THE IMPACT OF COORDINATION AND COMPETITION ON CROSS-FUNCTIONAL KNOWLEDGE SHARING AND ORGANISATIONAL PERFORMANCE Nguyen Phong Nguyen MBus (Monash University), BBus (UEH) A thesis submitted for the Degree of Doctor of Business Administration University of Western Sydney August, 2013 Revised January, 2014 ACKNOWLEDGEMENTS This thesis could not have been completed without the encouragement, guidance and support of a number of persons and organisations. In particular, I would like to express my deepest gratitude to Associate Professor Felicitas Evangelista for her invaluable academic advice and guidance as well as other support beyond her academic duty. I also thank Dr Yi-Chen Lan for his academic and administrative support from the beginning of the DBA program. I also would like to express my thanks to Associate Professor Brian Low from the School of Business, Monash University.
My appreciation also goes to Associate Professor Nguyen Dinh Tho for helping me with structural equation modelling. I would also like to thank my colleagues in the Faculty of Accounting and Auditing, University of Economics, Ho Chi Minh City, for their encouragement during the second stage of the DBA program. I am grateful to the academics from various universities and managers from participant organisations that have assisted me to complete the depth interviews and the pilot study, as well as the main survey. I also would like to acknowledge Elite Editing for editorial intervention that was restricted to Standards D and E of the Australian Standards for Editing Practice.
Last but not least, this is a perfect time for the son of his parents, husband of his wife and father of his newborn son to say thanks to his wonderful family. i STATEMENT OF AUTHENTICATION The work presented in this thesis is, to the best of my knowledge and belief, original based on raw data collected by me, except where due acknowledgement is made in the text. I hereby declare that I have not previously submitted this material, either in full or in part, for a degree at this or any other institution. Nguyen Phong Nguyen ii TABLE OF CONTENTS ACKNOWLEDGEMENTS.
I STATEMENT OF AUTHENTICATION. II TABLE OF CONTENTS. III LIST OF TABLES. VIII LIST OF FIGURES.
XIII CHAPTER 1: INTRODUCTION. Lack of Cross-Functional Knowledge Sharing Research concerning Coordination Mechanisms. Lack of Knowledge Sharing Studies concerning Coordination in the Context of Competition. Lack of Asian Studies on Cross-Functional Knowledge Sharing.
DEFINITIONS OF KEY TERMS. OUTLINE OF THE THESIS. 9 CHAPTER 2: LITERATURE REVIEW. AN OVERVIEW OF THE CONCEPT ‘KNOWLEDGE’.
The Epistemological Debates about Knowledge. Views and Definitions of Knowledge. Cross-Functional Knowledge Sharing. KNOWLEDGE MANAGEMENT IN THE CONTEXT OF BUSINESS ORGANISATIONS IN EMERGING ECONOMIES.
KNOWLEDGE SHARING OUTCOMES. KNOWLEDGE SHARING ANTECEDENTS. Properties of Knowledge. Properties of Organisation.
Research Gap – Cross-Functional Coordination. Cross-Functional Competition. AN EMERGENT VIEW OF COOPETITION. The Concept of Coopetition.
Coopetition and Cross-Functional Knowledge Sharing. Coordination and Intraorganisational Knowledge Sharing. The Synergy of Coordination and Competition. 44 CHAPTER 3: CONCEPTUAL FRAMEWORK AND HYPOTHESES.
CROSS-FUNCTIONAL KNOWLEDGE SHARING: SOCIAL CAPITAL THEORY. CROSS-FUNCTIONAL KNOWLEDGE SHARING: SOCIAL EMBEDDEDNESS THEORY. OUTCOMES OF CROSS-FUNCTIONAL KNOWLEDGE SHARING. CONTROL AND MODERATING FACTORS.
Control Variables of Cross-Functional Knowledge Sharing. Control and Moderating Variables of Organisational Performance. 64 CHAPTER 4: RESEARCH METHODOLOGY. QUALITATIVE PHASE – VALIDATING THE PROPOSED MODEL.
Sample Organisations and Informants. The Interview Process. QUANTITATIVE PHASE – TESTING THE PROPOSED MODEL. Unit of Analysis and Informants.
Sampling Frame and Sample Size. Measures of Constructs. The Issue of Common Method Bias. 87 CHAPTER 5: CROSS-FUNCTIONAL KNOWLEDGE SHARING IN SELECTED VIETNAMESE COMPANIES: SOME QUALITATIVE INSIGHTS.
OVERALL CROSS-FUNCTIONAL KNOWLEDGE SHARING. Knowledge Received by the Marketing Department. Knowledge Shared by the Marketing Department. THE ANTECEDENTS OF KNOWLEDGE SHARING.
