Knowledge Transfer In Multi-Organizational Networks: Influence Of Causal and Outcome Ambiguities SEDSI Jennifer Lewis Priestley, Assistant Professor of

Knowledge Transfer In Multi-Organizational Networks: Knowledge Transfer In Multi-Organizational Networks: Influence Of Causal and Outcome AmbiguitiesInfluence Of Causal and Outcome Ambiguities

SEDSISEDSI

Jennifer Lewis Priestley,Jennifer Lewis Priestley,

Assistant Professor of Applied MathematicsAssistant Professor of Applied Mathematics

February 24, 2005February 24, 2005

Presentation OutlinePresentation Outline

1.1. Inter-Organizational Knowledge TransferInter-Organizational Knowledge Transfer2.2. The Role of Ambiguity in Knowledge TransferThe Role of Ambiguity in Knowledge Transfer

a)a) Causal AmbiguityCausal Ambiguityb)b) Outcome AmbiguityOutcome Ambiguity

3.3. Network TypesNetwork Types4.4. Research ModelResearch Model5.5. Empirical ResultsEmpirical Results6.6. Conclusions and ImplicationsConclusions and Implications

Inter-Organizational Knowledge TransferInter-Organizational Knowledge Transfer

Knowledge creates competitive advantage (Knowledge creates competitive advantage (e.g., e.g.,

Hamel, Doz and Prahalad, 1989; Szulanski, 1996; Teece, 1998Hamel, Doz and Prahalad, 1989; Szulanski, 1996; Teece, 1998))

Firms engage in networks, in part to access Firms engage in networks, in part to access knowledge (knowledge (e.g., e.g., Madhavan, 1998; Madhavan, 1998; Gulati and Gargiulo, 1999Gulati and Gargiulo, 1999 )…)…

… …because research has demonstrated that because research has demonstrated that network-membership is superior to independent network-membership is superior to independent operation for the purposes of knowledge access operation for the purposes of knowledge access ((e.g., Argote, 1999; Dyer, 1997; Hamel, 1991e.g., Argote, 1999; Dyer, 1997; Hamel, 1991))


Specific examples of knowledge transfer Specific examples of knowledge transfer studies within networks:studies within networks:

Powell et al., 1996 – study of biotech firmsPowell et al., 1996 – study of biotech firms

Darr et al., 1995 – study of pizza franchisesDarr et al., 1995 – study of pizza franchises

Ingram and Simons, 2002 – study of kibbutzimIngram and Simons, 2002 – study of kibbutzim

Postrel, 2002 – recounting of the 1999 Mars Postrel, 2002 – recounting of the 1999 Mars Climate OrbiterClimate Orbiter


These very different networks experienced These very different networks experienced knowledge transfer very differently. knowledge transfer very differently.

They accommodated different levels of They accommodated different levels of competition, different types of governance competition, different types of governance structures and had different objectives. structures and had different objectives.

They also experienced “isolating They also experienced “isolating mechanisms” mechanisms” ((Knott, 2004Knott, 2004) of knowledge transfer – ) of knowledge transfer – like ambiguity like ambiguity – differently. – differently.

Ambiguity and Knowledge TransferAmbiguity and Knowledge Transfer

Knowledge Transfer is “sticky” (Knowledge Transfer is “sticky” (e.g., Von Hippel, 1994; e.g., Von Hippel, 1994;

Szulanski, 1996Szulanski, 1996).).

