge flows between both firm- and individual-level participants throughout the entirety of the collaborations and that have not previously been analyzed in management research. One possible reason that these databases have been overlooked is that they are technically complex and require expertise to access and interpret, resulting in previous research remaining mostly limited to the field of computer science. My unique combination of computer engineering, management and statistical analysis training enables me to access and analyze these extensive longitudinal panel data sources for management research.

This research will enable three important theoretical advancements. First, it will improve the accuracy of theoretical models of the relationship between knowledge creation and social forces, answering the call for such research by Nonaka and von Krogh (2009). Second, it will provide the first empirical investigation of lower-level knowledge sharing constructs in the context of governance mechanisms in meta-organizations, answering the call by Foss, et al., (2010). Third, it will improve the current limited understanding of the competitive implications of extending the knowledge-based boundaries of the firm (Lichtenthaler, 2011), answering the call by Bogers, et al., (2010).

This research will advance the practice of strategic management in three ways. First, it will enable managers to more accurately predict the outcomes of their firm’s participation in meta-organizations. Second, it will offer managers guidance on coordinating knowledge-sharing relationships with stakeholders outside traditional firm boundaries, in particular lead users (Dahlander & Frederiksen, 2012) and competitors (von Hippel & von Krogh, 2003). Third, it will improve the innovative potential of firms (Jacobides & Billinger, 2006) by demystifying an option for external collaboration that was impossible before the recent surge of novel meta-organizational forms (Benkler, 2002).

posted by Mekki at 3:12 pm  

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