Reciprocity of Knowledge Flows in Internal Network Forms of Organizing

Fundamental changes in the competitive landscape triggered many firms to leverage and build competencies by focusing on transition processes towards internal network forms of organizing. These forms ameliorate exploration through knowledge creation and transfer. Internal networks are characterized by horizontal knowledge flows that supplement and supplant the vertical knowledge flows that characterize other organization forms like the functional and multi-divisional forms. As these horizontal knowledge flows facilitate knowledge integration, internal networks have an advantage over other organization forms in leveraging and building competencies. One characteristic that makes these horizontal knowledge flows work is the reciprocity ensuing them. Reciprocity relates to the interdependence and coordination modes that characterize internal networks. As reciprocity is influenced by managerial coordination, by the intention to deploy knowledge, and by goal attainment, creating and maintaining reciprocity of knowledge flows can be considered as a managerial competence. In this paper, the attributes of organization form that impact the reciprocity in a firm are explored from structural, managerial and knowledge perspectives. Hypotheses are developed which suggest that specialization and the use of formal meetings restrict reciprocity, whereas job rotation, the number of employees with a coordination function, and teams have a positive effect on the level of reciprocity. These hypotheses are tested by means of a questionnaire administered in a business unit of a multinational financial services firm. Reciprocity of knowledge flows was found to be dependent on the characteristics mentioned above in a predicted way. Since none of the hypotheses needed to be rejected, the evidence suggests that reciprocity is a fundamental feature of internal networks and the horizontal knowledge flows that characterize them. This suggests reciprocity to be an important managerial competence.