A primary isolating mechanism is ambiguity (A primary isolating mechanism is ambiguity (e.g., e.g.,

Knott, 2004; Szulanski, 1996Knott, 2004; Szulanski, 1996))

Previous research has either addressed the Previous research has either addressed the well-established concept of causal ambiguity well-established concept of causal ambiguity ((e.g., Mosakowski, 1997; Szulanski, 1996) e.g., Mosakowski, 1997; Szulanski, 1996) or ambiguity in its or ambiguity in its most general formmost general form (e.g. Milliken, 1987 (e.g. Milliken, 1987)…)…

Ambiguity and Knowledge TransferAmbiguity and Knowledge Transfer

……however, no theoretical guidance exists that however, no theoretical guidance exists that provides for an understanding of how ambiguity provides for an understanding of how ambiguity impedes (or enhances) inter-organizational impedes (or enhances) inter-organizational knowledge transfer, and how different types of knowledge transfer, and how different types of networks would be expected to experience networks would be expected to experience ambiguities differently.ambiguities differently.

Causal AmbiguityCausal Ambiguity

InputsInputs

XX11

XX22

XX33

..

..

..XXnn

InputsInputs

XX11

XX22

XX33

..

..

..XXnn

OutcomesOutcomes

OutcomeOutcome11

OutcomeOutcome22

OutcomeOutcome33

..

..

..OutcomeOutcomenn

OutcomesOutcomes

OutcomeOutcome11

OutcomeOutcome22

OutcomeOutcome33

..

..

..OutcomeOutcomenn

Causal Causal FactorsFactors

FactorFactor11

FactorFactor22

FactorFactor33

..

..FactorFactornn

Causal Causal FactorsFactors

FactorFactor11

FactorFactor22

FactorFactor33

..

..FactorFactornn


Causal Ambiguity has been studied from Causal Ambiguity has been studied from two perspectives:two perspectives:

Internal causal ambiguity (Internal causal ambiguity (e.g., Knott, 2005; e.g., Knott, 2005;

Szulanski, 1996Szulanski, 1996)) External causal ambiguity (External causal ambiguity (e.g., Lippman and e.g., Lippman and

Rumelt, 1982; Wilcox-King and Zeithaml, 2001Rumelt, 1982; Wilcox-King and Zeithaml, 2001))

Universally considered an isolating Universally considered an isolating mechanism…however only studied in an mechanism…however only studied in an

intra-organizational or dyadic context.intra-organizational or dyadic context.


H1:H1: Causal Ambiguity will negatively affect knowledge transfer Causal Ambiguity will negatively affect knowledge transfer for firms operating within an inter-organizational network.for firms operating within an inter-organizational network.H1:H1: Causal Ambiguity will negatively affect knowledge transfer Causal Ambiguity will negatively affect knowledge transfer for firms operating within an inter-organizational network.for firms operating within an inter-organizational network.

Outcome AmbiguityOutcome Ambiguity

Other than “Causal”, the concept of ambiguity Other than “Causal”, the concept of ambiguity has been studied from a very generalized has been studied from a very generalized perspectiveperspective (e.g., Milliken, 1987; Gerloff, et al., 1991).

Organizations join large-scale multi-Organizations join large-scale multi-organizational networks, to cope with organizational networks, to cope with environmental uncertaintiesenvironmental uncertainties (Gulati and Gargiulo,1999)…

……however, participation in a network may however, participation in a network may produce unintended consequences of increased produce unintended consequences of increased uncertainty not captured in the uncertainty not captured in the extant literatureextant literature.


……Specifically, there is ambiguity associated Specifically, there is ambiguity associated with the inability of the knowledge source to with the inability of the knowledge source to identify the possible outcome(s) associated with identify the possible outcome(s) associated with knowledge transfer.knowledge transfer.

Particularly relevant in a multi-organizational Particularly relevant in a multi-organizational environment.environment.

