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Knowledge-intensive outsourcing alliances present outsourcers with a tension between simultaneously sharing enough private knowledge to accomplish alliance goals and safeguarding such knowledge against misappropriation. This study explores the perspective that increasing interfirm modularity lowers the need for interfirm knowledge sharing. Put another way, modularity complements outsourcee ignorance. Analyses of data on 209 alliances between U.S. firms and software services firms in Russia, Ireland, and India provide strong support for this idea. Our theoretical elaboration and empirical testing of the complementarities between modularity and outsourcee ignorance has significant implications for strategy theory, which are also discussed.

Research summary: Despite the recognition that knowledge sharing among employees is necessary to enact knowledge strategy, little is known about how to enable such sharing. Recent research suggests that social media may promote knowledge sharing because they allow social lubrication and the formation of trust. Our longitudinal and comparative analysis of social media usage at two large firms indicates that users who participate in nonwork interactions on social media catalyze a cycle of curiosity and passable trust that enables them to connect and share knowledge. Paradoxically, the very non workrelated content that attracts users to social media and shapes passable trust can become a source of tension, thwarting a firm's ability to encapsulate knowledge in the form of routines and to use it to enact its strategy. Managerial summary: Integrating knowledge from across a firm is a critical source of competitive advantage. Firms are increasingly implementing internal social media sites to promote knowledge sharing among their employees. Our analysis indicates that employees' curiosity about nonwork-related and work-related interactions motivate them to use the sites. The integration of nonwork and work content allows employees to identify people with valuable knowledge, and gauge the passable trust that they need to share knowledge on the sites or offline. Paradoxically, the nonwork-related content that attracts users to the sites can become a source of tension, thwarting the production of knowledge to enact firms' knowledge-based strategies. To foster work-related knowledge sharing, managers should accommodate nonwork-related interactions on social media.

Research highlights the role of external knowledge sources in the recognition of strategic opportunities but is less forthcoming with respect to the role of such sources during the process of exploiting or realizing opportunities. We build on the knowledge-based view to propose that realizing opportunities often involves significant interactions with external knowledge sources. Organizational design can facilitate a firm's interactions with these sources, while achieving coordination among organizational members engaged in opportunity exploitation. Our analysis of a double-respondent survey involving 536 Danish firms shows that the use of external knowledge sources is positively associated with opportunity exploitation, but the strength of this association is significantly influenced by organizational designs that enable the firm to access external knowledge during the process of exploiting opportunities.

This paper examines how existing knowledge base (i.e., knowledge breadth and depth) interacts with knowledge integration mechanisms (i.e., external market knowledge acquisition and internal knowledge sharing) to affect radical innovation. Survey data from high technology companies in China demonstrate that the effects of knowledge breadth and depth are contingent on market knowledge acquisition and knowledge sharing in opposite ways. In particular, a firm with a broad knowledge base is more likely to achieve radical innovation in the presence of internal knowledge sharing rather than market knowledge acquisition. In contrast, a firm with a deep knowledge base is more capable of developing radical innovation through market knowledge acquisition rather than internal knowledge sharing.

Research summary: This article explores the distribution of alliances across firms' internal structure. Focusing on multinational companies, we examine the impact of alliance portfolio concentration—i.e., the extent to which alliances are concentrated within a limited number of geographic units—on focal firms' performance. Relying on Knowledge‐Based View (KBV) insights, we hypothesize that an increase in alliance portfolio concentration positively influences firm performance and that alliance portfolio size negatively moderates this relationship. Our empirical results enrich the emerging capability perspective on alliance portfolios, point to the relevance of conceptualizing focal firms in alliance portfolio research as polylithic entities instead of monolithic ones, and provide new insights into how firms create value by potentially recombining externally accessed knowledge. Managerial summary: In the setting of multinational companies, we examine whether alliance activities are concentrated in a limited number of subsidiaries or are highly dispersed across multiple subsidiaries. We find that, over time, firms exhibit different patterns in terms of alliance portfolio concentration. In addition, the results show that, for MNCs with a relatively small alliance portfolio, an increase in alliance portfolio concentration is positively related to their financial performance. However, when MNCs' alliance portfolios are relatively large, the relationship between alliance portfolio concentration and firm performance becomes negative. Jointly, these findings suggest that the distribution of alliances across firms' internal structure is an important factor in shaping potential knowledge recombination benefits from alliance portfolios. Copyright © 2017 John Wiley & Sons, Ltd.

