Knowledge Governance Mechanisms and the Theory of the Firm

The paper builds on existing empirical research on knowledge transfer and sharing in inter-firm and intra-firm networks, for constructing a comparative framework. The first comparative question addressed is: what types of organizational network can govern what types of knowledge network? Both the cognitive difficulty of communication and the incentive to give information turn out to be fundamental in finding an answer. The variables influencing those two dimensions are discussed (divergence in knowledge and preference, computational and epistemic complexity). The second comparative question is what the differences are between intra-firm and interfirm knowledge flows and knowledge governance mechanisms. The results of our analysis downplay the exclusive properties of firms in knowledge transfer/sharing respects hypothesised by the ‘knowledge-based theory of the firm’, and call for a more ‘continuous’ (rather than ‘discrete’) and ‘combinatorial’ (rather than ‘idealtipical’) notion of governance mechanisms and forms.