Two sources of this ambiguity:Two sources of this ambiguity: ““Unprovenness” of the knowledge in question Unprovenness” of the knowledge in question

(Szulanski, 1996)(Szulanski, 1996) Source/Recipient Relationship (e.g., Source/Recipient Relationship (e.g., Simonin, 1999; Simonin, 1999;

Hamel,1991) Hamel,1991)

Outcome Ambiguity - TypologyOutcome Ambiguity - TypologyP

rove

nn

ess

of

Kn

ow

led

ge

Pro

ven

nes

s o

f K

no

wle

dg

e Hig

hH

igh

Lo

wL

ow

Knownness of Recipient’s ActionsKnownness of Recipient’s ActionsLowLow HighHigh

Type 3Type 3(Medium Outcome Ambiguity)(Medium Outcome Ambiguity)


Type 4Type 4(High Outcome Ambiguity)(High Outcome Ambiguity)

Type 4Type 4(High Outcome Ambiguity)(High Outcome Ambiguity)

Type 1Type 1(Low Outcome Ambiguity)(Low Outcome Ambiguity)

Type 1Type 1(Low Outcome Ambiguity)(Low Outcome Ambiguity)




H2:H2: Outcome Ambiguity will negatively affect knowledge Outcome Ambiguity will negatively affect knowledge transfer for firms operating within an inter-organizational transfer for firms operating within an inter-organizational network.network.

H2:H2: Outcome Ambiguity will negatively affect knowledge Outcome Ambiguity will negatively affect knowledge transfer for firms operating within an inter-organizational transfer for firms operating within an inter-organizational network.network.

OutcomeOutcomeAmbiguityAmbiguityOutcomeOutcome

AmbiguityAmbiguity

-

-Inter-Organizational Inter-Organizational

KnowledgeKnowledgeTransferTransfer

Causal Causal AmbiguityAmbiguity


H1:

H2:

Partial Research ModelPartial Research Model

Network TypesNetwork Types

TCE – in a world of transaction costs, some TCE – in a world of transaction costs, some

governance forms are better than othersgovernance forms are better than others (e.g. (e.g. Williamson, 1973)Williamson, 1973)

KBV – Firms organize to optimize deployment KBV – Firms organize to optimize deployment of resources…with knowledge recognized as a of resources…with knowledge recognized as a firm’s most important resourcefirm’s most important resource (e.g. Grant, 1997)(e.g. Grant, 1997)

SNT – the “nodes” and “linkages” of SNT – the “nodes” and “linkages” of networks should be understood to explain networks should be understood to explain organizational behavior organizational behavior (e.g. Granovetter, 1985)(e.g. Granovetter, 1985)

Network TypesNetwork Types

DecentralizedDecentralized CentralizedCentralized

Lo

wL

ow

Hig

hH

igh

Governance StructureGovernance Structure

Inte

ns

ity

of

Co

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eti

tio

nIn

ten

sit

y o

f C

om

pe

titi

on

Co-opetive Network Co-opetive Network TypeType

Co-opetive Network Co-opetive Network TypeType

Franchise Network Franchise Network TypeType

Franchise Network Franchise Network TypeType

Network Types and Causal AmbiguityNetwork Types and Causal Ambiguity

The Franchise NetworkThe Franchise Network Centralized governance structure expected to have authority to Centralized governance structure expected to have authority to

punish for non-compliance, establish branding, enforce image punish for non-compliance, establish branding, enforce image and quality controls, standardize customer experience, etc.and quality controls, standardize customer experience, etc.

Common processes and experiences would be expected to lead Common processes and experiences would be expected to lead to a common understanding of the inputs and factors needed to to a common understanding of the inputs and factors needed to generate specific outcomes. generate specific outcomes.

The Co-opetive NetworkThe Co-opetive Network Although common operations, “external” causal ambiguity may Although common operations, “external” causal ambiguity may

actually be a goal of organizations engaged in an environment actually be a goal of organizations engaged in an environment rife with the threat of opportunistic behavior and a decentralized rife with the threat of opportunistic behavior and a decentralized governance lacking the authority to punish.governance lacking the authority to punish.

Network Type and Causal AmbiguityNetwork Type and Causal Ambiguity

H3:H3: Firms engaged in a co-opetive network will experience Firms engaged in a co-opetive network will experience greater causal ambiguity than will firms engaged in a franchise greater causal ambiguity than will firms engaged in a franchise network.network.

