| An organization's ability to innovate has been recognized as critical for successful adaptation to today's rapidly changing environment. A significant number of researchers have theorized and empirically tested the influence of existing knowledge on organizational adaptation abilities. Their results have yielded conflicting evidence regarding the influence of knowledge on organizational adaptation. Research on new product innovation has similarly produced mixed results regarding the influence of knowledge on new product creativity, although a strong link between knowledge and short-term financial performance has been demonstrated. This dissertation provides an explanation for the conflicting evidence regarding the influence of existing knowledge on new product innovation by demonstrating under what conditions existing knowledge positively influences the short-term financial performance of a new product, as well as its creativity. Specifically, cultural conditions that combine an internal with an external orientation and blend organic with mechanistic processes allow an organization to manage a paradox of cultural values in order to successfully utilize its existing knowledge base.; This study advances our understanding of new product development in several ways, particularly in regard to the influence of knowledge on short-term financial success and creativity. Broadening the focus, it also provides insight into the processes of organizational learning. Three key mediating processes between organizational knowledge and the relevant outcomes of new product creativity and new product short-term financial success are introduced: (a) innovative information, (b) information acquisition efficiency, and (c) shared interpretation. The need to balance conflicting cultural factors in order to achieve both creativity and short-term financial success simultaneously is demonstrated. While previous studies have focused on finding the one cultural organization type that is most effective, this research shows how a mix of cultural factors may be more beneficial. Additionally, the study demonstrates that a moderate organization structure---neither too mechanistic, nor too organic---enhances the influence of knowledge. Third, support for the concept of managing paradox is provided. |
