The Exploration Phase of Replication Strategies: The Role of Autonomous Action for Reverse Knowledge Flows
| DOI | http://doi.org/10.1111/1467-8551.12239 |
| Date | 01 July 2018 |
| Published date | 01 July 2018 |
British Journal of Management, Vol. 29, 411–427 (2018)
DOI: 10.1111/1467-8551.12239
The Exploration Phase of Replication
Strategies: The Role of Autonomous Action
for Reverse Knowledge Flows
Martin Friesl and Joanne Larty
Lancaster University Management School, Lancaster University, Bailrigg, Lancaster,
Lancashire, LA14YX, UK
Corresponding author email: m.friesl@lancaster.ac.uk
Replication strategies rely on the exploration of new knowledge. An important source
of new knowledge is the transfer of unit level experience to headquarters, a process re-
ferred to as reverse knowledge flows. Such knowledge flows are fraught with diculty
as formal mechanisms often break down due to diverging business interests of unit and
headquarters managers. This study brings together research on knowledgestickiness and
autonomous action to provide a new avenue for understanding reverse knowledge flows.
By drawing on an exploratorystudy of a franchise network, we providean insight into how
autonomous action reduces initiation stickiness but potentially increases implementation
stickiness. Our analysis suggests that the role ofautonomous action for reverseknowledge
flows is moderated by unit managers’ resourceexpectations that emerge as a result of au-
tonomous action. Exploring the interplay of autonomous action and knowledge stickiness
provides new explanatorymeans for understanding reverse knowledge flows in replicator
organizations.
Introduction
Replicator organizations focus on the close copy-
ing of a business format, i.e. a set of value creat-
ing knowledge and capabilities, across organiza-
tional units (Filippini, G¨
uttel and Nosella, 2012;
Szulanski and Winter, 2002; Winter, 1995; Winter
and Szulanski, 2001). Examples of firms that fol-
low such a strategy are IKEA with its approach
to internationalization (Jonsson and Foss, 2011)
or Intel’s way of producing processors of high
accuracy (McDonald, 1998). A crucial part of
replication strategies is to continually explore new
knowledge (Winter and Szulanski, 2001; Zollo and
Winter, 2002). Such exploration requires knowl-
edge to be transferred from the unit level to
headquarters (HQ), a process referred to as re-
verse knowledge flows (RKFs) (Ambos, Ambos
and Schlegelmilch, 2006; Jonsson and Foss, 2011;
Mudambi, Piscitello and Rabbiosi, 2014). While
‘knowledge transfer’ has received substantial re-
search attention (Aalbers, Dolfsma and Koppius,
2014; Argote and Ingram, 2000), research on
RKFs is still in its infancy.This applies to research
on RKFs in multinational enterprises more gen-
erally (Ambos, Ambos and Schlegelmilch, 2006;
H˚
akanson and Nobel, 2000; Mudambi, Piscitello
and Rabbiosi, 2014) but also within replicator or-
ganizations more specifically (Jonsson and Foss,
2011).
Prior research only provides a partial view of
RKFs by focusing on ‘formal processes’of knowl-
edge transfer from replicatees to HQ (Jonsson
and Foss, 2011). Examples include forums for
best practice sharing, process improvement initia-
tives or regular reporting procedures(Crossan and
Berdrow, 2003; Jonsson and Foss, 2011). How-
ever, such knowledge flows are ‘sticky’ (Szulanski,
1996) and fraught with diculty. Indeed, what
some units regard as valuable might not be
© 2017 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
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412 M. Friesl and J. Larty
considered worthwhile replicating by HQ (Carlile,
2004; Szulanski and Jensen, 2008). Thus, the po-
litical context of organizations, fuelled by dier-
ent managerial interests and interpretations, con-
stitutes a substantial challenge for RKFs and
innovation in replicator organizations (Carlile,
2002, 2004; Szulanski, 1996, 2000). This shifts
salience to actors’ autonomous actions and emer-
gent forms of RKFs (Carlile, 2004; Friesl and
Larty, 2013) that aim to circumvent knowledge
stickiness. However, extant research has not ad-
dressed the issue of knowledge stickiness in the
context of RKFs nor do we have an in-depth
understanding of replicatees’ role in reducing
stickiness through autonomous actions. Thus,
this paper addresses the following research ques-
tion: how do autonomous actions reduce knowl-
edge stickiness to facilitate RKFs in replicator
organizations?