H3:H3: Firms engaged in a co-opetive network will experience Firms engaged in a co-opetive network will experience greater causal ambiguity than will firms engaged in a franchise greater causal ambiguity than will firms engaged in a franchise network.network.

H3a:H3a: Firms operating outside of a network will experience Firms operating outside of a network will experience greater causal ambiguity than will firms engaged in a network.greater causal ambiguity than will firms engaged in a network.H3a:H3a: Firms operating outside of a network will experience Firms operating outside of a network will experience greater causal ambiguity than will firms engaged in a network.greater causal ambiguity than will firms engaged in a network.

Network Types and Outcome AmbiguityNetwork Types and Outcome Ambiguity

The Franchise NetworkThe Franchise Network The “shared destiny” (Kogut and Zander, 1996; Adler, 2001) within a The “shared destiny” (Kogut and Zander, 1996; Adler, 2001) within a

franchise network would be expected to contribute to a high degree of franchise network would be expected to contribute to a high degree of “knownness” of the actions of the knowledge recipients.“knownness” of the actions of the knowledge recipients.

The highly centralized governance structure would also be expected to The highly centralized governance structure would also be expected to contribute to a high degree of “knownness” of the actions of the contribute to a high degree of “knownness” of the actions of the knowledge recipients.knowledge recipients.

Common operational processes would be expected to contribute to a Common operational processes would be expected to contribute to a high degree of “knownness” of the application of the knowledge in high degree of “knownness” of the application of the knowledge in question.question.

The Co-opetive NetworkThe Co-opetive Network Because membership may be justified through shared risk/costs of Because membership may be justified through shared risk/costs of

research, knowledge in question may be proven or unproven.research, knowledge in question may be proven or unproven. Given the decentralization of authority and the potential for opportunistic Given the decentralization of authority and the potential for opportunistic

behavior, the “knownness” of the actions of the knowledge recipients behavior, the “knownness” of the actions of the knowledge recipients would be low.would be low.

Network Type and Outcome AmbiguityNetwork Type and Outcome Ambiguity

H4:H4: Firms engaged in a co-opetive network will experience Firms engaged in a co-opetive network will experience greater outcome ambiguity than will firms engaged in a greater outcome ambiguity than will firms engaged in a franchise network.franchise network.

H4:H4: Firms engaged in a co-opetive network will experience Firms engaged in a co-opetive network will experience greater outcome ambiguity than will firms engaged in a greater outcome ambiguity than will firms engaged in a franchise network.franchise network.

H4a:H4a: Firms operating outside of a network will experience Firms operating outside of a network will experience greater outcome ambiguity than will firms engaged in a network.greater outcome ambiguity than will firms engaged in a network.H4a:H4a: Firms operating outside of a network will experience Firms operating outside of a network will experience greater outcome ambiguity than will firms engaged in a network.greater outcome ambiguity than will firms engaged in a network.

H3a

: M>C

&F

H3a

: M>C

&F

H4a: M>C&F

H4a: M>C&F

H4: C

>F

H4: C

>F

H3: C>FH3: C>F

Co-opetiveCo-opetiveNetworkNetwork

(C)(C)

FranchiseFranchiseNetworkNetwork

(F)(F)

OutcomeOutcomeAmbiguityAmbiguityOutcomeOutcome

AmbiguityAmbiguity

-- Inter-Organizational Inter-Organizational

KnowledgeKnowledgeTransferTransfer



Market-based Market-based OrganizationsOrganizations

(M)(M)

H1:H1:

H2:H2:

Comprehensive Research ModelComprehensive Research Model

“…“…there is a growing realization that the variables which there is a growing realization that the variables which are most theoretically Interesting are those which are are most theoretically Interesting are those which are least identifiable and measurable.”least identifiable and measurable.”

