Research: Struggling Firms Seek External Knowledge

University of Exeter

People in low-performing organisations are more likely to look to others working elsewhere to access new knowledge and practices, a new study shows.

Those in high performing organisations are more likely to search for help from colleagues.

The research suggests low-performing, risk-tolerant organisations could benefit most from searching across boundaries for new knowledge. High-performing, risk-averse organizations could benefit from internal searches to refine existing routines.

The theory was tested by analysing New York City public schools' responses to information about academic performance.

The lowest-performing schools encouraged collaboration with teachers from other schools and had a much higher level of cross-school collaboration.

Those with higher performance grades were more likely to collaborate within their own organisation, while showing less need to search across organisational boundaries.

Those in schools with the lowest performing, 'not meeting target', encouraged their teachers to collaborate with and learn from colleagues from other schools to improve student academic achievement. These low-performing schools had a much higher level of teachers working with colleagues across school boundaries.

Researchers analysed schools' participation in a collaboration programme, the Learning Partners Program (LPP). The programme matched 5 to 7 schools as a network so teachers could learn from an exemplary school that exhibited expertise in a particular area, such as supporting students with disabilities.

The participation rate of the Learning Partners Program increased when organisations received a low performance grade, while high-performing groups showed less willingness to participate. This indicates that search patterns change not only in perception (as measured by our survey items), but also in actual behavior.

Dr Taek Kyu Kim, from the University of Exeter, who led the research, said: "Teachers in lower performing schools reported more opportunities to work productively with colleagues from other schools. Those in schools that receive the higher performance signal showed a higher level of within-school collaboration. These patterns indicate that performance feedback is associated with systematic differences in the direction of search rather than a uniform tendency towards local problem solving."

"The results suggest that searching sequentially from local to distant search may not be an optimal approach for low-performing organizations. It is not always beneficial for low-performing organizations to start searching locally because it may consume unnecessary time and resources. They may be better off directly searching beyond organizational boundaries, which is more likely to generate innovative solutions to their performance problems."

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