Network Structure and Inter-organizational Knowledge Sharing Capability
ABSTRACT This paper examines how the structure of a supply network can affect the inter-organizational knowledge sharing capability, which is expressed by absorptive capacity and shared identity. The supply network structure is analyzed by two dimensions – formality and centrality. Propositions about the relationships between network structure and knowledge sharing capability are suggested at the end. Subject Areas: Supply chain management, Inter-organizational knowledge sharing, Absorptive capacity, Shared identity, Network structure.
1. INTRODUCTION Historically, individual organizations have tried to improve ...view middle of the document...
. Information can be viewed as data that have been transformed, by adding relevance and purpose, into a shape that is meaningful and useful  . An example of information is customer behavior when a production schedule is delayed by several weeks, for example, customers may leave or wait. Knowledge can extend the information further; it’s a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information . To illustrate, consider the
External uncertainty is mostly coming from the variation of customer demand, which is unlikely to be controlled, whereas internal uncertainty is variations in internal factors to supply network, such as partner, process, and product. We generally consider this internal uncertainty reducible or controllable.
knowledge required to respond to customer behaviors in the above example and to understand what the consequences of such decisions might be. The “bullwhip effect” is a well-known supply chain phenomenon, which is caused by demand uncertainty. Many researchers have studied the bullwhip effect     . Of particular relevance, Lee  highlights information sharing and tight coordination as one of the cures for the bullwhip effect. To reduce the supply (internal) uncertainty, firms can stock the components that have a risk of supply disruption as long as doing so is not too costly. In addition, having more than one supplier, and thus changing network structure, can help to reduce supply uncertainties. If having safety stock or having more suppliers is not feasible, inter-organizational information and/or knowledge sharing should be employed, as inter-organizational knowledge sharing (IKS) has been identified as one of the crucial enablers of any supply chain . Specifically, knowledge can be very helpful in understanding and managing the complexities of the supply network. As a result, knowledge-sharing capability between and among organizations should be an important consideration in designing and managing in any supply network. Interestingly, information shared in an effort to reduce supply uncertainty seems to be richer and more extensive than that shared to reduce demand uncertainty . In the economics literature, the supply chain system is described as one type of a network of firms. And the network is considered to be a “hybrid” organization in Transactional Cost Economics (TCE), residing between market-based transactions and complete self-sufficiency . This hybrid network form can help firms to cope with high uncertainties in highly competitive markets by pooling resources . In the Knowledge Based Theory of the Firm,    knowledge is viewed as an asset or resource. However, this theory assumes that knowledge will move unencumbered and without cost within and among organizations; i.e.,
although knowledge is recognized as an asset,...