How to Find Answers within Your Company

Abstract

Internal markets can improve knowledge sharing, information exchange, forecasting, innovation, and productivity within the firm. Despite their widespread popularity, however, the strategies to implement and manage markets inside organizational boundaries are not well understood. This article provides a design framework for developing knowledge markets inside firms; it provides a stage model or ‘life cycle’ of internal market development, and explores critical issues at each stage. Our framework proceeds from an analysis of more than three dozen firm implementations, and builds on three economic theories: price theory, monetary theory, and two-sided network theory. For each stage of implementation, the framework outlines the challenges faced by firms studied and identifies solutions to make knowledge markets work. The resulting blueprint adds rigor to the difficult tasks of measuring, valuing, and stimulating the production of information.

Keywords: Knowledge Markets, Internal Crowdsourcing, Virtual Currencies, Information Markets, Knowledge Management Systems, Productivity, Internal Markets, Two-Sided Networks, Price Theory, Monetary Policy, Incentives, IT Adoption, Measurement

JEL Classification: D8, E31, E52, L86, M10, O31, O32, O42