How knowledge-source utilization influences adaptation success in turbulent environments: Evidence from transition economies

Abstract

We investigate the utility of knowledge sources (employees, top management, external sources) for organizational adaptation in contexts of varying environmental turbulence. To successfully adapt, firms require knowledge on what and how to change. Building on the knowledge-based view, we argue that knowledge sources vary in their ability to update knowledge that fits the focal firm’s knowledge requirements. We propose that the source’s focus of attention and recency of interaction with focal firm specificities influence the source’s knowledge-updating ability. Survey data from 438 firms in four transition economies indicate that as turbulence increases employees have higher utility regarding what to change, while top management demonstrates higher utility regarding how to implement changes. Our work provides theoretical insight on the contingent effect of environmental turbulence on knowledge-source utility. JEL Classification: L1, M1, P2