The Relationship Among Relational Embeddedness, External Knowledge Search And Firms’ Innovation Performance

Nowadays, with the increasingly competitive knowledge economy, innovation has become an indispensable and important factor for an enterprise’s survival and development. All of the development of a new product, the improvement of a service level and the change of a process flow possibly wins the competitive advantage for the enterprise, In this process, the enterprise as a living organization and its employees with updated knowledge as well as improved learning ability directly determine the enterprise’s innovation ability level. With the constantly emerging of the globalization, closed innovation has not met the requirement of the enterprise’s development. It has become a key factor that stands in the front of the market for the enterprise to improve its learning ability and innovation ability by using external sources. So, open innovation is obviously important. Moreover, degree of openness of the enterprises closely related to its role in the social network. Therefore, based on relational embeddedness, this paper investigates the mechanism of relational embeddedness’s impact on innovation ability of the enterprise.Even though there are a large number of studies that refer to the relationship between relational embeddedness and innovation ability, they form relational embeddedness paradox. It implies the diversity and richness for relational embeddedness’s impact on innovation ability, and opens the opportunity for this study. This study performs its research from the perspective of external knowledge search level. The enterprise as a living organization is affected by many various internal and external factors, and is difficult to get rid of the background. Hence, this study uses case study research method as a main research technique to explore the relationship among core variables.Under the background of globalization, many countries have great development, and so do Thailand. However, Thailand is a developing country now. It is much less than developed countries such as European and American, etc. in aspects of knowledge innovation and the-ability of knowledge absorption. Many enterprises in Thailand begin to adopt the open innovation development strategy. So this study selects five Thailand enterprises as a case study sample. This paper examines the relationship of relational embeddedness, external knowledge search and innovation performance by detailed and careful case study.This study attempts to answer three research questions:the relationship between three dimensions (trust, information transfer and joint-problem solving) in the process of enterprise cooperation and external knowledge search level (depth and scope) of the enterprise; how two external knowledge search strategies affect the enterprise’s innovation performance; how the enterprise’s relational embeddedness affects its innovation performance under the perspective of external knowledge search.In this study, we firstly collect the behavior or specific case related to the core variables by conducting semi-structured interview to six senior executives in five Thailand enterprises. Then, we refine the first order, second order and aggregate dimension related to the core variables, and tease out theory dimension of the core variables. And thereafter, we induce the causal relationship among relational embeddedness, knowledge search and organizational innovation, and propose research propositions on the basis of the encoded interview information.On the basis of the above research work, this paper’s main discover is:The enterprise’s relational embeddedness leads to improvements in enterprise innovation performance by the improvement of external knowledge search including search depth and scope.The enterprise’s relational embeddedness is positively related to its external knowledge search depth and scope, and the enterprise’s external knowledge search depth and scope is positively related to its innovation performance. Namely, the enterprise in social network can enhance its relational embeddedness, improve the depth and width of external knowledge search and act on innovation more efficiently.In a word, this study not only has theory significance but also plays a directive role on practice. This study further expands the organization learning theory, explain the influencing mechanism of the width of external knowledge search and make up for imperfects in width of knowledge search. In practice, this study has implications for the enterprise’s learning ability management and external knowledge search strategy.