The Application of External Knowledge: Organizational Conditions for Exploration and Exploitation

29 Pages Posted: 27 Apr 2009

See all articles by Paul E. Bierly

Paul E. Bierly

James Madison University - College of Business

Fariborz Damanpour

Rutgers Business School, Newark

Michael D. Santoro

Lehigh University - Department of Management

Abstract

A firm's ability to acquire and exploit external knowledge is often critical to achieving and sustaining a competitive advantage. In this study, we adopt a multi-dimensional view of absorptive capacity and focus specifically on the application of external knowledge that has been obtained via university-firm collaborations. We examine various organizational conditions that we propose influence a firm's ability to apply external knowledge for explorative and exploitative innovations. We collected data by a survey of firms in industries that frequently work with university research centres (URCs) and from publicly available sources. Results show that predictors of exploration and exploitation of the application of external knowledge differ. Surprisingly, technological relatedness, a common measure of absorptive capacity, is negatively associated with the application of external knowledge to explorative innovations, indicating that knowledge from more distant sources is applied more to exploration. Results also indicate that the effects of two external learning capabilities (prior experience with URCs and technological capability) on knowledge application are moderated in such a way by the tacitness of the knowledge transferred that experience is a stronger predictor when the knowledge is more explicit and technological capability is a stronger predictor when the knowledge is more tacit. We discuss the implications of these findings for research on the application of external knowledge.

Suggested Citation

Bierly, Paul E. and Damanpour, Fariborz and Santoro, Michael D., The Application of External Knowledge: Organizational Conditions for Exploration and Exploitation. Journal of Management Studies, Vol. 46, Issue 3, pp. 481-509, May 2009. Available at SSRN: https://ssrn.com/abstract=1378336 or http://dx.doi.org/10.1111/j.1467-6486.2009.00829.x

Paul E. Bierly (Contact Author)

James Madison University - College of Business ( email )

ZSH 541
Harrisonburg, VA 22807
United States
540-568-3236 (Phone)

Fariborz Damanpour

Rutgers Business School, Newark ( email )

111 Washington Street
Newark, NJ 07102
United States

Michael D. Santoro

Lehigh University - Department of Management ( email )

Bethlehem, PA 18015
United States

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