2. Literature review
2.1. Complementarity
The original concept “complementarities” was first introduced by Edgeworth [12] in which he defined activities as complements, if doing (more of) any one of them increases the returns to doing (more of) the others. By drawing on lattice theory1 and supermodularity,2 Milgrom and Roberts [10] and [11] proposed that some organizational activities and practices are mutually complementary and so tend to be adopted together, with each enhancing the contribution of the other. Therefore, the impact of a system of complementary practices will be greater than the sum of its parts because of the synergistic effects of bundling practices together.
Many researchers have investigated the complementary relationship among various business practices. For example, Black and Lynch [13] argued that, until recently, there had been very little direct analysis of the impact of workplace practices on productivity. They found some synergies among various workplace practices but concluded that the important issue is not whether an organization adopts a particular work practice but rather how that work practice is implemented in conjunction with other complementary practices. Bresnahan et al. [14] surveyed approximately 400 large firms to obtain information on the aspects of organizational structure such as allocation of decision rights, workforce composition, and investments in human capital. They found that these work practices are correlated with each other, and argued that these practices are part of a complementary system.
The complementarity concept offers a useful perspective to understand the complex relationships among KM strategies and practices.3 In our work, complementarity indicates a condition of increasing returns in which adopting (doing more) of an activity (e.g. implementation of certain KM strategy) has a higher payoff when simultaneously adopting (doing more) of a complementary activity (e.g. implementation of another KM strategy).
2.2. KM strategies and complementarity
A relatively small number of studies have addressed the relationship between KM strategies and organizational performance because of the difficulty in measuring and quantifying the value of knowledge. These studies can be classified into two categories depending on how they implicitly define the relationship among KM strategies as being either complementary or non-complementary. Illustrative studies in each of these categories are listed in Table 1.
2. Literature review
2.1. Complementarity
The original concept “complementarities” was first introduced by Edgeworth [12] in which he defined activities as complements, if doing (more of) any one of them increases the returns to doing (more of) the others. By drawing on lattice theory1 and supermodularity,2 Milgrom and Roberts [10] and [11] proposed that some organizational activities and practices are mutually complementary and so tend to be adopted together, with each enhancing the contribution of the other. Therefore, the impact of a system of complementary practices will be greater than the sum of its parts because of the synergistic effects of bundling practices together.
Many researchers have investigated the complementary relationship among various business practices. For example, Black and Lynch [13] argued that, until recently, there had been very little direct analysis of the impact of workplace practices on productivity. They found some synergies among various workplace practices but concluded that the important issue is not whether an organization adopts a particular work practice but rather how that work practice is implemented in conjunction with other complementary practices. Bresnahan et al. [14] surveyed approximately 400 large firms to obtain information on the aspects of organizational structure such as allocation of decision rights, workforce composition, and investments in human capital. They found that these work practices are correlated with each other, and argued that these practices are part of a complementary system.
The complementarity concept offers a useful perspective to understand the complex relationships among KM strategies and practices.3 In our work, complementarity indicates a condition of increasing returns in which adopting (doing more) of an activity (e.g. implementation of certain KM strategy) has a higher payoff when simultaneously adopting (doing more) of a complementary activity (e.g. implementation of another KM strategy).
2.2. KM strategies and complementarity
A relatively small number of studies have addressed the relationship between KM strategies and organizational performance because of the difficulty in measuring and quantifying the value of knowledge. These studies can be classified into two categories depending on how they implicitly define the relationship among KM strategies as being either complementary or non-complementary. Illustrative studies in each of these categories are listed in Table 1.
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