Individual Connectedness in Innovation Networks - Essay Example

?Interpretation and Evaluation of Journal Paper: Aalbers, R., Dolfsma, W., Koppius, O., , Individual connectedness in innovation networks: On the role of individual motivation, Research Policy, Vol. 42, pp. 624-634. Introduction Knowledge Management1 is an important aspect in organisations nowadays. Knowledge management addresses how organizations can manage the knowledge which exists in their systems and the knowledge that is possessed by the employees. It also systematically considers how advanced information technology can be used to leverage existing knowledge and create new knowledge. The research paper focuses on how individual motivation, connectedness and inter/intra-unit ties is important in knowledge transfer between individuals in organisations. Knowledge transfer and has recently been gaining a lot of importance since firms are finding themselves in increasingly competitive markets and are realizing their need to be more creative and innovative. Its importance has grown in recent decades for three related reasons. First, knowledge appears to be an increasing proportion of many organizations total assets2. Second, organizations have moved away from hierarchical methods of control toward more decentralized organizational structures and increased employee involvement. This has resulted in more knowledge transfer as employees are more involved in the decision making of the companies and has reduced organizational paths through which information travels. Finally, advances in information technology have created new means of knowledge transfer. The paper discusses how knowledge transfer is important for promoting innovation and creativity in organisations. Employees can be influenced by actions taken by the organisations to transfer knowledge so as to reach favourable outcomes. This can be done by an understanding of both what motivates the individual to transfer knowledge, as well as, structurally, with whom individuals exchange knowledge; the former is relevant to development of proper HRM policy to stimulate knowledge while the latter is indicated by an individual’s position in the knowledge transfer network of an organization. The paper also discusses how individual motivation may explain an individual’s position in the structure of the network in which innovative knowledge is transferred. Individuals that are more connected within the full knowledge transfer network of an organisation contribute significantly and lead to more innovative outcomes for the organisation. The concept of closeness centrality is used to indicate the individual’s position in the full knowledge transfer network, rather than merely observing their immediate connections. The connections an individual has may be within the own unit, while also knowledge transferred from other units, crossing unit boundaries, is believed to contribute to innovation in an important way. Transfer of knowledge in a multi-unit organisation may be difficult than transfer of knowledge in a unit that specializes in one knowledge field. This is because in a multi-unit organisation, the employees have limited information as to what activities and knowledge other employees have or are engaged in. Within a unit that specializes in one knowledge field, knowledge may also be of the tacit3 kind. Thus an individual’s capacity to contribute to the innovation processes in a firm then depends not just on his own (absorptive) capacity originating from earlier experiences, but also depends on the social, professional and hierarchical relations within the organization. If one is not well-connected one’s contribution to knowledge transfer and thus the innovation process can be limited. Well-connected individuals can gain information of higher accuracy, van gain diverse knowledge and can collect and spread existing information more rapidly, but can also recombine existing ideas and knowledge in a novel way thus being more creative. Individual motivation is important factor for knowledge transfer as it basically gives employees the incentive to transfer their knowledge. The two main classes of motivation that have been discussed are extrinsic and intrinsic motivation. Extrinsic4 motivation focuses on the goal-driven reasons, e.g. rewards or benefits earned when performing an activity. Intrinsic5 motivation indicates the pleasure and inherent satisfaction derived from a specific activity. In the case of extrinsic motivation, the sharing of knowledge will keep on occurring till the employee receives more benefits than the effort they put to share it. However, intrinsic motivation is more of a selfless act and employees who are motivated by it will keep sharing knowledge without hoping for any benefits, thus leading to more creativity and innovation. Intrinsically motivated employees are more socially integrated; they provide information without any demands and can be approached more frequently. Inter6/Intra7-unit relations might also be important for knowledge transfer according to the paper. Having inter-unit relations gives more exposure to the employee but these relations require effort and cost to keep thus they might only be motivated by extrinsic motivation. But inter unit relations are more uncertain than intra unit relations and may lead to fewer results when compared to intra unit relations. The research questions are focusing on how motivation affects the ties of an individual with the organisations and the knowledge sharing network. Data was collected from two companies in very different industries to ensure that the data was diverse and robust. One company studied is a subsidiary of a European electronics and engineering conglomerate (Alpha Company), the other is a leading European financial service provider (Beta Company). Interviews were conducted with managers and employees to gain familiarity with the company and thus gain input for the proper design of the network survey and second, to determine the appropriate response group within the company. Snowball sampling8 done for the research paper has a few shortcomings; it can lead to a community bias, it can only give us a vague idea of the overall sampling size and it can lead to wrong anchoring. Major Statistics For each of the employees taking part in the knowledge transfer network, input was collected for different variables. The innovative knowledge transfer network was measured by asking individual respondents with whom they initiate a discussion of new ideas, innovations and improvements regarding products and services their unit offered. The study included a collection of independent9, dependent10 and control11 variables. The dependent variables included the individual connectedness and the number of inter-unit ties. Individual connectedness is an important factor and was measured as by means