Knowledge Complexity and the Performance of Inter-Unit Knowledge Replication Structures

Intra-firm replication of complex knowledge is difficult yet critical to firm growth and the exploitation of competitive advantage. Inter-unit organizational structures can facilitate the replication of complex knowledge between a source unit and a recipient unit. This study examines how inter-unit organizational structures perform at different levels of knowledge complexity. We dimensionalize the patterns of information-processing interactions according to three specific factors: the degree of inter-unit connectivity, the extent of mirroring between the structure and the knowledge configuration, and coordination mechanisms. Simulation analyses offer a set of novel findings on how the information-processing and bounded-rationality concerns of organizational design impact the replication performance of the structures. We derive optimal structures for different levels of knowledge complexity and articulate their theoretical and practical implications