The Impact of Knowledge Transfer on Investment in Knowledge Creation in Firms

Posted: 7 Dec 2021

See all articles by Ivo Tafkov

Ivo Tafkov

Georgia State University

Kristy L. Towry

Emory University

Flora H. Zhou

Bentley University

Date Written: September 27, 2021

Abstract

Knowledge is key to success in the modern business landscape. Firms invest billions of dollars every year in knowledge management systems, which commonly use artificial intelligence to allow within-firm knowledge transfer to occur automatically. Despite this investment, these systems often fall short of producing expected results. Using psychology theory on goal dilution, we argue that a potential cause of the failure is that the prospect of knowledge transfer has a negative effect on knowledge creation. We further propose a mechanism to mitigate that effect. Specifically, we predict that the negative effect of knowledge transfer on knowledge creation will be mitigated when the linkages among firm- and unit-level goals are communicated. We conduct an experiment and find that while, as predicted, the prospect of knowledge transfer has a negative effect on knowledge creation when the linkages among firm- and unit-level goals are not communicated, it has the predicted positive effect when the linkages among firm- and unit-level goals are communicated due to increased goal congruence. Additional analyses provide support for our underlying theories. Our results suggest that firms can adopt and communicate strategic performance measurement systems to improve the knowledge creation in a firm.

Keywords: knowledge creation, knowledge transfer, communication of goal linkages, goal dilution, goal congruence

Suggested Citation

Tafkov, Ivo and Towry, Kristy L. and Zhou, Flora H., The Impact of Knowledge Transfer on Investment in Knowledge Creation in Firms (September 27, 2021). Contemporary Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3938795

Ivo Tafkov

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Kristy L. Towry (Contact Author)

Emory University ( email )

Goizueta Business School
1300 Clifton Road
Atlanta, GA 30322
United States
404-727-4895 (Phone)

Flora H. Zhou

Bentley University ( email )

175 Forest Street
Waltham, MA 02145
United States

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