Intrafirm Knowledge Flows

This research investigates knowledge transfer decisions of managers. In multi-unit firms, transfer of knowledge among business units is essential for leveraging resources available inside the firm. I examine whether managers’ willingness to transfer knowledge from their unit to another unit in the firm depends on whether that knowledge is sourced internally or externally, and, whether status recognition from corporate headquarters moderates this effect. Using an experiment, I find that in the absence of recognition, managers’ willingness to transfer internally sourced knowledge is higher than externally sourced knowledge. Further, I find that the asymmetric effect of knowledge sourcing on managers’ willingness to transfer knowledge reduces when recognition is present than when it is absent. My findings contribute to our understanding of the design of control systems for reducing internal information frictions in multi-unit firms.