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A structural model of supply chain performance in an emerging economy
Jie Yang
a a

School of Business Administration, University of Houston – Victoria, 14000 University Blvd, Sugar Land, TX 77479, USA Published online: 11 Aug 2011.

To cite this article: Jie Yang (2012) A structural model of supply chain performance in an emerging economy, International Journal of Production Research, 50:14, 3895-3903, DOI: 10.1080/00207543.2011.603373 To link to this article:

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2011. The results also indicate significant moderating effects of cost and innovation orientations on supply chain capabilities. Narasimhan and Nair (2005) tested a model conceptualising buyer-supplier relationship architecture and performance by sampling members of APICS (Association for Operations Management) and NAPM (National Association of Purchasing Management) in the US. Firms share explicit knowledge through the codification process. Employing path analysis. there is a lack of evidence whether such efforts in knowledge management lead to improved supply chain . and future research directions are also suggested. supply chain capabilities can be developed by inducing a robust reduction of the bullwhip effect (Pereira et al. Thornhill (2006) proposed a framework of the contingency effects of knowledge and training on the link between firm-level innovation and revenue growth. respectively. such as cost and innovation orientation. cost efficiency and innovation capability are two critical measures for supply chain *Email: jieuhv@gmail. theoretical and anecdotal evidence of knowledge’s potential for value creation in improving supply chain capabilities remains sparse. Cost and innovation orientations match with the two supply chain strategies. TX 77479. 14. explicit and tacit knowledge (Grant 1996). including cost efficiency and innovation capabilities. University of Houston – Victoria. Supply chain performance is determined by the degree of fit between ideal profiles of knowledge elements and strategies (Hult et al. A linear regression on the data collected from 845 Canadian manufacturing firms shows a significant moderating effect of training on the link between innovation and growth. Hult et al. While firms focus on the improvement of supply chain capabilities. it is shown that strong associations exist between the sharing of both explicit and tacit knowledge and the development of supply chain capabilities. including external integration and interorganisational breadth and initiation (e. 2009) and implementing supply chain process integration (Chen et al. Thus. Sugar Land. supply chain. 2004). Prior studies on Supply Chain Management advocate that supply chain capabilities such as process efficiency are determined by interorganisational systems.tandfonline. is untested in the context of Chinese manufacturing firms. this study also examines the contingency role of cost and innovation in the relationship between knowledge sharing and supply chain capabilities. For example. final version received 29 June 2011) Drawing on a knowledge-based view and strategic choice theory. which in turn exert effects on the improvement of supply chain performance. 2006). For the buyer and supplier dyad. capability. thereby creating value for the firm. 3895–3903 A structural model of supply chain performance in an emerging economy Jie Yang* School of Business Administration. Introduction Nowadays. There are two types of knowledge. No. 2005). this study develops and empirically tests a conceptual framework to assess the effect of knowledge sharing on the development of supply chain capabilities and the effects of such capabilities on supply chain performance. but between chains. while they share tacit knowledge through personalisation. A broad body of studies has linked knowledge to supply chain improvement.1080/00207543.doi. However. 15 July 2012.International Journal of Production Research Vol.g. Keywords: knowledge sharing. USA (Received 1 April 2011. Supply chains with strategic resources have advantages over chains lacking such resources (e. A large body of research highlights the importance of supply chain capabilities as a critical dynamic resource. Modi and Mabert (2007) revealed a strong connection between operational knowledge transfer activities and supplier performance improvement by surveying 215 supplier development experiences from US manufacturing firms. 14000 University Blvd. Furthermore. Managerial and theoretical implications are discussed. 50. A significant effect of information sharing and trust with suppliers on the supply chain proximity has been identified using a structural equation modelling.603373 http://www. competition is not between firms. Low-cost defenders and differentiated defenders are two popular strategies proposed by Walker and Ruekert (1987). Saeed et ISSN 0020–7543 print/ISSN 1366–588X online ß 2012 Taylor & Francis http://dx. performance Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 1. 2009).org/10.g. the role of other factors. orientation.

