Using external knowledge to improve organizational innovativeness: understanding the knowledge leveraging process

Purpose – The purpose of this paper is to develop a better understanding of the process used by organizations to leverage external knowledge. A model of the knowledge leveraging process is developed, which hypothesizes joint sensemaking is a key antecedent to both explicit and tacit knowledge exchange, a dual role for explicit knowledge exchange (i.e. as an antecedent of both tacit knowledge exchange and absorptive capacity) and absorptive capacity is a key mediator between knowledge exchange (both explicit and tacit) and organizational innovativeness. Design/methodology/approach – The hypothesized model is tested using survey data gathered from over 230 Chinese companies. The results from the analysis of the hypothesized model are compared to ones from a theory-based rival model. The analyses are performed using partial least squares analysis. Findings – The results suggest key roles for both joint sensemaking and absorptive capacity in the knowledge exchange process. In addition, our findings provide evidence regarding the interplay between explicit and tacit knowledge exchange and their role in the knowledge leveraging process. Research limitations/implications – The cross-sectional nature of the study provides limited inferences regarding causality. In addition, organizational innovativeness is measured using self-reported, subjective assessments. However, the results provide valuable insights into the knowledge leveraging process. Practical implications – The study increases our understanding of how organizations leverage external knowledge to improve organizational innovativeness. In addition, it provides specific guidance for managers interested in leveraging external knowledge. Originality/value – Knowledge and knowledge management issues are receiving increased attention in the marketing literature. However, due to the complexity involved in transferring and using external knowledge, our understanding of the processes involved is limited. Our study provides some insights regarding how firms leverage external knowledge and therefore should be of interest to both researchers and practitioners.