Although considerable research has done on the role of knowledge in organizations, relatively little has focused on the availability of knowledge to related units of an organization. This purpose of this paper is to focus on the performance benefits of three types of knowledge resources: industry-, product- and market-based.
The archival sample consists of 4,882 commercial radio stations in the USA, each of which offer a specific format of programming within a well-defined geographic market. The authors contrast the effects of knowledge resources on the performance of stations operating independently or as part of smaller groups with those that are part of a national chain.
The results of this study provide strong evidence of higher performance for stations that are part of a larger chain because of access to greater pools of knowledge. Further, the authors find that although these performance effects are subject to diminishing returns, they are clearly amplified in highly competitive markets.
This study offers contributions to the knowledge-based view and intra-industry diversification studies by examining the positive effects the availability of knowledge can have for individual business units within a corporation. The results reveal that when individual business units have access to a greater degree of available knowledge, they are better able to compete against rivals in their respective markets.
