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Knowledge Codification, Exploitation, and Innovation: The Moderating Influence of Organizational Controls in Chinese Firms

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  • Li, Yuan
  • Lee, Soo-Hoon
  • Li, Xiyao
  • Liu, Yi

Abstract

This study examines how firms use organizational controls in the knowledge exploitation process to enhance endogenous innovation. Some past studies have shown that controls restrict the flexibility needed in innovation, whereas others have shown that controls enhanced innovation by directing the efforts of research and development professionals. Thus, we extend the theoretical development of organizational control theory to examine how different types of organizational controls (clan, behaviour, and output controls) play different roles at different points in the innovation process. First, we propose that codifying knowledge enhances its level of exploitation, with clan control serving as a moderator. Next, we propose that knowledge exploitation enhances endogenous innovation with behaviour and output controls serving as moderators. Our results from a sample of 607 Chinese manufacturing firms show that clan control moderated the knowledge codification–exploitation relationship positively. Behaviour control moderated the knowledge exploitation–innovation relationship positively, but output control had an inverse U-shaped moderating influence in this relationship. The results indicate that examining different types of organizational controls at different points in the knowledge management process provides a more comprehensive understanding for the role of controls in innovation.

Suggested Citation

  • Li, Yuan & Lee, Soo-Hoon & Li, Xiyao & Liu, Yi, 2010. "Knowledge Codification, Exploitation, and Innovation: The Moderating Influence of Organizational Controls in Chinese Firms," Management and Organization Review, Cambridge University Press, vol. 6(2), pages 219-241, July.
  • Handle: RePEc:cup:maorev:v:6:y:2010:i:02:p:219-241_00
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    Citations

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    Cited by:

    1. Fotios Katimertzopoulos & Charis Vlados, 2019. "Towards a New Approach of Innovation in Less Developed Regional Business Ecosystems," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 9(3-4), pages 101-114.
    2. Emma Su & Michael Carney, 2013. "Can China’s family firms create intellectual capital?," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 657-675, September.
    3. Radtke, Robin R. & Speklé, Roland F. & Widener, Sally K., 2023. "Flourish or flounder: Do trust-centric management controls encourage knowledge sharing and team performance?," Accounting, Organizations and Society, Elsevier, vol. 107(C).
    4. Su Zhongfeng & Wang Donghan, 2018. "Entrepreneurial Orientation, Control Systems, and New Venture Performance: A Dominant Logic Perspective," Entrepreneurship Research Journal, De Gruyter, vol. 8(3), pages 1-17, July.
    5. Charalambos Vlados & Fotios Katimertzopoulos, 2019. "The ¡°Mystery¡± of Innovation: Bridging the Economic and Business Thinking and the Stra.Tech.Man Approach," Business and Economic Research, Macrothink Institute, vol. 9(1), pages 236-262, March.
    6. Kashan, Alireza Javanmardi & Lay, Janine & Wiewiora, Anna & Bradley, Lisa, 2022. "The innovation process in mining: Integrating insights from innovation and change management," Resources Policy, Elsevier, vol. 76(C).
    7. Yuan Li & Haowen Chen & Yi Liu & Mike Peng, 2014. "Managerial ties, organizational learning, and opportunity capture: A social capital perspective," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 271-291, March.
    8. Syazwani ‘Izzati Mohd Fauzi & Mazurina Mohd Ali & Erlane K. Ghani, 2024. "MFRS 15 revenue from contracts with customers: its adoption and the organisational change," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(6), pages 542-553, December.
    9. Turner, Karynne L. & Monti, Alberto & Annosi, Maria Carmela, 2021. "Disentangling the effects of organizational controls on innovation," European Management Journal, Elsevier, vol. 39(1), pages 57-69.

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