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Network Position and Exploratory Knowledge Creation: Evidence from US IT Clusters

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Network Position and Exploratory Knowledge Creation: Evidence from US IT Clusters HEC MONTRÉAL École affiliée à l’Université de Montréal Network Position and Exploratory Knowledge Creation: Evidence from US IT Clusters YANG GAO Master of Science in International Business February 2017 © YANG GAO, 2017 Abstract In This study, I explore the effects of structures of technological alliance networks on firms’ exploratory knowledge creation. The research is built upon the connections between social network, organizational learning, and organizational ambidexterity theories. Firms pursue knowledge creation opportunities by forming technological alliances, but no consensus has been reached regarding the optimum strategy of alliance formation activities, i.e., whether the return of knowledge creation always increases in tandem with numbers of alliances or it diminishes at some point due to various factors such as costs of maintaining ties and capabilities of absorb information and knowledge generated from alliances. The study sheds light on the controversy of whether the relationship between network structures and knowledge creation is positive or curvilinear by distinguishing different orientations of knowledge creation activities, which entail different network structures and strategies. More specifically, by extracting exploratory knowledge creation from the overall knowledge creation activities, the relationship between basic network position features and exploration is more focused and accurate. Empirical investigation, which uses hand-collected data of alliance activities and patent application behaviors of 67 firms in several IT clusters in US, proves the curvilinear relationship between alliance network centrality and exploratory knowledge creation. Results of the study help to address the conflicts of networks’ effects on knowledge creation with new evidence from knowledge intensive industries, and provided insights on organizational learning and firm innovation strategies. Key words: Exploratory knowledge creation, social network structures, centrality, innovation strategy i Table of Contents Abstract .......................................................................................................................................................... i Table of Contents .......................................................................................................................................... ii List of Tables and Figures ............................................................................................................................ iv Acknowledgements ....................................................................................................................................... v 1. Introduction ........................................................................................................................................... 1 1.1 Academic Context ......................................................................................................................... 1 1.2 Research Question ......................................................................................................................... 4 1.3 Contribution ................................................................................................................................... 4 1.4 Outline ........................................................................................................................................... 5 2. Literature Review .................................................................................................................................. 6 2.1 Knowledge and Learning ............................................................................................................... 6 2.2 Organizational Learning ................................................................................................................ 7 2.2.1 Knowledge Creation............................................................................................................. 12 2.2.2 Knowledge Sharing .............................................................................................................. 14 2.2.3 Knowledge Retention ........................................................................................................... 16 2.3 Social Networks and Organizational Learning ............................................................................ 17 2.3.1 Social Networks ................................................................................................................... 17 2.3.2 Social Networks and Knowledge Creation .......................................................................... 18 2.3.3 Social Networks and Knowledge Sharing ............................................................................ 19 2.3.4 Social Networks and Knowledge Retention......................................................................... 20 2.4 Limitations of Previous Studies ................................................................................................... 24 2.5 Exploration and Exploitation ....................................................................................................... 25 2.6 Exploration, Exploitation, and Social Networks.......................................................................... 29 2.6.1 Organizational Structures of Exploration and Exploitation ................................................. 29 2.6.2 Effects of Social Networks ................................................................................................... 30 3. Conceptual Framework and Methodology .......................................................................................... 32 3.1 Conceptual Framework ................................................................................................................ 32 3.2 Key Hypothesis ............................................................................................................................ 34 3.3 Research Setting .......................................................................................................................... 36 3.4 Sample and Data .......................................................................................................................... 37 3.5 Measurement................................................................................................................................ 38 3.5.1 Dependent Variable .............................................................................................................. 38 3.5.2 Explanatory Variable ........................................................................................................... 39 3.5.3 Control Variables ................................................................................................................. 40 ii 4. Results ................................................................................................................................................. 47 5. Discussion ........................................................................................................................................... 48 6. Conclusion .......................................................................................................................................... 53 References ................................................................................................................................................... 54 Appendix 1 .................................................................................................................................................. 64 Appendix 2 .................................................................................................................................................. 70 Appendix 3 .................................................................................................................................................. 72 Appendix 4 .................................................................................................................................................. 80 iii List of Tables and Figures Table 1 Comparison of Different Views of Organizational Learning .......................................................... 9 Table 2 Models of Processes of Organizational Learning .......................................................................... 11 Table 3 Summary of Studies of Relationships between Social Networks and Organizational Learning ... 22 Table 4 Summary of Different Views of Organizational Ambidexterity.................................................... 28 Table 5 Variable Descriptions .................................................................................................................... 43 Table 6 Correlation Matrix ......................................................................................................................... 45 Table 7 Results of Linear Regression Analysis of Exploratory Knowledge Creation ................................ 46 Figure 1 Influential factors of Knowledge Creation ................................................................................... 14 Figure 2 Influential factors of Knowledge Sharing..................................................................................... 16 iv Acknowledgements I would like to thank my directors, Professor Ari Van Assche and Professor Ekaterina Turkina, for sharing their expertise and insights on the topic, as well as providing me with ongoing guidance throughout the entire thesis
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