Baltic Journal of Management

Gone fishing for knowledge?: The effect of strategic orientations on the scope of open
knowledge search
Paavo Ritala Kaisa Henttonen Hanna Salojrvi Liisa-Maija Sainio Sami Saarenketo
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BJM
8,3
328
Received 3 April 2012
Revised 19 December 2012
19 February 2013
Accepted 23 February 2013
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Baltic Journal of Management
Vol. 8 No. 3, 2013
pp. 328-348
q Emerald Group Publishing Limited
1746-5265
DOI 10.1108/BJOM-Apr-2012-0019
The current issue and full text archive of this journal is available at
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Gone fishing for knowledge?
The effect of strategic orientations on the
scope of open knowledge search
Paavo Ritala, Kaisa Henttonen, Hanna Salojarvi,
Liisa-Maija Sainio and Sami Saarenketo
School of Business, Lappeenranta University of Technology,
Lappeenranta, Finland
Abstract
Purpose Firms need to reach out for external knowledge in order to keep up with the pace of the
markets and to renew themselves. Although research on open innovation and open knowledge search
strategies is continuously accumulating, there are as yet only few studies examining the antecedents of
the decision to use various external knowledge sources for R&D and innovation. The purpose of this
paper is to narrow this gap by examining the effects of firms strategic orientations on the scope of
their open knowledge search.
Design/methodology/approach This study builds on a cross-industrial survey of Finnish firms in
exploring the effects of three types of strategic orientations (customer relationship orientation,
entrepreneurial orientation, and technology orientation) on the use of open knowledge search strategies.
Findings The results show that the customer relationship orientation is associated with the
tendency of a firm to use a market-driven knowledge search strategy. The technology orientation, on
the other hand, is associated with science and generic knowledge-driven strategies, whereas the
entrepreneurial orientation is associated with the utilization of all the search strategies identified in
the study.
Practical implications The value of various sources of external knowledge depends on the firms
strategic goals and the nature of the industry. Practising managers utilizing the results of this study
should be better able to align their organizations in the desired direction in terms of open knowledge
search.
Originality/value The results provide new evidence on firm-specific heterogeneity in the use of
external knowledge sources.
Keywords Knowledge, Open knowledge search, Open innovation, Strategic orientations, Exploration,
Antecedents, Knowledge management, Innovation
Paper type Research paper
1. Introduction
Organizations across various industries are increasingly using external knowledge
sources in order to enhance their innovation performance and generate
competitive advantages, as well as to improve their operational efficiency (Cohen and
Levinthal, 1990; Hoskisson et al., 1999; Chen et al., 2012). The crucial role of external
knowledge sources is evident already in earlier literature focusing on the resources and
capabilities of firms (Wernerfelt, 1984; Barney, 1991) as well as the knowledge-based
view of the firm (Kogut and Zander, 1992; Grant, 1996). Building on these approaches,
more recent perspectives on relational resources and capabilities (Dyer and Singh, 1998;
Das and Teng, 2000; Lavie, 2006) pinpoint even more clearly the relevance of external
knowledge sources on the firms competitiveness and innovativeness.
 Previous research has also shown that the acquisition and utilization of external Gone fishing for
knowledge at various levels of the innovation process can improve the firms performance in knowledge?
several ways (Tether, 2002; Katila and Ahuja, 2002; Laursen and Salter, 2006; Sofka and
Grimpe, 2010; Leiponen and Helfat, 2010; Chiang and Hung, 2010). This process of finding
potential external knowledge in the firms environment has been more specifically referred
to as its open knowledge search strategy (Laursen and Salter, 2006; Sofka and Grimpe, 2010),
which is used as the key concept throughout this study. In particular, external sources of 329
potentially relevant information such as customers, suppliers, competitors, and universities
have been considered as the main components of such strategies.
Regardless of the proven importance of open knowledge search strategies on
innovative performance outcomes, very little is known about the factors that determine
the use and scope of these strategies. Therefore, more studies are needed to uncover the
antecedents of open knowledge search strategies. Previous literature indicates that the
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strategic orientation of the firm has a significant role in guiding the firms actions
towards the external market environment and technology (Day, 1994; Gatignon and
Xuereb, 1997, Zhou et al., 2005). Strategic orientations can be defined as culture-based,
firm-specific and complex capabilities that reflect the firms philosophy of how to
conduct business (Zhou et al., 2005) and interact with the external environment (Day,
1994; Gatignon and Xuereb, 1997). This paper assumes that, as an outward looking
philosophy, strategic orientations are very likely to reflect the firms behavior in its
knowledge search given the fundamental link between the search and use of knowledge
and the contemporary firms very existence (Grant, 1996; Kogut and Zander, 1992; von
Krogh et al., 2001; Martn-de Castro et al., 2011). Although there is some evidence
supporting the linkage between strategic orientations and information-processing
behaviors ( Jayachandran et al., 2005; Sinkula, 1994; Slater and Narver, 1995; Zhang and
Duan, 2010), these studies mainly focus on the behaviors of the focal firm without
considering the type of external knowledge sources it uses. Thus, given the crucial role
of external knowledge, this paper seeks to identify the strategic orientations that
determine the use of certain open knowledge search strategies in large R&D-intensive
firms. More specifically, the effect of three firm-specific strategic orientations on the
exploitation of open knowledge search strategies is taken into examination: customer
relationship orientation, entrepreneurial orientation (EO), and technology orientation.
Due to the emergent phase of the enquiry into the phenomenon, an exploratory approach
is adopted, and no explicit hypotheses will be formulated.
Cross-industrial survey data was collected from 193 large R&D-intensive Finnish
firms. By utilizing the insights of the existing literature on knowledge search strategies
(Laursen and Salter, 2006; Sofka and Grimpe, 2010), as well as the empirical analysis,
four specific open knowledge search strategies were identified, namely:
(1) market-driven;
(2) science-driven;
(3) intermediary-driven; and
(4) generic knowledge-driven.

