Heidi Olander

WHAT'S SMALL SIZE GOT TO DO WITH IT? PROTECTION OF INTELLECTUAL ASSETS IN SMEs

The knowledge protection/sharing dilemma related to innovation activities is becoming known to all firms, even though it is generally more notable for SMEs: the small size of the firms inherently creates a need for inter-organizational collaboration, but it also makes dealing with the related contradictories more challenging. One factor behind this is that the needed tools — such as the protection mechanisms of intellectual assets — may be more limited. In line with this notion, we examine the protection available for and used by small firms in their innovation activities. We approach the issue by conducting a review on the relevant literature, and use a qualitative multiple case study conducted in eight small companies to empirically study the issue. Departing from prior research, we consider protection of innovations by distinguishing between the intangibles needed in innovation activities and the actual innovation outputs, and combine these considerations to the knowledge protection/sharing dilemma.

DO SMEs BENEFIT FROM HRM-RELATED KNOWLEDGE PROTECTION IN INNOVATION MANAGEMENT?

In terms of innovation generation and management, creative employees are the most valuable resources in small firms. Thus, knowledge leaking and leaving are the major staff-related risks. Protecting HRM-related knowledge is one effective way of dealing with these challenges, although this is not always acknowledged by academics or by managers. It is particularly valuable in safeguarding the existing background knowledge of the firm, and thus the prerequisites for future innovation. The aim in this study is to shed light on what is a somewhat neglected protection and appropriability mechanism, and thus to enhance understanding of the role of HRM in protecting core company knowledge—especially in SMEs. These issues are explored in a review of the latest literature and a case study of 15 SMEs representing three industries. The theoretical contribution of the study is to introduce and empirically test a typology of five HRM-related knowledge-protection mechanisms: recruitment, education and training on matters of confidentiality, retaining employees, capturing and diffusing knowledge in-house, and monitoring.

Reasons for choosing mechanisms to protect knowledge and innovations

Purpose – Prior research has confirmed the usefulness of both formal and informal protection mechanisms for governing knowledge flows. However, there is lack of research on the motivation and needs driving firms in their choice of mechanisms for each situation. The aim of this paper is to examine the reasons for choosing formal or informal mechanisms. Design/methodology/approach – The hypotheses were tested on a sample of 209 companies engaged in R&D. A Partial Least Squares was used for the analyses. Findings – This study identifies statistically significant relationships between the protection need and the firms strategy. The results indicate that there is variance in the use of mechanisms when there is a specific motivation for seeking protection, and when the firm faces difficulties related to protection issues. Research limitations/implications – The data were gathered in a single country. The results may be different if practices in a culture based more on informal relations, with less efficient pa...

Human resources – strength and weakness in protection of intellectual capital

Purpose – Human resources in knowledge intensive industries create the basis for continuing innovation and subsequent firm performance. At the same time, they pose risks for the competitiveness of the firm: unwanted leaking of knowledge and intellectual capital to outsiders exposes firm-critical knowledge, and knowledge leaving with a departing key employee may jeopardise the firm’s projects. The purpose of this paper is to examine how human resource management can serve as a protection mechanism to diminish knowledge leaking and leaving via employees. Design/methodology/approach – The authors approach these issues through a case study utilising interview data from 22 interviews within two large research and development intensive firms. Findings – Human resources could be seen both as a strength and weakness of a firm with respect to knowledge protection. The findings indicate that there are numerous practices related to commitment, trust, motivation, and sense of responsibility available to deploy to str...

PERCEPTIONS OF EMPLOYEE KNOWLEDGE RISKS IN MULTINATIONAL, MULTILEVEL ORGANISATIONS: MANAGING KNOWLEDGE LEAKING AND LEAVING

Maintaining innovation potential means that ideas, and the people generating those ideas, should be at the firms disposal. Furthermore, the firm should be able to capture value from peoples ideas. Losing these people therefore poses risks. Managing these risks is challenging, especially without intra-firm consensus on their role. This study examines how and why perceptions of severity and management of risks related to knowledge leaving and knowledge leaking differ across organisational levels and different firm locations. Depending on what types of differences are present, and why similarities and differences emerge, managers can direct their attention to different control or commitment-enhancing practices to address the risk of harmful knowledge loss and imitation. They should do this in a manner that enables them to maintain the prerequisites for future innovation and a creative work environment, while at the same time allowing global coordination and local adaptation.