Research summary: The knowledge-based view suggests that complex problems are best solved under hierarchical (within-firm) governance. We examined why firms assumed to be in general alignment with this theory might nonetheless produce solutions of varying usefulness. We theorize that a firm's internal knowledge variety (IKV) is associated with its capacity to support cross-domain knowledge flows during search, and its ability to identify and explore promising areas on the solution landscape. We further theorize that partner knowledge in familiar (unfamiliar) domains can offset specific weaknesses in searching rugged landscapes, inherent with low or high (moderate) IKV. We find support for these ideas in the context of drug discovery, extending KBV's focus on governance alignment to explain variation in problem-solving effectiveness within hierarchy. Managerial summary: Firms that concentrate their inventive efforts in a few technological domains, but also dabble in several others, have problem-solving advantages: they can better support knowledge transfer and recombination across domains. Firms that focus too narrowly or spread their inventive efforts thinly across many domains lose these advantages, but might compensate through alliance partnerships. Our study of drug discovery shows that while firms with very low or high knowledge variety tend to produce weaker solutions than firms in the moderate range, their inventive performance improves when alliance partners afford them access to additional knowledge in familiar domains. We explain how the combination of firm and partner knowledge enables firms to better identify, evaluate, and implement alternative solutions to complex problems.

Do some top executives matter more than others? Integrating insights from upper echelons and executive mobility research, we suggest that the functional roles performed by top executives shape their value to the firm. We examine the effects ofinterfirm executive mobility on firm survival for New York City advertising firms from 1924 to 1996. We find that, while losing any top executive is damaging, the loss of a top executive whose functional role focuses on internal firm processes is more detrimental to firm survival than losing a top executive whose functional role focuses on managing external exchange relationships. Additionally, in situations when multiple executives leave simultaneously, firms are more negatively affected when the group departing is functionally heterogeneous.

Prior studies of IPO underpricing, mostly using agency theory and single-country samples, have generally fallen short. In this study, we employ the knowledge-based view (KBV) to explore underpricing across 17 countries. We find that agency indicators are insignificant predictors, board of director knowledge limits underpricing, and external knowledge both substitutes for and complements internal board knowledge. This third finding suggests that future KBV studies should consider how internal and external knowledge states interact with each other. Our study offers new insights into the antecedents of underpricing and extends our understanding of comparative governance and the KBV of the firm.

This paper examines how the knowledge-based view (KBV) can be applied to firm boundary decisions and the performance implications of those decisions. At the center of the paper is a theoretical and empirical examination of how firms most efficiently organize for technological development. We find that distinct organization approaches are advantaged in the speed of technological development depending on the structure of technological development problems and the depth of firms' technological area experience. We make theoretical and empirical contributions to KBV research that examines knowledge development and transfer. Drug development in the pharmaceutical industry serves as our empirical setting.

We extend the knowledge-based view with a new typology and its application to post-IPO firm performance. The typology categorizes knowledge development activity along the dimensions of familiarity (whether the firm has experience with the knowledge or it is new) and source (whether the firm creates it independently or with partners). We use this typology to determine direct and interaction effects of knowledge development activity on survival, RoA, and Tobin's q of newly public firms. Using a sample of 1,056 high-technology manufacturing IPOs in 1990–2005, we find that focused, internal knowledge development correlates with higher performance. We also find a positive interaction effect in combining focused, internal and diversifying, alliance-based knowledge development, and a negative interaction effect in combining diversifying, internal and alliance-based knowledge development.