While establishing theoretical foundations for knowledge sharing and a firm’s orientation. which enables the firm to create innovative products to meet the quickly changing needs of customers. decision trees. A collaborative supply chain through effective knowledge sharing enhances continuous . Tacit knowledge is contextual and gained through experience and interactions among individuals and between individuals and processes (Nidumolu 2001). Tacit knowledge is best shared through face-to-face communication since it is embedded into the practices and communications of individuals (Fahey and Prusak 1998). lowered operational cost. Strategic choice theory illuminates how the two knowledge strategies interweave with low-cost defenders and differentiated defender strategies (Walker and Ruekert 1987). this study includes cost and innovation orientation in the conceptual model as two moderators to assess the effects of cost and innovation orientations on the links between knowledge sharing and supply chain capabilities. Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 2. Finally. Personalisation is a strategy focusing on developing social network. The amount of optimal current knowledge sharing efforts is lower when both buyers and suppliers have already made prior knowledge sharing efforts (Samaddar and Kadiyala 2004). This strategy requires high investment in research and development and the knowledge sharing process. in their efforts to improve supply chain capabilities. the following three research questions are proposed. Codification is an effective strategy for sharing explicit knowledge. In line with the two strategies of low-cost defenders and differentiated defenders. It emphasises a face-to-face communication for the sharing of technical and cognitive knowledge that is personal and hard to formalise in the documentation. The codification of explicit knowledge can be achieved through a variety of techniques such as cognitive mapping. limitations and suggested future research. Does knowledge sharing (explicit and tacit knowledge) create value in improving supply chain capabilities (cost efficiency and innovation capabilities)? Which roles do cost and innovation orientations play in the improvement of supply chain capabilities? Do cost efficiency and innovation capabilities improve supply chain performance? The paper has been organised as follows. and tacit knowledge is shared through managed conversation. Accordingly. the paper concludes with a discussion of implications. the buyer and supplier dyad can achieve a reduced cycle time. Through individual communications and informal meetings. the sharing of explicit knowledge (through codification) and tacit knowledge (through personalisation) fits the low-cost and differentiated defenders strategies. the knowledge and skill base are building up for enhanced creativity within the organisation. respectively. In the interface between sharing knowledge and improving supply chain capabilities. research methods are discussed. The socialisation process includes joint activities. which is a world where individuals share feelings. and analysis and results are explained. which brings buyer and supplier closer and makes explicit knowledge sharing seamless for the partners. Yang capabilities. On the other hand. emotions. Low-cost defenders focus on lowering costs of supply chain activities to keep a viable market demand. The knowledge-based view asserts that knowledge contributes significantly to an intangible strategic resource in supply chains (Grant 1996. explicit knowledge can be combined with existing knowledge through cyber Ba. experiences and mental models. and improved product quality due to the simultaneous access to the required information. First. Theoretical background and hypotheses development This study is grounded in the knowledge-based view and strategic choice theory. theoretical background and hypotheses development are presented.1 Effects of knowledge sharing on supply chain capabilities Explicit knowledge is viewed as information because of its codifiability. differentiated defenders emphasise creating value by offering innovative products to the volatile market. A high degree of explicitness is associated with a high degree of articulability (Nonaka and Takeuchi 1995). Codifiable or explicit product-based knowledge transfers effortlessly compared to less articulable knowledge (Wagner and Buko 2005). The sharing of tacit knowledge is a socialisation process through originating Ba. the unit cost of the product and manufacturing overhead costs are reduced. Information sharing and trust between buyer and supplier exert a direct positive effect on supply chain proximity (Narasimhan and Nair 2005). By sharing the documented information through information technology.3896 J. 2006). Hult et al. As a result. which is supported in collaborative environments by means of information technology to share the codified documentation. 2. Then. this study takes the firm’s cost and innovation orientations into consideration since the orientations are critical to the knowledge strategies in achieving high supply chain capabilities. Nonaka and Konno (1998) stated that for the sharing of explicit knowledge. knowledge taxonomies and task analysis (Dalkir 2007).

