Knowledge Mobilization in the Face of Imitation: Microfoundations of Knowledge Aggregation and Firm-Level Innovation

Research summary. Firms in technology-based settings must mobilize individual knowledge to continuously execute innovative new opportunities. Because knowledge is generally conceptualized at the firm-level, however, we have only a limited understanding of how individual-level knowledge aggregates to firm-level outcomes. We develop a microfoundational theory to examine the individual-level foundations of firm-level innovation in the context of imitative competition. A key insight is that despite intuitions that knowledge mobilization should protect firms from rival imitation attempts, knowledge mobilization can often benefit rivals more than the focal firm itself, due to a process of continuous knowledge spillover-sharing amongst rivals. In addition, while knowledge-based advantages are often thought to be temporary without some isolating mechanism, sustainable advantage may emerge under limited conditions under which knowledge-mobilizing firms outrace rivals’ imitation efforts.

Managerial summary. Managers in fast-moving technology-based industries must mobilize the knowledge of individuals in their firm to execute new market opportunities arising over time. To do so, managers can employ processes such as transfer, collaboration, and recombination, which allow firms to draw on and use individual-level knowledge in different ways. We develop a computational model to generate insight into the implications of these different knowledge mobilization mechanisms in settings where individuals interact not just with others in the focal firm, but also with imitating rivals. We find that knowledge mobilization can often benefit rivals more than the focal firm itself due to a process of knowledge spillover-sharing amongst rivals. In addition, we develop insight into the limited conditions under which knowledge-mobilizing firms can achieve a sustainable advantage.