Reconfiguring a firm’s knowledge: three essays on how different modes to reconfigure knowledge impact the value of innovation

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This work analyses the implications of different modes that a firm can choose to reconfigure its knowledge base across different knowledge domains, have on the quality of innovation it generates. We consider two knowledge domains, one established, which represents the firm’s domain of operation; one emerging, which represents a knowledge domain that is new to the firm and different from its domain of operation. In terms of reconfiguration, knowledge elements can either flow from the emerging domain into the firm in order to be applied to innovate in the established domain, a process known as knowledge search, or from the firm into the emerging domain in order to innovate there, a process known as knowledge deployment. The first two chapters of this work take the former perspective, the third one the latter. The first chapter describes how different search modes that firms may adopt to acquire new knowledge elements from an emerging knowledge domain impact the quality of new products that apply the in the established. We identify direct and indirect search as two modes that firm may adopt to acquire knowledge from the same emerging domain, and we propose a “U” shaped relation between the intensity of direct search and quality of innovation, and an inverted “U” shape relation between the intensity of indirect search and the quality of innovation. Furthermore, we show that, when direct and indirect search are adopted simultaneously both non-linear relations are attenuated. Although it is known that firms searching for new knowledge in an external knowledge domain may have ex ante incentives to acquire knowledge elements that can be either general or specialized in nature, it is not clear what are the ex post consequences on quality of innovation of choosing one type over the other. The second chapter takes the perspective of a firm that initiates a search for new knowledge in a new external domain and considers the characteristics in terms of generality of the first elements acquired from that domain, in order to highlight implications on quality of innovation that applies the new external knowledge. We propose that the level of generality of the first element acquired from a new domain positively affects not only to the quality of inventions generated adopting this element directly, but also the quality of inventions generated adopting elements acquired subsequently from the same domain. Nevertheless, the positive effect of generality of the first element diminishes with the number of elements acquired from the same domain and with their level of generality. The third paper changes perspective and considers the implications for the quality of innovation that a firm generates in the emerging domain, when choosing different modes for reconfiguring the knowledge it has developed in the established domain. Knowledge reconfiguration from an established to an emerging domain can happen via codeployment, when a knowledge element from the established domain is applied in the emerging domain while being continuously applied also in the established domain, or via transfer, when a knowledge element from the established domain is applied in the emerging domain but its application in the established domain is discontinued. These two modes for reconfiguring across domains might be combined with modes for reconfiguring within the emerging domain, such as recombining or discarding elements. For each mode, or combination of modes, we identify the impact on quality of innovation according to the relatedness between the established and the emerging domain, and we compare the outcome of transfer with the outcome of codeployment at each level of relatedness. Our results suggest that, in order to obtain superior innovation, firms that enter an emerging domain should evaluate transfer versus codeployment according to the relatedness of the two domains and to the reconfiguration activity they plan to conduct within the emerging domain