Knowledge leakage can be a result of a competitive work environment

The organization’s climate is crucial to managing proprietary knowledge within an organisation and preventing it from spilling over to competitors. This creates opportunities for learning and innovation. Knowledge that is shared with competitors can lead to a loss of competitive advantage.

A study byGiada Stefano (Bocconi University Milan, Milan) and Maria RitaMicheli(IESEG school of Management), published online ahead.Organization ScienceAccording to a study, employees are more likely share their knowledge within an organization where they feel a part of. They would rather share their knowledge with someone else than their own colleagues if they were employed by an organization that encourages coworkers to be better.

“We have a lot of knowledge about how companies can align employees’ behavior with the company’s goals through formal contracts such as non-disclosure agreements or financial incentives. Professor Di Stefano says that this paper examines how firms can achieve similar goals by relying on an individual’s intrinsic motivations to act in the organization’s best interests.

The European Organization for Nuclear Research (CERN), which is the largest particle physics laboratory worldwide, was the inspiration for the study. CERN is organized around research groups (referred to as “experiments”) that involve up to 3000 scientists and explore different aspects of physics. ATLAS and CMS are two of the most important general-purpose experiments at CERN. They are perhaps familiar to you as the experiments that led the discovery in 2012 of the Higgs Boson particle.

“These two organizations were created to compete with each other to ensure scientific discoveries are valid through independent replication. They also share many institutional linkages, use a common key resource (the accelerator), their headquarters are located in the same place. CERN describes them as “close sisters, the best friends and competitors all at the same time,” Di Stefano explains.

Although the experiments were similar on paper, ATLAS researchers spoke to ATLAS physicists to discuss how they felt more connected to the organization and how they had a stronger tendency not to share proprietary information with others. CMS, however, had scientists that were more competitive with each other and reported a greater propensity for knowledge transfer to members of the opposing organization.

These observations prompted the authors into a thorough field study at CERN to see if these differences in organizational climate might explain the different sharing tendencies. The data collection took four year, and the authors gathered insights through desk research, field observation, more than 50 interviews, and the results from one experiment with over 500 CERN scientists, as well two additional experiments with approximately 400 participants recruited online.

Di Stefano cites two aspects when asked about other management lessons. Our findings show that managers can take control of the organizational climate to reduce knowledge transfer. While creating a competitive environment is beneficial for many reasons it can also lead to knowledge spillovers to rivals. We also show that managers of complex organizations can have very different organizational characteristics. The most obvious consequence is the need for interventions that are tailored to each unit’s ‘personality.

Provided by
Bocconi University