Cross-Functional Coordination. Cross-Functional Competition. THE OUTCOMES OF CROSS-FUNCTIONAL KNOWLEDGE SHARING. Organisational Performance – The Innovativeness Effect.
Organisational Performance – The Market Orientation Effect. 121 CHAPTER 6: MEASUREMENT SCALES ASSESSMENT AND REFINEMENT. ASSESSMENT OF MEASUREMENT SCALES – BACKGROUND. ASSESSMENT OF MEASUREMENT SCALES USING EFA.
EFA Results for Individual Scales. EFA Results for All Scales. ASSESSMENT OF MEASUREMENT SCALES USING CFA. Estimation Methods and Overall Model Fit Measures.
CFA Results for Individual Scales. CFA RESULTS FOR SELECTED PAIRS OF SCALES. CFA FOR THE FULL MEASUREMENT MODEL. 144 CHAPTER 7: TESTING THE PROPOSED MODEL AND HYPOTHESES 147 7.
ASSESSMENT OF THE THEORETICAL MODEL. Structural Equation Modelling and the Two-step Approach. The Theoretical Model – Assessment and Estimation. TESTING OF HYPOTHESES AND DISCUSSING THE RESULTS.
Cross-Functional Knowledge Sharing Antecedents. Cross-Functional Knowledge Sharing Outcomes. The Effects of Control and Moderating Variables. SUMMARY OF THE RESEARCH FINDINGS.
CONTRIBUTIONS AND IMPLICATIONS. LIMITATIONS AND FURTHER RESEARCH DIRECTIONS. Further Research Directions. 198 vii LIST OF TABLES TABLE 2.
Summary of Knowledge Sharing Antecedents. List of the Most Common Coordination Mechanisms. Four Combinations of Coordination Mechanisms according to the Level of Formalisation and Programming. A Syncretic Model of Rent-Seeking Strategic Behaviour.
Effects of Negative Reverse Impact on Knowledge Sharing under Coopetition. The Effects of Different Types of Coordination Mechanisms on Intraorganisational Knowledge Sharing. Summary of Hypotheses to be Tested. List of Participants and Demographic Information.
Indicators of Decentralisation. Indicators of Formalisation. Indicators of Lateral Relations. Indicators of Informal Networking.
Indicators of Shared Vision. Indicators of Cross-Functional Competition. Indicators of Cross-Functional Knowledge Sharing. Indicators of Organisational Innovativeness.
Indicators of Market Orientation. Indicators of Organisational Performance. Indicators of Power Distance. Indicators of Competitive Environment.
Development of the Final Sample. Summary of Measurement Scales Items. The Outcomes of Cross-Functional Knowledge Sharing – Organisational Innovativeness and Market Orientation. Number of Respondents by Industry Type.
Number of Respondents by Organisational Size. Summary of EFA and CFA for Scale Assessment and Validation. Fixed Values of Error-term Variances of the Summates. The Modified Indicators for the Second-Order Constructs in the Full Measurement Model.
Summary of Properties of the Main Constructs. The Characteristics of the Variables in the Proposed Theoretical Model. Interaction Terms used in the Theoretical Model. Factor Loadings of Indicators on Respective Constructs.
Standardised Regression Weights of the Hypothesised Relationships. Correlation Matrix of the Focal Constructs. Summary of the Results of Hypotheses Testing. 167 ix LIST OF FIGURES FIGURE 2.
Modes of Knowledge Creation – SECI Process. Views of Knowledge in the Knowledge Management Literature. Cross-Functional Interactions between Departments. Mapping of Authors According to Paradigms in Strategic Management and Organisational Economics.
The Coopetition Framework and Underpinning Theories. A Proposed Model of Cross-Functional Knowledge Sharing. Cross-Functional Knowledge Sharing between Marketing and Other Departments. An Example of an Interaction Model Following Kenny and Judd (1984).
An Example of an Interaction Model Following Ping (1995). Modelling the Interaction Effects between Cross-Functional Competition and Five Coordination Mechanisms. Modelling the Interaction Effects between Competitive Environment and Innovativeness and Market Orientation. The Structural Paths for the Theoretical Model.
