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Keywords Innovation, Tacit knowledge, Explicit knowledge, Knowledge management, USA
Abstract This study surveys a broad spectrum of bS manufacturer and service firms to examine the effect of tacit knowledge transfer on firm innovation capability. The authors present a set of hypotheses concerning the relationships between inter-firm relationship strength and tacitness of knowledge transfer, extent of tacit knowledge transfer and innovation capability, and innovation capability and innovation performance based on the theory of knowledge. Moderating roles of firm collaborative experience and firm size on the relationship between inter-firm relationship strength and the extent of tacit knowledge transfer are considered. Empirical results generally support the predictions from the theory and managerial implications are included.
Introduction
Innovations form the lifelines of organizations (Wind and Mahajan, 1997). However, innovations have become increasingly complex, costly, and risky due to changing customer preferences, extensive competitive pressure, and rapid and radical technological changes (Griffin, 1997). As a result, firms find it increasingly difficult to internalize innovations (Moorman and Rust, 1999). Acquiring knowledge and skills through collaboration has been considered an effective and efficient way of successful innovation (Adams et al., 1998). This point of view is strengthened in several recent studies (Moorman and Rust, 1999; Madhavan and Grover, 1998; Li and Calantone, 1998; Han et al., 1998; Chandrashekaran et al., 1999; Hurley and Hult, 1998; Cooper, 1992; Adams et al., 1998).
3M corporation
In the real world, US multinational, 3M Corporation, is considered one of the most innovative companies in the world due to its effective knowledge management system (Brand, 1998). Similarly, Japan's Hitachi's effective knowledge creation and successful innovation are due in large part to the successful development of a long-term, high-trust supply relationship (Lincoln et al., 1998). Xerox decided to launch a knowledge-sharing initiative called the "Transition Alliance" to deal effectively with innovations in hardware and software (Storck and Hill, 2000).
The importance of knowledge for firms is acknowledged in many studies. Knowledge is considered one of the important firm resources, which is unique, inimitable, and valuable for firms (Day and Wensley, 1988; Collis, 1994; Peteraf, 1993; Barney, 1986a,b; Wernerfelt, 1984; Grant and Baden-Fuller, 1995; Grant, 1997). In interfirm relationship research, one of the purposes of inter-firm cooperation is to get knowledge from partner firms (Glazer, 1991). In the...