Exploring the asymmetric complementarity between external knowledge search and management innovation

This paper hypothesizes about and tests the conditions under which firms experience substitutional and complementary effects from the synchronous deployment of innovation search—in the form of external knowledge sourcing, and management innovation—in the form of new organizational processes, practices, and structures, on innovative performance. Theoretically, this represents an interesting puzzle as the extant literature offers two contradictory explanations regarding their synchronous effects, built on fundamentally different problem-solving mechanisms that expose distinct managerial challenges for coordinating external search activities. Specifically, we predict the existence of a substitutional effect between external search depth and management innovation, and a complementary effect between external search breadth and management innovation. We found strong evidence relevant to our theoretical predictions. Our study offers new theoretical insights regarding the synchronicity of innovation search and management innovation.