Stopping the Tide

A STUDY CONDUCTED ON CERN RESEARCHERS SHOWS THAT BY ACTING ON THE ORGANIZATIONAL CLIMATE, JOB DESIGN, AND THE SOCIALIZATION REGIME, THE PHENOMENON OF KNOWLEDGE SPILLOVER CAN BE PREVENTED. THE SAME GOES FOR A FORPROFIT COMPANY

by Giada Di Stefano e Maria Rita Micheli, assistant professor at Department of management technology and assistant professor at Ieseg Paris

Employees are crucial repositories of a firm’s proprietary knowledge, and as such important conduits for potential spillovers thereof. Employees can leave a firm to join a competitor or create a firm of their own, but also, more simply, they may talk to employees from other organizations. Independent of the reasons why employees engage in such conversations, and whether they are aware of the harm caused, such knowledge leakages erode a major source of an organization’s competitive advantage and constitute a serious threat to its survival and prosperity. It is hence reasonable to expect organizations to put in place protection mechanisms that shield them against such threat. Such an objective can clearly be achieved by designing financial incentives or imposing contractual obligations. But what if, instead of focusing on regulating behavior through rewards and penalties, firms could just make sure employees were intrinsically motivated to act in the best interest of the organization?
Back in 2016 my co-author and I embarked on an exciting journey into the world of physics, with the goal of understanding how knowledge flows among teams of researchers working at CERN, the European Organization for Nuclear Research, operator of the world's largest and most powerful particle collider. This context may seem distant from those of for-profit firms, but the two organizations subject to our investigation are more typical than one might think. Their employees work across geographical boundaries, through a mix of digital and physical interactions, in hierarchical structures that are quite flat and leave room for personal initiatives. And despite the absence of legal consequences for transferring knowledge across organizational boundaries, engaging in such behavior can seriously affect one’s career progress and reputation.

We conducted an extensive field study of ATLAS and CMS, the two largest, general-purpose experiments at CERN, which were created in competition with one another to ensure the validity of scientific discoveries through independent replication. In this context, if knowledge flows from one experiment to the other, independence is compromised and claims of priority are in jeopardy, along with access to human and financial resources. The single employee, on the other hand, may benefit from exchanging knowledge with members of the other experiment, as this can give them access to complementary insights. The fact that the two organizations share institutional linkages (through CERN), employ the same key resource (the collider), and are physically colocated (in Geneva, Switzerland) clearly does not help discourage interactions. Insights from desk research, field observations, interviews with over 50 physicists and a lab-in-the-field study involving over 500 members of ATLAS and CMS, suggest that these two organizations have opposite tendencies when it comes to sharing knowledge, tendencies that we connect to differences in their organizational climates. We test our intuitions by means of two laboratory experiments involving around 400 individuals – thus extending our results to a broader population. Our findings suggest that members of an organization are more likely to transfer knowledge to their colleagues when they identify as an integral part of the organization. But they would rather transfer knowledge to outside competitors, when the organization they belong to encourages them to outperform coworkers.

We further uncover how, even in the presence of an unfavorable organizational climate, the transfer of knowledge across organizational boundaries may be prevented by acting upon the single employee through his or her job design and socialization regime. The use of these organizational and individual levers contributes to better align the goals of the individual to those of the organization, and stem the tide of knowledge spillovers.