Finally i had manage to finish to review all 3 article, (^.^). Anyway, please share your thought and view, let us expand our knowledge!
Wenpin Tsal (2001). An organization consists of multiunit, where it means organization is geographically dispersed. From geographic groupings from area, to region and divisions, each of the unit consist of own set of management. They are responsible in carry out activities and reporting back to their headquarters. Each unit will have encounter different set of problem and trying to solve by themselves, therefore knowledge on knowhow will be developed. Besides that, each unit has their own experience workers; this cross functional communication could maximize the use of human capital. The entire knowledge could be share among the entire unit to leverage on performance as well as creating new knowledge. However, what should organization do in order to create the network?
Author had suggested a central network should be created, the effective of the network are based on 2 indicators, network position and absorptive capacity.
In the inter-unit network, a central position should be created in order to capture external/internal information, with the feedback from customer and workers; product could be improved to meet the demand of the market. This central position serves as a medium or channel to gather all the information available in the entire unit, share it, and use it to generate idea. Besides that, best practices from each department could be utilize and serve as a references in solving problem that lead to Cost efficiency and reduction of operating cost. As concluded, promoting innovation and performance of the firm could be increase. Therefore, first hypothesis had been developed, the first part of this hypothesis stated that the centrality of an organizational unit’s network position is positively related to its innovation and the second part is related to business performance.
Absorptive capacity is an ability of an organization to value, assimilate and creating new knowledge. With this capacity, the ability to understand the technology and information will be higher that will increase research and development activities. It stimulates innovation and increase the commercialization of new products. Therefore, second hypothesis had been developed by the author in order to test the relationship between absorptive capacity with innovation and performance. And lastly, the third hypothesis that created to test the relationship between network position and absorptive capacity to influence innovation and performance of the firm.
Two multinational companies had been chosen to be studied. There are, Taiplex Corporation where it is a petrochemical industry with 24 business units and Resident enterprise that producing food with 36 business units available. Variables that had been used are:
| | Variable | Proxy by |
| Dependent variable | Innovation | Innovation achieved rate, number of new products introduced in a unit. |
| | Business performance | Profitability achieved rate |
| Independent variable | Absorptive capacity | R&D intensity |
| | Network position | Questionnaire question. Which units provide your unit with new knowledge or expertise when your unit is seeking technical advice inside your organization? |
| Control variable | Unit size | Log of the unit sales and the number of employees in each unit size |
| | Competition | Two questions in questionnaire, Competition is intense in our local environment and our unit has strong competitors in the market place. (7 level likert scale). |
| | Prior performance | |
| | Prior innovation | |
| | performance | |
| | Innovation | |
Result:
| | Accept/Reject (P value) | Positive/negative relationship between independent and dependent |
| Hypothesis 1a | Accept (99% confidence interval) | Positive |
| Hypothesis 1b | Rejected | - |
| Hypothesis 2a | Accept (99% confidence interval) | Positive |
| Hypothesis 2b | Accept (95% confidence interval) | Positive |
| Hypothesis 3a | Accept (99% confidence interval) | Positive |
| Hypothesis 3b | Accept (95% confidence interval) | Positive |
From the result generated, it is clearly show that network position and absorptive capacity are directly related to the business performance and innovation. Higher the absorptive capacity and network position will lead to increase of innovation activities and business performance.
Reference:
Wenpin Tsai. (2001). Knowledge Transfer in Intraorganizational Networks: Effective Network Position and Absorptive Capacity on Business Unit Innovation and Performance. Academy of Management Journal 44(5): 996-1004.
7 comments:
The article almost like research methedology that we study before..Based on my opinion, knowledge can defined as a resolve design and solving problems..In every organization must able to link organizational units to gain and attach the critical competencies that contribute in the market.Network position are one of the advantages uses in the organization.It is because it can gain competitive advantages in marketplace, improve its business operation and enjoy the benefit of economics.Absorptive capacity in organizational have a better understanding of new technology and new knowledge to create goods and services.Without the absorptive capacity we cannot transfer knowledge to one another..Here already proven that, absorptive capacity are important.Besides, it can confront the knowledge transfer which it's hard to identified it.
What is the advantage of the absorptive capacity?
Absorptive capacity is an ability for the firm to understand external and internal information more precisely. Higher the absorptive capacity, higher the ability of the organization to learn and use the knowledge.
what is advantage network position?
a central network position is like providing a main channel where it link all network from other unit, therefore, user could access to information from other unit or communicate with other unit in order to solve problem or creating new knowledge.
other than network position and absorptive capacity what other concept that can determine the effectiveness of knowldege transfer?
i think ICT technology should be one of the factor, suitable technology increase the efficiency of data transfer and boundaries elimination.
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