Rich Ties and Innovative Knowledge Transfer within a Firm
| Published date | 01 October 2014 |
| Author | Rick Aalbers,Wilfred Dolfsma,Otto Koppius |
| Date | 01 October 2014 |
| DOI | http://doi.org/10.1111/1467-8551.12040 |
Rich Ties and Innovative Knowledge
Transfer within a Firm
Rick Aalbers, Wilfred Dolfsma1and Otto Koppius2
Radboud University, Nijmegen School of Management, Institute for Management Research, 1University of
Groningen School of Economics and Business, and 2Rotterdam School of Management, Erasmus University,
The Netherlands
Corresponding author email: w.a.dolfsma@rug.nl
We show that contacts in formal, informal and especially multiplex networks explain
transfer of innovative knowledge in an organization. The contribution of informal con-
tacts has been much acknowledged, while that of formal contacts did not receive much
attention in the literature in recent decades. No study thus far has included both these
different kinds of contacts in a firm, let alone considered their combined effect. The exact
overlap between formal as well as informal contacts between individuals, forming mul-
tiplex or what we call rich ties because of their contribution, especially drives the transfer
of new, innovative knowledge in a firm. Studying two cases in very different settings
suggests these rich ties have a particularly strong effect on knowledge transfer in an
organization, even when controlling for the strength of ties. Some of the effects on
knowledge transfer in an organization previously ascribed to either the formal network
or the informal network may actually be due to their combined effect in a rich tie.
Introduction
Knowledge is frequently considered to be the
most valuable asset of an organization and a key
source for sustained competitive advantage as it
allows for innovation (Grant, 1996; Teece, Pisano
and Shuen, 1997). Yet, at the same time, it is a
difficult resource to manage at the level of the
organization (Szulanski, 1996). As knowledge is
spread throughout the organization, it may not be
available where it can best be put to use (Cross
et al., 2001; Hansen, 1999; Hansen, Mors and
Lovas, 2005). Scholars have emphasized that
effective transfer of innovative knowledge within
an organization increases the organization’s inno-
vativeness (Hansen, Mors and Lovas, 2005;
Tushman, 1977). Although transfer of knowledge
within the organization has received attention in
the literature (Borgatti and Halgin, 2011; Foss,
Husted and Michailova, 2010; Hansen, 1999),
comprehensive empirical studies of the transfer of
innovative knowledge at the intra-organization
level are lacking (Paruchuri, 2010).
Knowledge transfer within a firm can be
studied from a network perspective (Borgatti and
Halgin, 2011). Such a perspective views a firm as a
series of social relations with specific contents and
objectives (Emirbayer and Googwin, 1994). When
studying the network in which innovative knowl-
edge is transferred, the innovation network
(Aalbers, Dolfsma and Koppius, 2013; Harrisson
and Laberge, 2002; Rodan, 2010), the focus is
mostly on the position of individuals in such a
network (Aalbers, Dolfsma and Koppius, 2013;
Cross and Prusak, 2002; Whelan et al., 2011). At
the aggregation level of the organization as a
whole, we analyse the structure of intra-
organizational networks as antecedents of inno-
We would like to thank participants in seminars at
Copenhagen Business School, University of Bocconi,
University of London (Queen Mary), RSM Erasmus
University, University of Groningen, University of
Glasgow and the University of Lund, and in addition
David Dekker, Wouter de Nooy and Roger Leenders as
well as the three anonymous reviewers for their com-
ments and Editor Ewan Ferlie for his encouragement.
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British Journal of Management, Vol. 25, 833–848 (2014)
DOI: 10.1111/1467-8551.12040
© 2013 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
vative knowledge transfer (Borgatti and Halgin,
2011). An organization’s formal and informal net-
works are well-recognized, distinct patterns of
social relations in the literature (Gulati and
Puranam, 2009; Rizova, 2007) and have been
noted as antecedents for transfer of innovative
knowledge (Obstfeld, 2005). These formal and
informal networks, however, have not both been
included in a single study that seeks to explain
transfer of new, innovative knowledge in an
organization. Most network studies emphasize
the importance of informal ties for effective
knowledge transfer (Borgatti and Foster, 2003;
Hansen, 1999; Krackhardt and Hanson, 1993;
Reagans and McEvily, 2003; Rizova, 2007).
