Strategic Management Lecture 6

7/30/2019 Strategic Management Lecture 6

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Innovation, TechnologyInnovation, Technology

Transfer and KnowledgeTransfer and Knowledge


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OverviewOverview

Strategy, innovation and knowledge

The importance of technology transfer

Technology transfer and organisationallearning

Mechanisms and barriers

Managing knowledge Conclusions


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Innovation and CompetitionInnovation and Competition

Innovation vital to competitive advantage the motor of the modern economy turning ideas

and knowledge into products and services ( UKOffice of Science and Technology)

Meet challenge of turbulent and demandingenvironment i.e

- government legislation (green issues)

- changes in what consumers want, need,value, can afford

- rapid technological change


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Innovation and competitionInnovation and competition

Focus used to be on COST think lean production,supply chain management etc

Now INNOVATION seen as the key to success

Innovation creates, sustains core competencies

The real source of advantage are to be found in

managements ability to consolidate corporate-widetechnologies and production-skills into competencies thatempower individual businesses to adapt quickly tochanging opportunities

(Hamel and Prahalad 1990)


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Four Types of InnovationFour Types of Innovation

The 4Ps Product: a physical entity, new things Process: a way of doing/delivering things,

These first two Ps often overlap because anew product is often the means ofdelivering a new service e.g. a stand-uptanning booth

Position: a way of defining products orprocesses

Paradigm: a new way of seeing the world

and living in it


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The Strategic Importance ofThe Strategic Importance of

InnovationInnovation Innovation is central to competitive

advantage

Innovation = invention, commercialisation

and imitation Innovation = the 4Ps

Innovation seen as central to socio-

economic development Innovation is seen as central to behaviour

of markets


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The Importance of InternationalThe Importance of International

Technology TransferTechnology Transfer Motivations for the transfer of technology

Transfer of work to low-wage countries

Franchises and collaborative ventures

Suppliers and other intermediaries Innovation transfer within MNEs

Assisting developing countries

EU, government and other funding sponsors

Funding mechanisms

Venture capitalists


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The Context of TechnologyThe Context of Technology

TransferTransfer Supra-national and National Innovation Systems

(Lundvall,1992)

Regional and Local Innovation Systems

Regional government Local development schemes business and science parks,clusters

Absorptive Capacity of Organisations

University Industry links and other TTIs

Evolving standards and computer platforms

Cultural and Ethical Factors


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Technology Transfer andTechnology Transfer and

Organisational LearningOrganisational Learning

The organisational learning debate

Individual and group learning leading to

organisational learning

The management role

Absorptive capacity and organisational

learning The role of networks


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Mechanisms of and Barriers toMechanisms of and Barriers to

Innovation & TechnologyInnovation & Technology

TransferTransfer Relevance issues (Pollard and Tayeb, 1997)

Training methods

Networking (Pollard and Jemicz, 2006)

Cultural factors

Old versus new thinking

The costs of technology transfer

Firms and Government


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Human FactorsHuman Factors

Resistance to change

Engaging local networks and social

structures

The use of expatriate staff in technology

transfer

Two-way flows of information


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The Knowledge-Intensive FirmThe Knowledge-Intensive Firm

Starbuck (1992) firms that depend on intensive

knowledge (as opposed to labour intensive or

capital intensive.

Convert intellectual capital into outputs (mainlyspecified by clients) through the acquisition,

creation and application of knowledge.

Original work on KM tended to concentrate on

technological dimensions


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Key ProcessesKey Processes

Generating Knowledge and expertise generated inside or acquired from outside

Organizing

Interpretation, analysis, codification, aggregation filing, updating andarchiving of knowledge

Developing Creativity and problem solving

Distributing Making access simpler; encouraging the use and re-use of

knowledge.


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Challenges (Apostolou & Mentzas,Challenges (Apostolou & Mentzas,

1999)1999) Make knowledge which is fuzzy and intangible visible and tangible

Enable and structure flow of knowledge between seekers and providers

Integrate knowledge aspects into the corporate strategy

Develop organizational forms and processes that facilitate the use anddevelopment of knowledge

Create a knowledge sharing culture with suitable rewards

Embody personal knowledge into corporate routines

Keep but also nurture tacit and complex knowledge as a competitiveweapon


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Essentials?Essentials?

Building a knowledge intensive culture

Importance of staff development and

talent management (Robertson &

OMalley, 2000)

Networks

IT systems Performance and rewards


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Knowledge TransferKnowledge Transfer

The Knowledge Transfer Process Knowledge transfer usually takes place between at least two

parties, the source and recipient who may already possess someform of tie (Contractor & Monge, 2002).

Examples of these are supply chain membership, supplier

customer relationships, or collaborative ties in the form of strategicalliances.

Knowledge transfer has been defined as a process through which

one entity is affected by the experience of another (Argote &Ingram, 2000).


