Inside a multiunit organization, units can learn from each other and benefit from new knowledge developed by other units. This knowledge transfer among the units provides opportunities for mutual learning and inter-unit cooperation. However, knowledge is sticky and often difficult to spread where a lack of pre-existing relationships among the units prevails. Interaction among organizational units can take many different forms such as informal lunches, corporate picnics and seminars. Once people know each other across units, they keep in touch on a regular basis, exchanging information and knowledge.
Innovative ideas are often at the nexus of inter-unit linkages.
To foster innovation, information and knowledge should be deliberately distributed, recommends Tsai. For his research, Tsai collected data from 24 business units in a petrochemical company and 36 business units in a food-manufacturing company. He developed a questionnaire survey, which measured innovation and performance in units, absorptive capacity, and asked respondents to identify other units that provide them with new knowledge or expertise when they're seeking technical advice outside of the organization. The results of his research indicate that a unit's innovative capability is significantly increased by its centrality in the intra-organizational network providing opportunities for shared learning, knowledge transfer, or information exchange. He believes that both external knowledge access and internal learning capacity are important for a unit's innovation and performance.