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Jack of all trades and master of knowledge: The role of diversification in new distant knowledge integration

Frank Nagle and Florenta Teodoridis

Strategic Management Journal, 2020, vol. 41, issue 1, 55-85

Abstract: Research Summary We consider the role of individual‐level diversification as a mechanism through which skilled researchers engage in successful exploration—recognizing and integrating new knowledge external to one's domains of expertise. To approach an ideal experiment, we (a) employ a matching procedure and (b) exploit the unexpected adoption of Microsoft Kinect as a motion‐sensing technology in research. We evaluate the impact of Kinect and its embodiment of new knowledge on a set of ability‐matched, diversity‐varying researchers without prior experience in motion‐sensing and find that diversified researchers explore more successfully than their more specialized peers. We also examine the role of personal preferences and professional incentives as antecedents of diversification and find that culture, age and intellectual freedom are positively associated with the propensity to diversify successfully. Managerial Summary Organizations where R&D is core to driving competitive advantage face important tradeoffs when hiring researchers. Specifically, diverse combinations of knowledge generate the most impactful discoveries. Yet, coordinating such combinations increasingly requires larger teams as knowledge accumulation causes researchers to specialize in narrower areas. How should organizations achieve the best balance? We argue and show evidence that diversified researchers, individuals routinely criticized for their lack of knowledge depth, are more likely than specialized researchers of similar ability to integrate new knowledge from beyond their domains of expertise to create impactful innovations. Therefore, organizations aiming to create competitive advantage by pushing the boundaries of knowledge should carefully consider the nuanced tradeoffs between specialized and diversified researchers when strategizing about hiring the optimal types of expertise.

Date: 2020
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Handle: RePEc:bla:stratm:v:41:y:2020:i:1:p:55-85