2 Moderating effects of cost and innovation orientations on supply chain capabilities Knowledge strategies focusing more on codification are appropriate when a firm is cost oriented because sharing codified and documented knowledge is not expensive. These capabilities enable a firm to maintain a competitive advantage with a focus on creating value for customers.International Journal of Production Research 3897 innovation (Soosay et al. assimilate it and apply it to commercial ends is critical to the firm’s innovative capacity (Cohen and Levinthal 1990). To achieve superior performance. In this process.3 Effects of supply chain capabilities on supply chain performance For the buyer and supplier dyad. A cost orientation is likely to facilitate the valueharnessing process of cost efficiency from explicit knowledge sharing. access to strategic information and familiarity with the environment of the firms. Minor changes have been made according to the feedback in the pilot study. A senior manager completed the survey on behalf of his/her firm. Hypothesis 6. An innovation orientation promotes an atmosphere of creativity and new product offerings. Hypothesis 2. Hypothesis 4. which originate from the effective tacit knowledge sharing. It is posited that Hypothesis 3. 2. Thus. The value congruency suggests that after a firm has developed minimum supply chain capabilities (e. Innovation capabilities are a reflection of skills and accumulated new knowledge that are exercised through organisational processes. The relationship between tacit knowledge sharing and innovation capabilities will be stronger when an innovation orientation exists. Explicit knowledge sharing with suppliers is positively related to the improvement of the buyer’s cost efficiency. lower operational costs are significantly related to the excellence of the dyads. president and other managers. Hypothesis 1. because of their knowledge of the operations of their businesses and privilege . It has been found that performance measures are determined by the firms’ capabilities (Morash and Lynch 2002). The questionnaire was sent to these firms. Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 2. Methods 3. the firm reduces cycle time. The relationship between explicit knowledge sharing and cost efficiency will be stronger when a cost orientation exists. 3. Innovation capabilities exert positive effects on supply chain performance. chief operating officer. a supply chain must improve its innovation capability to fit the market characteristics of its products. The respondents from the firms include chief executive officer. intensive research and development. A pilot study was undertaken to ensure that respondents encountered no difficulties in completing the survey questionnaire. When a firm is cost oriented. An innovation-oriented firm is able to create value for customers by continuously offering new products through new idea creation. together with a letter explaining the purpose of this study and offering to share the research results if respondents returned the completed questionnaire. Hypothesis 5. 2008). This enables the firms to make use of their assets and functions as a key success factor (Day 1994). it emphasises utilising existing information without largely investing in acquiring new knowledge. The firm’s ability to recognise the information’s value. Tacit knowledge sharing requires a substantial investment in promoting an originating Ba for socialisation (Nonaka and Konno 1998). and incentives for creativity. it should concentrate on those capabilities and performance metrics that support value creation. Cost efficiency exerts a positive effect on supply chain performance. Therefore. Such firms have an organisational culture of innovation. brain storming. Tacit knowledge sharing with suppliers is positively related to the improvement of the buyer’s innovation capabilities. The key informant approach has been widely used in empirical studies because of the knowledge of the key informants.1 Sample and data collection Data has been collected in Shanghai to test the above hypotheses by means of a survey questionnaire sent to the top 500 firms classified as manufacturing in the Shanghai Statistics Bureau’s industry classification system. saves resources and increases its performance image in the marketplace (Morash 2001).g. cost efficiency and innovation capabilities) to be order qualified.

