Intraorganizational Networks, Interorganizational Networks, and the Impact of Central Inventors: A Longitudinal Study of Pharmaceutical Firms

Abstract

This paper proposes that a mechanism through which a firm's location in the interorganizational network influences the firm's internal innovation activities is modifying the amount of information flowing within the firm. Exploring a firm's internal innovation activities, I hypothesized that structural centrality of an inventor in the intrafirm coinventing network is associated with her impact on her firm's innovation activities in an inverted-U-shape relation. I further hypothesized that this relationship is moderated by the firm's centrality and span of structural holes in the interfirm network. I found strong support for these hypotheses in a longitudinal study of eight large pharmaceutical firms. The findings in this paper, apart from having managerial implications, have implications for research on alliances, network studies, and innovation processes.

The Strategic Allocation of Inventors to R&D Collaborations

“…Earlier research has shown that inventors who occupy a more central position the intrafirm co-inventing network have superior access to information and knowledge (Bonacich, 1987), a higher perception of their quality and a greater number of patent citations made to them (Podolny, 2001;Podolny et al, 1996); moreover, they have a significant influence on the selection of the firm's technological path (Nerkar and Paruchuri, 2005) and a greater impact on the quality of their firm's innovative outputs (Paruchuri, 2010). On the one hand, these findings highlight the potential benefits that such inventors could bring for the success of a collaboration, in terms of highly valuable contributions.…”

“…Using the resulting matrix of the one-mode network of inventors, we compute the structural centrality for each inventor using the Bonacich (1987) power measure with standard Matlab code. This frequently used measure has the advantage that, in measuring the centrality of a focal inventor, it explicitly takes account of the centrality of other inventors that co-invent with the focal inventor (Nerkar and Paruchuri, 2005;Paruchuri, 2010). Due to the right-skewed distribution of inventor centrality, we use its natural logarithm as the main measure in our analysis.…”

“…However, to date the literature has not addressed the strategy of directly intervening in the selection of employees in order to mitigate the risk of leakage. This is despite the fact that innovation studies have shown that inventors play a key role in inter-organizational knowledge transfer and, consequently, in firm learning and innovativeness (Agrawal et al, 2014;Almeida and Kogut, 1999;Nerkar and Paruchuri, 2005;Palomeras and Melero, 2010;Paruchuri, 2010;Rosenkopf and Almeida, 2003;Singh, 2007;Song et al, 2003). Therefore, a closer examination of the inventors that participate in R&D collaboration appears to be a promising direction to address the risk of misappropriation and knowledge leakage.…”

Bridging firm-internal boundaries for innovation: Directed communication orientation and brokering roles

“…A firm that can improve the diffusion of knowledge internally will benefit from enhanced innovative activity (cf. Paruchuri, 2010; Whelan et al, 2011).…”

“…A firm that can improve the diffusion of knowledge internally will benefit from enhanced innovative activity (cf. Paruchuri, 2010; Whelan et al, 2011).However, at the same time, research has particularly pointed to knowledge as one of the most difficult resource to manage at an organizational level (Szulanski, 1996). Reflecting on the governance of knowledge sharing in organizations, Foss and colleagues (2010) suggest that knowledge may come to be sticky and difficult to transfer because of ingroup-outgroup dynamics.…”