of an individual’s closeness centrality. Closeness centrality means how many steps it takes for an individual to reach everyone else in the organization. A high closeness centrality means that the individual can make the most efficient contact with everyone in the network and is better positioned than other employees in dispersing information to other employees. An individual’s closeness centrality is the inverse of an individual’s closeness score, which is calculated as the sum of graph-theoretic distances from all other individuals in the network, where the distance from one individual to another is defined as the length (in links) of the shortest path from one to the other. Closeness is an inverse measure of centrality; a larger value indicates a less central actor while a smaller value indicates a more central actor. The number of inter-unit ties was constructed based on the number of ties of the individual outside the unit, inside the boundaries of the organization that the individual employee maintained in the previous three months. The independent variables include intrinsic and extrinsic forms of motivation. The questions of the inventory are specifically aimed to assess the major elements of intrinsic motivation which means that motivation is driven by interest or enjoyment in the task itself, to fulfil one’s curiosity and to satisfy one’s self-determination rather than relying on external pressures or desire for rewards, and extrinsic motivation which basically refers to the performance of an activity in order to attain an outcome like money or other tangible incentives, to gain recognition or to stifle competition. The control variables included four variables: tenure (in months), gender, unit membership, and number of ties per individual employee. These variables are relevant as the tenure included the effect of time in developing relationship, gender and unit membership were added to control for group affiliation effects. Number of ties per individual employee was included to control for the effect of individual network size and the corresponding costs involved in maintaining or possibly increasing the number of connections. The results of proposition 1 relating motivation and closeness centrality give meaningful results. In models A1 and B1 the number of unit ties have not been introduced. In models A2 and B2, number of unit ties have been introduced, controlling for the specific effect of number of ties as a proxy of an individual’s economic investments into his social infrastructure. After this in models A3 and B3, intrinsic motivation is introduced. The inclusion of intrinsic motivation in explaining individual connectedness results in a significant improvement to the regression model at Beta Company (Model B3; F-test for _R2 = 4.645, p < .05), identifying the relationship as significant (Model B3; beta = ?.278, p < .05). The sign for the effect found in the case of Alpha Company is actually opposite to the one found for Beta Company; the effects found for Beta Company are not statistically significant, however. This means intrinsic motivation actually has an adverse effect on Alpha Company while in Beta Company it has a positive yet insignificant effect. Introduction of extrinsic motivation in A4 and B4 models does not significantly improve B4’s result as compared to B3 results. A significant positive relationship between extrinsic motivation and connectedness, however, does show for Alpha Company (Model A4; beta =?.419, p < .01). Thus Proposition 1 cannot be supported as the results for both the companies is different, indicating that different elements maybe involved between motivation and involvemenet in knowledge transfer. Furthermore, tenure and number of unit ties does not affect an individual’s relations and closeness centrality. The second proposition focuses on motivation and inter-unit ties. Inter-unit ties have been previously found to contribute to innovation. Contrary to expectation, neither intrinsic nor extrinsic motivation of individuals predicts their involvement in knowledge transfer across unit boundaries. The third and fourth model that add the motivation variables in comparison to the base models 1 and 2 offer no significant improvement to both Alpha and Beta Companies, instead they affect the outcome adversely. Thus proposition 2 that suggests that the number of inter-unit ties an individual holds in the full innovative knowledge transfer network is positively influenced by their extrinsic motivation must be rejected. In the table of Proposition 2, it can be clearly seen that the number of unit ties which is entered as a control variable affects inter-unit ties an individual maintains in the innovation networks at both companies. Statistically, the relation remains significant in each of the models where this variable is included. Gender negatively impacts the number of inter-unit ties an individual has in a statistically significant way only for Beta Company. Also departmental affiliation appears to matter in explaining the maintenance of inter-unit ties at Beta Company only. Again it can be seen that tenure does not affect the number of inter-unit ties an employee has. Conclusion The research concluded that neither intrinsic nor extrinsic motivation plays a role in determining an individual’s cross-unit knowledge transfer. The effect of individuals’ intrinsic or analysis of contribution from motivation – extrinsic and intrinsic – explicitly limited to intra-unit knowledge transfer provides similar findings. Extrinsic motives on connectedness in the overall network (closeness centrality) are rather mixed. Thus no indication is found that that individual motivation – extrinsic or intrinsic – favourably influences an individual’s position in a network where innovative knowledge is transferred. The research should have included the aspects of training done by an organization in exchanging of knowledge and the level of incentives offered by a company to further evaluate extrinsic motivation. The research should also have focused on technologies that support knowledge transfer. With the advent of new technologies, knowledge transfer can be affected as technology can help with the dissemination of ideas by making it easier to target appropriate recipients. How exactly communication costs are implicated in an explanation of positioning in a knowledge transfer network should also have been researched upon. Bibliography Becker. M & Knudsen. M, 2006, Intra and Inter Organizational Knowledge Transfer Processes: Identifying the Missing Links, DRUID Working Paper No. 06-32. Levine. D & Gilbert. A, 2000, Knowledge Transfer: Managerial Practices Underlying One Piece of the Learning Organization. Argote. L & Ingram. P, 2000, Knowledge Transfer: A Basis for Competitive Advantage in Firms. 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