Cost efficiency was measured by two items drawn from Swink et al. product quality and customer service levels as compared to the respondent firm’s major industrial competitors. and the results showed no issue of non-response bias. management actively seeks innovative ideas. value creation for customers and organisational intelligence. average selling price. Follow-up phone calls were made to all potential respondents who had not returned the surveys after four weeks. 3. Profile of the respondent firms. Yang Table 1. To detect the threat of common method variance .2% 6. reflecting the firm’s unit cost and total manufacturing overhead cost.3898 J. The surveyed firms represented different industries and included those from the following sectors: electronics. and innovation is perceived as risky and is resisted.1% 7. capturing the degree of improvement of operating efficiency and production processes and the reduction of operating cost.7% 12. and includes three items reflecting the existence of ‘Ba’.) Percentage 42. For cost orientation. Supply chain performance was adopted from Narasimhan and Nair (2005).4% 24. We did the same comparison between the responding and non-responding firms. yielding an effective response rate of 27%. we adopted the measures from the work of Calantone et al. which includes two items reflecting the extent to which the firm uses a formal knowledge sharing agreement to share information with suppliers.1% 6. telecommunications. A comparison of the early responding firms with the late responding firms showed that these groups did not differ in terms of number of employees. The measures in this study were drawn from several sources.4% 2. reflecting the extent to which the technical innovation is accepted. etc. return on assets (ROA).3% 10.01). (2005). emphasis on creativity. construction. (2002).3% 8. We acknowledge that the potential problems of perceptual measures may have led to a common method bias.5% 3.7% Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 to access the necessary data for the survey. pharmaceuticals. 137 usable questionnaires were returned.6% 5. chemicals.2 Measures All multi-item variables were measured on a seven-point scale to ensure a uniform scale width.2% 28. (2002). sales revenue and years in business in this study (p 4 0. The measure of tacit knowledge sharing was based on the studies of Hult and Ferrell (1997). To measure innovation capability. Some items were adapted and re-worded to fit the present context. tapping the degree of knowledge and skill base. The measure of explicit knowledge sharing was adapted from Tan et al.g.7% 6. Sample firm characteristics such as number of employees of the firm and industry it belongs to are shown in the Table 1. automobile manufacturing and new materials and energy. Table 1 shows the profile of the respondent firms.3% 10. indicating the degree of performance in terms of market share.1% 4.4% 21. Nonaka and Konno (1998) and Jones (2005). mechanical engineering. Sample firm characteristics Number of employees 1–400 401–800 801–1200 1201–1600 1601–2000 2001 or above Unknown Industries Chemicals Electronics Telecommunication Mechanical engineering Pharmaceuticals Construction Automobile manufacturing New materials and energy Others (e. a context for sharing knowledge with suppliers. (1999). Innovation orientation was measured by the three items developed by Hurley and Hult (1998). the measure was based on the work of Kotha and Vadlamani (1995) and Homburg et al. textiles. As a result.

as suggested by Podsakoff and Organ (1986). 4. the common method variance did not appear to be a problem in this study (Podsakoff and Organ 1986). Model fit index 2 ¼ 544. Seven factors with eigenvalues greater than one were extracted from all the measurement items.78) 1. Tacit knowledge sharing ( ¼ 0. 3. Our firm placed emphasis on creativity through substantial investment in R&D. Our knowledge and skill base is building up at the right pace. 2.79 0.85.86 0. Please indicate the level of your firm’s performance in terms of average selling price (higher performance means higher average price) as compared to your major industrial competitors.90. Construct measurement.54 0.93 0. proportion of variance extracted: 0.91 0.88. 3. 3.93. we conducted Harmon’s one factor test. 2. Suppliers and customers are encouraged to express their ideas.95 0. 4. and they altogether explained 85. We continuously seek to improve production processes so that we can lower costs. df ¼ 209.79) 1.86 0. Technical innovation based on research results is readily accepted.91 Standardised loading 0. proportion of variance extracted: 0. 5. Improving the operating efficiency of the business is a top priority. Our firm has harnessed organizational intelligence and managed technology to increase innovation. proportion of variance extracted: 0.90 (p ¼ 0. we performed confirmatory factor analysis on the measurement model using Lisrel.86 0.64 0. Innovation capability ( ¼ 0. NNFI ¼ 0. proportion of variance extracted: 0.87.89 0. CFI ¼ 0.93. 3.93. Supply chain performance ( ¼ 0. p ¼ 0.71 0. 2. df ¼ 209.00). 2. proportion of variance extracted: 0. There exists a shared context for sharing knowledge with suppliers and customers.93. Please indicate the level of your firm’s performance in terms of return on assets as compared to your major industrial competitors. Unit cost.70 0.89.97 0.51) 1. 2. Total manufacturing overhead cost. Use formal knowledge sharing agreement/corporate guideline with suppliers.72. We always analyse unsuccessful endeavours and communicate the lessons learned widely with suppliers and customers.74 0. CFI ¼ 0.84 0.82 0.International Journal of Production Research 3899 associated with the use of perceptual measures. Cost orientation ( ¼ 0.01% of the variance. Since no single factor emerged that accounted for most of the variance. Innovation is readily accepted in program/project management.66 . Our firm is able to identify and create new value for customers. Management actively seeks innovative ideas. The results of this analysis and the proportion of variance extracted for each construct are summarised in Table 2.3 Reliability and validity analyses In examining the convergent and discriminant validity of the theoretical constructs.80. Our suppliers have the same formal information as we have. reliability and confirmatory factor analysis.74) 0. Please indicate the level of your firm’s performance in terms of market share as compared to your major industrial competitors.75 0.51) 1.67) 1.32% of the variance. IFI ¼ 0.55 0. IFI ¼ 0. with the first factor accounting for 24. 2. Innovation orientation ( ¼ 0. Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 Measures Explicit knowledge sharing ( ¼ 0.91). Cost efficiency ( ¼ 0. NNFI ¼ 0. We have a continuing overriding concern for operating cost reduction. Please indicate the level of your firm’s performance in terms of overall product quality as compared to your major industrial competitors. The fit indices suggest a satisfactory fit for the model (2 ¼ 544. Please indicate the level of your firm’s performance in terms of overall customer service levels as compared to your major industrial competitors. 2. proportion of variance extracted: 0. 3. 3.79 0. The proportion of variance extracted Table 2. proportion of variance extracted: 0.82 0.64) 1.