In order to address this research question we
follow an explorative, embedded case design (Yin,
2009). We chose a franchising company (Alpha)
as a typical replicator organization (Szulanski and
Jensen, 2008; Winter et al., 2012). Our analy-
sis draws on four embedded episodes of RKFs
within Alpha. Our explorative analysis reveals
that the relationship between autonomous ac-
tion and knowledge stickiness is a double edged
sword. Although autonomous actions overcome
‘initiation’ stickiness, the resource expenditure of
those actions creates expectationsof compensation
which, in turn, become a source of ‘implementa-
tion’ stickiness. Furthermore, a predominance of
unit level resourcing encourages lateralknowledge
flows (LKFs) among franchisees which results in
pockets of diverging practice.
The findings of this paper contribute to the
literature on replicator organizations by providing
new insights into emergent forms of RKFs. By
spelling out how autonomous action reduces
knowledge stickiness, we complement existing
research emphasizing the role of formal processes
of RKFs (Jonsson and Foss, 2011; Winter and
Szulanski, 2001) and, as a result, provide a more
nuanced understanding of how replicator organi-
zations evolve. However, focusing on autonomous
action also provides new insights into the reasons
for deviation froma business format, a core theme
in replication research. While prior research
theorizes deviation as inappropriate adaptation
to local contexts (Szulanski and Jensen, 2008;
Winter et al., 2012) or the mindless drift of
routines (Cohen and Bacdayan, 1994; Friesl and
Larty, 2013) we show that it can be a side eect
of attempted RKFs. Finally, we contribute to the
emerging debate on RKFs more widely (Ambos,
Ambos and Schlegelmilch, 2006; Mudambi,
Piscitello and Rabbiosi, 2014) by giving insights
into the types of autonomous actions involved in
knowledge flows unsanctioned by HQ.
The exploration phase of replication
strategies: literature review
and conceptual framework
Replication strategies: theoretical background
Research on replication is largely based on evolu-
tionary economics (Nelson and Winter, 1982) and
the knowledge based theory of the firm (KBT).
KBT considers knowledge a crucial resource of
the firm and a source of competitive advantage
(Eisenhardt and Santos, 2002; Grant, 1996). This
makes the use of existing knowledge and the cre-
ation of new knowledge key value creating activi-
ties (March, 1991). Apart from replication strate-
gies, KBT has been used in a variety of contexts
such as knowledge transfer (Argote and Ingram,
2000), organizational learning (Huber, 1991)
and innovation (Bierly and Chakrabarti, 1996;
DeCarolis and Deeds, 1999) which creates a rich
conceptual underpinning for this paper. One
particular ospring of this debate is a growing
body of research focusing on the importance of
RKFs, i.e. knowledge flows from units to the
centre (Ambos, Ambos and Schlegelmilch, 2006;
Jonsson and Foss, 2011; Mudambi, Piscitello and
Rabbiosi, 2014).
RKF as a form of exploration forms the the-
oretical foundation to study innovation in repli-
cator organizations. Indeed, while a firm’s knowl-
edge base forms the basis for replication, it is not
readily available at the outset and it requires con-
tinual exploration and improvement. It develops
and evolves by incorporating knowledge created
by HQ and, more importantly for this paper, at
the unit level (Schleimer, Coote and Riege, 2014;
Winter and Szulanski, 2001). For instance, this
may include production techniques (Bradach,
1998) or knowledge about marketing and prod-
uct oerings (Jonsson and Foss, 2011). Yet, in
order for unit level knowledge to become part
of a firms’ replication strategy, it requires RKFs.
This is contingent on unit level knowledge being
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