The role of inter- and intra-organisational networks in innovation: towards requisite variety

Inter- and intra-organisational network characteristics equally contribute to firm innovation. This study investigates the relationship between inter-organisational network position and firms’ exploratory innovation performance by taking into account the (potentially) moderating effect of intra-organisational network characteristics. This study uses patent data on electric vehicles (including hybrid, battery, and fuel cell) available from the United States Patent and Trademark Office (2000–2015). The results show that there is an inverted U-shape relationship between the central position and the exploratory innovation performance of firms, which becomes steeper for firms characterized internally by a cohesive network. In addition, a positive relationship is revealed between broker position and exploratory innovation performance of firms. This relationship becomes stronger when firms display lower levels of network cohesion. Combined, these findings strongly suggest that firms benefit from matching the scale of their external networks with internal heterogeneity, in line with Ashby’s notion of requisite variety (Cybernetica 1(2):83–99, 1958). This study provides practical guidance for enterprises to improve their exploratory innovation capability through simultaneously developing intra-organisational and inter-organisational collaborative networks.