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Knowledge Transfer ContextsKnowledge Transfer Contexts

The source and recipient contexts are often defined in terms oforganizational characteristics such as the experience, values, trust,motivation, organizational structures, norms and beliefs and theability to take advantage of the supply and receipt of new knowledge(Joshi & Sarker, 2006; Albino et al, 2004).

The knowledge context refers to the type, complexity and the levelof embeddedness of knowledge and its representation (Cummings& Teng, 2003).

The relational context includes the channel characteristics of the

knowledge transfer process, for example physical proximity

(Szulanski, 1996), the extent of ties (Hansen, 1999), the extent ofsocial interaction (Kogut & Zander, 1995), differences in knowledgelevels (Argote et al, 2000) and cross-cultural differences (Fink &Holden, 2005; Bhagat et al, 2002; Jackson, 2001). .


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Knowledge Transfer ContextsKnowledge Transfer Contexts

The environmental context takes accountof rapidly changing learning andinnovation environments especially relatedto economic, political and technologicalchange as it affects the knowledgetransfer process (Kim & Nelson, 2000).

Various studies have examined specific features of the

process in more detail but few have examined theinteraction of these contextual domains (Cummings &Teng, 2003).

Ab ti C it dAbsorpti e Capacit and


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Absorptive Capacity andAbsorptive Capacity and

Knowledge TransferKnowledge Transfer

Gilbert & Cordey-Hayes (1996) emphasizethe importance of not only the source andrecipient organizations engaging in

knowledge transfer but also in theacquisition, communication, application,acceptance and assimilation ofknowledge. Cohen and Levinthal (1989,

1990) conceptualized an organizationsability to acquire integrate and utilise newknowledge as its absorptive capacity.


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Knowledge and CompetitionKnowledge and Competition

SMEs having to deal with a rapidly changing

and competitive business environment

Lack resources to be self-sufficient in

knowledge creation Knowledge as a competitive force (see, for

example, Grant, 1996)

Thus they depend to an extent on inter-organizational transfer of knowledge


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Knowledge transfer as a complexKnowledge transfer as a complex

processprocess Knowledge transfer as a process (Argote & Ingram, 2000) which

involves and depends on people Successful transfer depends on several factors such as previous

experience, values, trust, motivation, organizational structures,norms and beliefs and the ability to take advantage of the supplyand receipt of new knowledge (Albino et al, 2004)

Also depends on the complexity, representation andembeddedness of knowledge (Cummings & Teng, 2003) and therelationship between source and recipient, for example in theexistence of networks (Hansen, 1999)

Both management and employee perspectives important(Englehard & Simmons, 2002)

An example of knowledge transfer is in sourcing informationconcerning best practice and implementing change accordingly


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Knowledge transfer, absorptiveKnowledge transfer, absorptive

capacity and HRDcapacity and HRD

Knowledge transfer inextricably linked with absorptive

capacity the ability to source, adapt, integrate and

adapt new knowledge

The higher the level of absorptive capacity, the more

effective the transfer process and more complex

knowledge obtained.

Absorptive capacity depends on the knowledge base of

both management and staff, which in turn, depends on

the level of human resource development in firms


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Current State of KMCurrent State of KMCurrent State of KMCurrent State of KM

it can help organise information better

its transforming the way we do business

something we do but dont have a fancy name for it

never heard of it

just a fad?

Knowledge as a key intangible asset (Sveiby,

1997) A source of competitive advantage (e.g.

Argote & Ingram, 2000; Grant, 1996

KM is here to staybut what do people say?.


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Theoretical Framework for ManagingTheoretical Framework for Managing

KnowledgeKnowledge

Theoretical Framework for ManagingTheoretical Framework for Managing

KnowledgeKnowledge

Western Concept

Management sees the

organisation as a

machine for information

processing

Japanese Concept?

Management concentrates

on the creation of

knowledge, rather thanknowledge itself =

innovation and creativity =

competitive advantage

The Knowledge Creating Company: Nonaka & Takeuchi 1995

"We make the claim that Japanese

companies have been successful

because of their skills andexpertise at "organizational

knowledge creation."


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The Knowledge Creating CompanyThe Knowledge Creating CompanyThe Knowledge Creating CompanyThe Knowledge Creating Company

"Information is a flow of

messages, while knowledge is

created by that very flow of

information, anchored in thebeliefs and commitment of its

holder."

"The role of the organization in

the organizational knowledge-

creation process is to provide the

proper context for facilitatinggroup activities as well as the

creation and accumulation of

knowledge at the individual level.""The sharing of tacit knowledge

among multiple individuals with

different backgrounds,perspectives, and motivations

becomes the critical step for

organizational knowledge

creation to take place."

"Middle managers are the true

"knowledge engineers" of the

knowledge-creating company"

The Knowledge Creating Company: Nonaka & Takeuchi 1995

Strategic Management Lecture 6

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