Knowledge transfer in intraorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance

Drawing on a network perspective on organizational learning, I argue that organizational units can produce more innovations and enjoy better performance if they occupy central network positions that provide access to new knowledge developed by other units. This effect, however, depends on units' absorptive capacity, or ability to successfully replicate new knowledge. Data from 24 business units in a petrochemical company and 36 business units in a food-manufacturing company show that the interaction between absorptive capacity and network position has significant, positive effects on business unit innovation and performance.