Strategic Management Journal
Strat. Mgmt. J., 33: 1090–1102 (2012)
Published online EarlyView in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/smj.1959 Received 29 May 2009; Final revision received 20 January 2012
RESEARCH NOTES AND COMMENTARIES
HOW KNOWLEDGE AFFECTS RADICAL INNOVATION:
KNOWLEDGE BASE, MARKET KNOWLEDGE
ACQUISITION, AND INTERNAL KNOWLEDGE
KEVIN ZHENG ZHOU1 * and CAROLINE BINGXIN LI2
School of Business, University of Hong Kong, Hong Kong
Daniels College of Business, University of Denver, Denver, Colorado, U.S.A.
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. Copyright © 2012 John Wiley & Sons, Ltd.
Radical innovation is the novel, unique, or stateof-the-art technological advance in a product category that signiﬁcantly alters the consumption patterns in a market (Abernathy and Utterback,
1978; Gatignon et al., 2002). As radical innovation reshapes the competitive landscape and creates new market opportunities, various approaches have been proposed to identify its drivers (e.g.,
Chandy and Tellis, 1998; Smith and Tushman,
2005), among which the knowledge-based view
Keywords: knowledge-based view; knowledge breadth;
knowledge depth; radical innovation; China
Correspondence to: Kevin Zheng Zhou, School of Business,
University of Hong Kong, Pokfulam, Hong Kong.
Copyright © 2012 John Wiley & Sons, Ltd.
(KBV) has recently gained prominence. The basic
premise of the KBV is that new product creativity is primarily a function of the ﬁrm’s ability to manage, maintain, and create knowledge (Grant, 1996). Whereas early KBV studies tend
to focus on how knowledge affects innovation
in general (e.g., Bierly and Chakrabarti, 1996;
DeCarolis and Deeds, 1999), more recent developments assert that a ﬁrm’s knowledge base represents its most unique resource for radical innovation development (e.g., Hill and Rothaermel, 2003; Miller, Fern, and Cardinal, 2007; Subramaniam
and Youndt, 2005; Zhou and Wu, 2010).
However, extant literature offers conﬂicting
views regarding how a ﬁrms’ existing knowledge
base, namely, its knowledge breadth and depth,
affects radical innovation. For example, Taylor
Research Notes and Commentaries
and Greve (2006) suggest that ﬁrms with diverse
knowledge domains are more likely to generate cutting-edge ideas and novel combinations of knowledge components. A broad knowledge base
with varied, accumulated observations and cues
facilitates understanding of new information and
potential changes, which enhances the ﬁrm’s ability to detect remote technological or market opportunities for its radical innovation (Chesbrough, 2003). In contrast, Laursen and Salter (2006) posit
that though diverse knowledge may stimulate a
variety of ideas, without sufﬁcient synthesis and
utilization efforts, those ideas will just touch on
shallow surfaces rather than drill down to the
essence of an emerging breakthrough, which promotes incremental but not radical innovation. Regarding the role of knowledge depth, Zahra
and George (2002) believe that in-depth knowledge in a speciﬁc industrial ﬁeld is essential for radical innovation because it facilitates the...
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