70. hypotheses H2.00. The results suggested that the measurement items share common variance with their hypothesised constructs more than with the other constructs.01).95.94). df ¼ 9. p ¼ 0. which is contradictory to the proposed hypothesis. the results indicate a negative relationship between explicit knowledge sharing to cost efficiency. H4 and H6 are supported (p 5 0. indicating a good evaluation of reliability of these constructs.95. As a result. the results suggest a negative relationship between these two measures (. 4. Analysis and results We examined the hypothesised structural relationships using path analysis by means of Lisrel. the results indicate that the overall fit of the model is acceptable (2 ¼ 28. All theoretical constructs had a Cronbach above 0. H3. Yang estimates of all the theoretical constructs were above the 0.50.92. CFI ¼ 0. Unexpectedly. The completely standardised parameter estimates and t-values for each hypothesised path are presented in Table 3.3900 J. Hypothesis 1 predicts a positive effect of explicit knowledge sharing on cost efficiency. Overall.5 threshold and were found to be greater than the squared correlation between any pair of them. NFI ¼ 0. The measures and scale reliability for the theoretical constructs are reported in Table 2. offering evidence of discriminant validity. Contrary to the expectation. GFI ¼ 0. The results of the confirmatory factor analysis also show that all the measurement items loaded on the expected factors had loadings above 0. IFI ¼ 0. H6 does not receive support.71.

19). t ¼ À3. and results support this hypothesis at significance level p 5 0.00 (.43. Hypothesis 2 proposed a positive association between tacit knowledge sharing and innovation capability. ¼ À0.

¼ 0. t ¼ 3. Cost orientation has a significant moderating effect on the link between explicit knowledge sharing and cost efficiency (.53).28.

innovation orientation exerts a significant effect on the association between tacit knowledge sharing and innovation capability (. indicating that Hypothesis 3 is strongly supported. t ¼ 3.49. ¼ 0.65). On the other hand.

43** 0. thus.001.49 Overall fit indices: Goodness of fit index (GFI) Normed fit index (NFI) Comparative fit index (CFI) Incremental fit index (IFI) Note: **p 5 0.94 0. Contrary to our expectations. t ¼ 7. The results of the analysis also show a strong relationship between innovation capability and supply chain performance.53 3. In particular. respectively.38*** t-statistic À3.86). However. Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 Table 3.92 0. Path coefficients for the structural equation model. . A surprising finding of the study is that a strong negative relationship between explicit knowledge sharing and cost efficiency has been identified. explicit knowledge sharing and tacit knowledge sharing have been shown to have significant effects on supply chain cost efficiency and innovation capability. (2) the effect of tacit knowledge sharing on innovation capability and the moderating effect of innovation orientation on the connection.49*** 0.95 Path coefficient À0.16 0.01. and the links are strengthened by the cost and innovation orientations. indicating a support for Hypothesis 6. Results show that four out of six hypothesised relationships are strongly supported. the effect of cost efficiency on supply chain performance is marginal. and (3) the effects of cost efficiency and innovation capability on supply chain performance. Hypothesis 5 is not supported.62. ¼ 0. ***p 5 0. Proposed path H1 H2 H3 H4 H5 H6 Explicit knowledge sharing to cost efficiency Tacit knowledge sharing to innovation capability Explicit knowledge sharing_cost orientation Tacit knowledge sharing_innovation orientation Cost efficiency to supply chain performance Innovation capability to supply chain performance Expected sign þ þ þ þ þ þ 0. To summarise. Supply chain performance is dependent on innovation capability.95 0.19 3. this study examines: (1) the effect of explicit knowledge sharing on cost efficiency and the moderating effect of cost orientation on the link.90 4.28*** 0. which strongly supports Hypothesis 4.62*** 0. cost efficiency does not contribute to the improvement of supply chain performance.86 1.65 7.