158 x ABBREVIATIONS ASEAN Association of South East Asian Nations CE Competitive Environment CFA Confirmatory Factor Analysis CFI Comparative Fit Index CFM Common Factor Model COMPE Cross-functional Competition DECEN Decentralisation dF Degrees of Freedom EFA Exploratory Factor Analysis EIASM European Institute for Advanced Studies in Management ERP Enterprise Resource Planning EURAM European Academy of Management FMCG Fast Moving Consumer Goods FOR Formalisation GSO General Statistics of Vietnam INFOR Informal Networking INNO Organisational Innovativeness IJV International Joint Venture ISO International Organisation for Standardisation IT Information Technology KMO Kaiser-Meyer-Olkin KS Knowledge Sharing LATERAL Lateral Relations ML Maximum Likelihood MO Market Orientation xi MSEM Moderated Structural Equation Model ODSM Objectives, Goals, Strategies and Management PCA Principal Component Analysis PERFORM Organisational Performance POWER Power Distance R&D Research and Development RMSEA Root Mean Square Error of Approximation SD Standard Deviation SECI Socialisation, Externalisation, Combination and Internalisation SEM Structural Equation Modelling SHARE Shared Vision SRMR Standardised Root Mean Square Residual TLI Tucker-Lewis Index χ2 Chi-square xii ABSTRACT Knowledge is a critical resource that provides organisations with a competitive advantage. It is widely recognised that knowledge sharing between marketing and other organisational functions can produce various benefits. Studies conducted in developed countries have suggested that coordination and competition are among the important factors affecting knowledge sharing. However, little research has been done to systematically examine the effect of these constructs on cross-functional knowledge sharing in the context of developing countries.
The specific objectives of the study are: (1) to investigate whether a coopetition framework could be built and applied to explain the level of knowledge sharing between marketing and other functional departments within an organisation; (2) to test the effect of different coordination mechanisms on cross-functional knowledge sharing in the presence of interdepartmental competition; and (3) to determine if knowledge shared between departments would lead to superior performance. Based on the extant literature on organisational knowledge sharing, social capital and the social embeddedness framework, a theoretical model was developed. In this study, both qualitative and quantitative approaches were employed. In the qualitative phase, the initial theoretical model was refined using data from depth interviews with managers.
Then, in the quantitative phase, the refined model was empirically tested using structural equation modelling of data obtained from 224 large business organisations in Vietnam. The results indicate that three coordination mechanisms (lateral relations, informal networking and shared vision) have a positive effect on cross-functional knowledge sharing while competition acts as a negative moderator between informal networking and cross-functional knowledge sharing. Finally, the results also show that cross-functional knowledge sharing helps improve organisational performance by facilitating organisational innovativeness and enhancing market orientation. This study contributes to the coopetition and the cross- functional knowledge sharing literature.
It provides empirical evidence to help explain and predict cross-functional knowledge sharing, in the presence of both coordination and competition. Key words: coordination, competition, cross-functional knowledge sharing xiii CHAPTER 1 INTRODUCTION 1. BACKGROUND In the age of globalisation and information explosion, knowledge is a critical resource that provides organisations with a competitive advantage (Argote & Ingram 2000; Grant 1996a; Teece 1998). Knowledge can be created and utilised by knowledge sharing (Ipe 2003; Nonaka 1994), which is ‘a process through which one unit (e.
group, department, or division) is affected by the experience of another’ (Argote & Ingram 2000, p. This process is cross-functional knowledge sharing, which refers to ‘collective beliefs or behavioural routines’ related to the ‘spread of learning’ among different departments within an organisation (Calantone, Cavusgil & Zhao 2002, p. The marketing literature suggests that knowledge sharing between marketing and other organisational functions1 can produce various competitive benefits (e. Luo, Slotegraaf & Pan 2006; Maltz & Kohli 1996).
These benefits are related to market learning and performance (Luo, Slotegraaf & Pan 2006), innovation (Hansen 1999; Lee & Lan 2010; Tsai 2001) and new product success (Atuahene-Gima & Evangelista 2000; Ernst, Hoyer & Rübsaamen 2010; Griffin & Hauser 1992). The knowledge sharing process is influenced by coordination (Willem, Buelens & Scarbrough 2006), which refers to integrating different parts of an organisation to achieve a collective set of tasks (Martinez & Jarillo 1989; Van de Ven, Delbecq & Koenig 1976). By establishing communication channels and facilitating cooperation (Willem & Buelens 2007; Willem, Buelens & Scarbrough 2006), coordination acts as a powerful device for aggregating different pools of knowledge in an organisation through a network structure (Reagans & McEvily 2003). This has been confirmed by several studies within the context of multinational corporations (e.
Ghoshal, Korine 1 The terms ‘function’ and ‘department’ are used interchangeably throughout this study. 1 & Szulanski 1994; Gupta & Govindarajan 2000) as well as single organisations (e. Tsai 2002; Willem & Buelens 2007; Willem & Buelens 2009). However, knowledge sharing between marketing and other organisational functions is said to be difficult (Luo, Slotegraaf & Pan 2006).