Inter-organizational design: exploring the relationship between formal architecture and ICT investments
This chapter aims to explore how the information-processing capabilities that emerge from a network structure affect the diffusion of innovation in a multidivisional organization. In particular, this study analyzes the role of firm investments in ICT to facilitate communication and knowledge diffusion. Using a qualitative approach, we investigate the behavior of an Italian multinational firm, Engineering S.p.A., analyzing our data using a content analysis procedure. Our results show the limited role of ICT in favoring knowledge exchange both inside and outside the firm’s divisions: traditional communication patterns are generally preferred over the use of technologies for information sharing. Additionally, we find that key individuals who play a central role in the firm’s communication network are unable to use ICTs for knowledge transfer. We conclude that this is the result of a strategic decision to keep top management practically unchanged since the firm was established. Therefore, key individuals act as filters to knowledge flows. Knowledge, in particular tacit knowledge, is transferred from key individuals to other actors through face-to-face contacts, thereby creating a diseconomy for the organization.
KeywordsTacit Knowledge Knowledge Flow Knowledge Diffusion Strategic Management Journal Organizational Inertia
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