Knowledge strategy: Its relationship to environmental dynamism and complexity in product development

Abstract

Focusing on product development, this study extends the understanding of the environment-strategy framework and investigates the relative effect of two environmental variables, dynamism and complexity, on the product development knowledge strategy. Adopting a knowledge-based view, and assuming that the strategy's locus is knowledge creation (exploration) and knowledge application (exploitation), the study suggests that the development of a knowledge strategy is a managerial strategic choice that is related to the environment. The results of a survey on product development managers generally indicate that exploration and exploitation must be combined according to environmental factors by generating the alternative knowledge strategies of ambidexterity or punctuated equilibrium. Particularly, the study finds that in environments characterized by high levels of both dynamism and complexity product development efforts pursue and reinforce both explorative and exploitative activities through a knowledge strategy of ambidexterity. Though not perfectly supported, punctuated equilibrium seems to be a more plausible knowledge strategy in environmental contexts where either dynamism or complexity prevails. © 2010 John Wiley & Sons, Ltd.