MISSION: POSSIBLE BUT SENSITIVE — KNOWLEDGE PROTECTION MECHANISMS SERVING DIFFERENT PURPOSES

Innovations have the potential to create value by generating rents (primary appropriability), or they can be used as background knowledge for further innovations and value creation (generative appropriability). Because these possibilities exist, organisations need to make strategic decisions on knowledge sharing with their partners in collaborative innovation. In best cases, primary and generative appropriability are complementarities rather than alternatives: Knowledge sharing with partners for new innovation could be made safer using formal and informal isolating appropriability mechanisms that improve controllability, thereby preserving rent generation possibilities and simultaneously allowing safe knowledge exchange. We use a quantitative sample of 209 Finnish firms to examine how different formal and informal appropriability mechanisms relate to value capture and creation, and whether these relationships are affected by the strategic goal to reduce imitation of competitors or to improve safe knowledge sharing to partners.

THE EFFECTS OF HRM-RELATED MECHANISMS ON COMMUNICATION IN R&D COLLABORATION

Prior research has shown that the level of communication has an effect on the learning outcomes in R&D alliances and, subsequently, on performance. The level of communication depends on issues such as the systems that enhance knowledge sharing and the factors that deter knowledge flows, such as tacitness of knowledge and (deliberate) barriers set up to limit knowledge transfer. Innovations and value can only be created through sufficiently open knowledge sharing. But on the other hand, too open knowledge sharing might outrun the value gained by innovations if the knowledge lost would leave the knowledge sharing firm vulnerable. Yet, there is still a lack of understanding on which factors are responsible of the level of communication and to what extent. In particular, it has often been forgotten that HRM-related mechanisms are not only functional within firms, but also between firms. Thus, in this study, the HRM-related mechanisms that contribute to both of these areas are examined by using empirical quantitative data gathered from 83 Finnish R&D intensive firms.

University-industry knowledge interaction: case studies from Finland and China

The paper examines the roles of formal governance and informal social networking in University?Industry (U-I) knowledge interaction in the context of high-tech Multinational Corporations (MNCs). The issue is approached by conducting a critical literature review with empirical cases from Finland and China. Previous studies on U-I collaboration focus primarily on one-way technology and knowledge transfer. This study argues that especially in the cross-cultural context of high-tech MNCs, more interactive types of knowledge interaction should be of key concern where there are various challenges of informal governance that include, for example, interpersonal trust, mutual commitment, frequency of communication and interaction, and awareness of cultural and knowledge-related gaps between collaboration partners.

Preserving prerequisites for innovation: Employee-related knowledge protection and organizational trust

Purpose The purpose of this paper is to study how the motivation in firms to safeguard the prerequisites of innovation relates to the strength of the employee-related protection mechanisms that deal with knowledge leaking and knowledge leaving, and the moderating effect of organizational trust in the relationship. Design/methodology/approach The hypotheses were tested on a sample collected in Finland from 80 companies engaged in R&D. A partial least squares was used for the analyses. Findings Knowledge leaking and leaving from a firm can be approached with both formalized and soft types of employee-related mechanisms; that the motivation to secure innovativeness positively relates to both forms; and that the presence of organizational trust is especially effective in reinforcing employee-related practices that can prevent knowledge leaving. Research limitations/implications The data were gathered in a single western European country and that may have affected the results. Practical implications The managers would do well to introduce both formalized and soft forms of protection so as to mitigate the effects of knowledge both leaving and leaking. Building on the findings of this study, managers could prioritize between the different categories and mechanisms depending on the market and industry they operate in. Originality/value This study adds to the literature by studying quantitatively the employee-related protection mechanisms and the effect of organizational trust in the usage of those mechanisms.

What Did You Expect to Happen? Aligning HR Practices with Knowledge Management Outcomes

HRM practices can be designed to influence not only employees’ creativity, but also an organization’s innovation capabilities and the management of related activities in general. Accordingly, a knowledge management question that ought to be constantly asked is the balance that organizations need to find between the two opposing goals of innovation activities: sharing knowledge between the players involved in innovation on one hand, and preventing vital knowledge from leaking and leaving the same activities on the other hand. This study addresses the questions of how different HRM practices relate to the incidences of both knowledge sharing, and knowledge leaking and leaving. Our findings indicate that different HRM practices lead to different outcomes, which thereby indicates that traditional and process approaches both carry out quite different functions.