The Diversity Effects of Knowledge Sourcing Strategies on Firm Performance: A Complementarity Theory

The complementarity theory suggests that organizations need to adopt synergistically multiple ways of knowledge sourcing in leveraging the strategic value of organizational knowledge. We take a diversity perspective in which firms simultaneously employ multiple knowledge sourcing strategies (KSSs) for competitive advantages. Based on knowledge-based view of the firm, knowledge sourcing scope and type define four individual KSSs: internal knowledge codification, internal knowledge personalization, external knowledge codification, and external knowledge personalization strategies. Then, we classify four distinct knowledge sourcing diversities based on Rumelt’s diversity model, and hypothesize their effects on firm performance to identify complementarities and substitutabilities among combined KSSs. Supermodularity tests with 152 firm-level data provide empirical evidence on the complementarities and substitutabilities from a diversity viewpoint. This study might be an initial theoretical attempt to explain joint KSS effects on firm performance with practical implications, thus contributing to a complementarity theory in the strategic knowledge management context