Attention to the informal ties dominates the
larger research agenda as well (Foss, Husted and
Michailova, 2010; Gulati and Puranam, 2009).
Although some older studies point to formal ties
potentially contributing to knowledge flows in
organizations (e.g. Darr, Argote and Epple, 1995;
Nonaka, 1994), formal networks have rarely been
investigated in detail recently and, even when they
have been, they are often equated with the organi-
zation chart (Cross and Prusak, 2002; Foss,
Husted and Michailova, 2010; Krackhardt and
Hanson, 1993; see Hansen, Mors and Lovas
(2005) for an exception).
Individuals in the organization can relate to
each other in a number of different ways. In this
paper, at the dyadic level, we determine the extent
to which the shape of the innovation network is
explained by those of the formal and the informal
networks. The formal and the informal networks
can each have their own distinct role in stimulat-
ing the transfer of new, innovative knowledge.
Conceptually and empirically identifying formal
and informal networks in a firm, we determine
whether these networks, separately, as well as
in ‘multiplex’ combination where they exactly
overlap, explain innovative knowledge transfer.
When several dimensions of interaction between
individuals overlap, these individuals have a mul-
tiplex tie (Brass, 2012; Burt, 1983; Robins and
Pattison, 2006) and hence ‘quite different net-
works exist simultaneously within the same
organization’ (Lincoln and Miller, 1979, p. 182;
Robins and Pattison, 2006; Smith-Doerr and
Powell, 2005). When individuals connect both
formally and informally at the same time, forming
multiplex relations that constitute a network in
itself, this gives rise to qualitatively different inter-
actions (Brass, 2012; Burt, 1984; Smith-Doerr,
Manev and Rizova, 2004). Multiplexity, the
extent to which two actors are linked together by
more than one relationship, has been largely over-
looked in studies that apply a network approach
to intra-organizational settings (Agneessens and
Skvoretz, 2012; Brass, 2012; Grosser et al., 2012).
The few studies that have included multiplexity,
studying different phenomena than the one
studied here, empirically indicate that individual
benefits derive from entertaining multiplex ties.
These benefits include increased intimacy of rela-
tionships and increased levels of trust (Burt and
Minor, 1983; Soda and Zaheer, 2012), greater
temporal stability of relationships (Burt and
Minor, 1983; Ibarra, 1995; Rogers and Kincaid,
1981) and reduced uncertainty at the individual
level (Albrecht and Ropp, 1984).
Our research contributes two findings to the
literature. First, using broadly accepted and well-
founded definitions and measures derived from
organization theory, social network theory and
network methodology (Borgatti and Halgin,
2011; Marsden, 1990; Wasserman and Faust,
1994), we find that formal relations contribute at
least as much to knowledge transfer in a firm as
informal ones. This is a vindication for the role of
formal structures for knowledge transfer in the
firm. We define formal structure to include the
organizational chart as well as formally mandated
yet possibly temporary quasi-structures (Brass,
1984; Schoonhoven and Jelinek, 1990). Research
has tended to emphasize the contribution to
knowledge transfer of informal networks, yet to
managers formal networks are the default, consti-
tuting the relations between individuals that they
can more readily influence (Cross, Borgatti and
Parker, 2002). Shaping the formal network thus
can stimulate knowledge transfer (Rizova, 2007).
After a first study to qualitatively compare the
separate contributions of formal and informal
networks to knowledge transfer (Gulati and
Puranam, 2009), we now provide a comprehen-
sive, quantitative comparison.
Second, in addition to analysing how the
formal and the informal networks contribute to
knowledge transfer separately, we determine their
combined, multiplex contribution to innovative
knowledge transfer. Combined informal and
formal ties, forming a multiplexity network, turn
out to be rich ties since they stimulate knowledge
transfer more than ties in the formal-only and
834 R. Aalbers, W. Dolfsma and O. Koppius
© 2013 British Academy of Management.
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