g.1 Managerial and theoretical implications Based on the findings of this study. the cost efficiency will decrease with increased sharing of explicit knowledge. which captured the . this study reveals a strong connection between innovation capability and supply chain performance. First. which reflects the improved financial performance. However. It has also assessed the effects of cost efficiency and innovation capability on supply chain performance. Cheng et al. several implications are offered to practitioners and researchers. 5. The finding supports our theorising. Unexpectedly. high and low costs of knowledge acquisition result in higher financial performance of new products (Yang et al. Second. This study extended the literature on knowledge sharing and supply chain capability from knowledge-based and strategic choice perspectives. thus. when it reaches a certain level. high cost efficiency does not lead to the improvement of supply chain performance. Similarly. and we will leave these for future studies. 2002). 2008). this study fill a research gap in the Supply Chain Management literature by providing empirical support for theorised links between sharing of explicit and tacit knowledge and the improvement of supply chain capabilities in the context of China’s transition economy. 2006). When the codification and personalisation processes of explicit and tacit knowledge sharing through Ba match lowcost defenders and differentiated defenders strategies. In line with the knowledge-based view and strategic choice theory. A possible explanation for this finding might be that the relationship between explicit knowledge sharing and cost efficiency is curvilinear. The managers of Chinese manufacturing firms have suggested focusing on the creativity and product innovation by continuously building the knowledge and skill base and substantially investing in research and development to create new value for customers. It suggests that a manager should put more efforts to construct Ba for knowledge sharing and creation. supply chain capabilities can be improved. Sezen 2008). Thus. The results provide partial support to the hypotheses and shed light on the importance of explicit and tacit knowledge sharing. The results show that innovation orientation and tacit knowledge sharing interweave for the improvement of innovation capabilities. Approximately. Furthermore.International Journal of Production Research 3901 5. top management of the firm should invest heavily in building Ba for the organisation so that employees can share tacit knowledge through face-to-face communication to harvest the great value of tacit knowledge. but the lack of adaptive innovation and offering of products to volatile markets results in a low level of customer satisfaction. Downloaded by [Tamilnadu Agricultural Univ] at 04:35 20 August 2013 5. information and knowledge sharing in a collaborative supply chain plays a crucial role in achieving superior performance (e. the findings shed light on achieving a high level of supply chain capability.2 Future research This study was subject to some shortcomings that limited the interpretation of the results. This is consistent with the assertion that applying innovative ideas through collaborative supply chain partners creates a meta-value chain that brings new products to customers as well as adding value to the other supply chain members (Rodriguez et al. In particular. Third. 2008. and the mediating role of cost and innovation orientations on the improvement of supply chain capability. As discussed in prior literature. Discussion and conclusion This study has examined the direct effect of knowledge sharing on the improvement of supply chain capability and the moderating effects of cost and innovation orientations on these relationships. A marginal relationship between cost efficiency and supply chain performance can be explained by the firm’s strategic orientation. low-cost defenders are seldom at the head of chain development practices (Hult et al. A firm with cost orientation usually adopts low-cost defender strategy in doing business with its suppliers. we used cross-sectional data to test the research model and the hypotheses. which achieves a high level of cost efficiency. In particular. building on the knowledge-based view and strategic choice theory. knowledge sharing through codification increases cost efficiency. 80–90% of a firm’s knowledge is tacit knowledge residing in people. the findings suggest that tacit knowledge sharing exerts a significant effect on innovation capability. Knowledge creation in a supply chain through various Ba has also been testified by Wu (2008). originating Ba facilitates the implementation of personalisation through the socialisation process. There exists a curvilinear relationship between cost of knowledge acquisition for a new product domain and financial performance of the new product: moderate levels of cost of knowledge acquisition produce the lowest financial performance. when competition and cooperation coexist. explicit knowledge sharing is negatively associated with cost efficiency. which asserts that personalisation strategy is best employed for tacit knowledge sharing.

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