Spender and Grant (1996)Spender and Grant (1996)

Research SummaryResearch Summary

Franchise Network selected = SunTrust Branch Network Franchise Network selected = SunTrust Branch Network in Metropolitan Atlanta Area (n=165).in Metropolitan Atlanta Area (n=165).Co-opetive Network selected = Credit Union National Co-opetive Network selected = Credit Union National Association (CUNA) (n=~600 in research target).Association (CUNA) (n=~600 in research target).Surveys were pre-piloted and then piloted with some Surveys were pre-piloted and then piloted with some measurement items added or deleted as warranted.measurement items added or deleted as warranted.Total of 101 surveys received from CUNA (68 identifying Total of 101 surveys received from CUNA (68 identifying as integrated members and 33 identifying as non-as integrated members and 33 identifying as non-members) and 70 surveys received from SunTrust.members) and 70 surveys received from SunTrust.Non-response bias testing performed.Non-response bias testing performed.Common method bias testing performed.Common method bias testing performed.PLS used over SEM.PLS used over SEM.

Empirical ResultsEmpirical Results

NetworkNetwork Ambiguity Ambiguity Factor(s)Factor(s)

Path Path Coefficient Coefficient (Model R2) (Model R2)

t-valuet-value Hypothesis Supported?Hypothesis Supported?

All(n=171)

Causal AmbiguityOutcome Ambiguity

.057

.377(.164)

t=.814t=4.13*

Hypothesis 2 supported, but Hypothesis 1 not supported.

Co-opetive (n=68)


.029

.467(.203)

t=.713t=2.78*

Franchise

(n=70)


.147

.563(.395)

t=.676t=3.77*

Empirical ResultsEmpirical ResultsHypothesisHypothesis Franchise Franchise

ScoreScoreCo-opetive Co-opetive

ScoreScoreControl Control ScoreScore

SupportedSupported??

Hypothesis 3 – Hypothesis 3 – Firms engaged in a co-Firms engaged in a co-opetive network will experience greater opetive network will experience greater causal ambiguity than will firms engaged causal ambiguity than will firms engaged in a franchise networkin a franchise network

3.55 3.95 N

Hypothesis 3a – Hypothesis 3a – Firms operating outside Firms operating outside of a network will experience greater of a network will experience greater causal ambiguity than will firms causal ambiguity than will firms engaged in a networkengaged in a network

4.48 Y**/N

Hypothesis 4 – Hypothesis 4 – Firms engaged in a co-Firms engaged in a co-opetive network will experience greater opetive network will experience greater outcome ambiguity than will firms outcome ambiguity than will firms engaged in a franchise networkengaged in a franchise network

2.81 3.56 Y**

Hypothesis 4a – Hypothesis 4a – Firms operating outside Firms operating outside of a network will experience greater of a network will experience greater causal ambiguity than will firms causal ambiguity than will firms engaged in a networkengaged in a network

4.39 Y***/Y*

* significant at p<.1 ** significant at p<.05 *** significant at p<.01

Conclusions and ImplicationsConclusions and Implications

Study goal was to more specifically define and further Study goal was to more specifically define and further develop the ambiguities that contribute to inter-develop the ambiguities that contribute to inter-organizational KT.organizational KT. Because of the ambiguity gap between “general” Because of the ambiguity gap between “general” discussions and causal ambiguity, we developed the discussions and causal ambiguity, we developed the concept of “outcome ambiguity”.concept of “outcome ambiguity”.Although CA was found to be significant when tested as a Although CA was found to be significant when tested as a single variable, it became insignificant to KT when OA was single variable, it became insignificant to KT when OA was introduced, providing some proof for the need for its introduced, providing some proof for the need for its existence.existence.There was no difference found to exist in CA between the There was no difference found to exist in CA between the two network types. two network types. OA was found to vary significantly between the two network OA was found to vary significantly between the two network types.types.

Questions? Comments? Discussion?Questions? Comments? Discussion?

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Knowledge Transfer In Multi-Organizational Networks: Influence Of Causal and Outcome Ambiguities SEDSI Jennifer Lewis Priestley, Assistant Professor of