Second, the effects of the strategic orientations on the four identified strategies were
tested. The results suggest that the customer relationship orientation is associated
with the firms tendency to exploit a market-driven knowledge search strategy.
 BJM The technology orientation, on the other hand, appears to be associated with the
8,3 exploitation of science and generic knowledge-driven search strategies, and the EO with
all four strategies. These results provide new information on the types of firms that are
prone to seeking certain types of external knowledge sources. Therefore, this study
contributes to the on-going, yet thus far rather thin discussion about the antecedents of
open knowledge search strategies.
330
2. Knowledge sources and open knowledge search strategies
Previous literature has identified a variety of potential sources of knowledge in the firms
environment and each type of source provides different types of knowledge. More
specifically, it is relevant to analyze where the external knowledge comes from, since it is
likely to have an effect on the substance and the value of that knowledge. Even though
different sources may provide knowledge from a certain context (e.g. technology), the
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approach to that knowledge is likely to vary. For instance, technological knowledge

acquired from customers is likely to be more readily applicable to the market context of
the firm than technological knowledge acquired from science-based university research.
In the following, the existing literature on specific external knowledge sources and their
usability in innovation activities will be briefly reviewed.
Collaborating with competitors can improve the firms knowledge base because
competitors are likely to have similar needs related to innovation activities (Tether, 2002),
and thus the knowledge base developed by the firm may also be quite relevant to its
competitors. However, R&D partners that are market competitors may not always want to
share their knowledge. Sometimes firms will rather try to capture some of their partners
knowledge while simultaneously limiting knowledge spillover outside the firm (Hamel,
1991; Oxley and Sampson, 2004). Furthermore, knowledge from a competitor may not be
as novel as knowledge from other sources in that it is likely to have been built on somewhat
similar competitive and market logic (Ritala and Hurmelinna-Laukkanen, 2009; Gnyawali
and Park, 2009). Therefore, knowledge from competitors does not always facilitate actual
competitive differentiation (Sofka and Grimpe, 2010), but rather affords opportunities to
deepen the current knowledge base and pursue incremental development paths.
Universities and research centers may be able to meet the need for basic knowledge or
generic information, although this type of knowledge may be far from the application
stage and fairly large investments are typically needed in order to develop it into final
products (Tether, 2002). On the other hand, knowledge created in universities and
academic research institutions may provide important business opportunities because
of the high degree of novelty (Cohen et al., 2002). Accessing university knowledge may
however be difficult. For example, researchers in public laboratories may not have the
same incentives as engineers in private companies, and they may pay more attention to
scientific value than to market value (Dasgupta and David, 1994). Additionally,
university knowledge may be more accessible for larger than smaller companies.
Customers have also been considered a potential and important source of knowledge.
As the recipients of products and services, they should know what they need or want.
Thus, customer information could be valuable in smaller-scale product improvements,
or even in the development of new products (Joshi and Sharma, 2004; Tether, 2002).
Moreover, information from customers could be highly valuable in identifying new
value creation opportunities. Customers hold a lot of useful knowledge about markets,
the competitive environment, technological developments, and end-user needs and
 preferences (Garca-Murillo and Annabi, 2002). There are risks involved in using Gone fishing for
customer knowledge, however, as it may be myopic, or narrow, and is frequently wrong knowledge?
(Frosch, 1996), tacit or unarticulated (Von Zedtwitz and Gassmann, 2002).
Furthermore, suppliers have been identified as a knowledge source in the search for
innovative ideas and critical technologies (Bonaccorsi and Lipparin, 1994; Hakansson,
1987). Suppliers deliver knowledge and technology as inputs into the production process;
thus they may, for example, be able to improve it so as to bring about cost reductions 331
(Belderbos et al., 2004). However, supplier knowledge may also become easily available to
key competitors, which would decrease its economic value (Sofka and Grimpe, 2010). In
addition to strictly supplier-related knowledge, firms can access a large amount of
valuable knowledge through their partners and alliance networks, which is relevant to the
competitiveness of the firm in the markets it operates (Powell et al., 1996; Spencer, 2003).
In addition to the aforementioned categories, which are commonly addressed in the
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existing literature, this paper suggests that valuable knowledge could also be gained at
conferences and trade fairs, through patents, standards organizations, scientific
journals, professional publications and professional associations, and from standards
created by consortiums, in other words the so-called de facto standards. However, it
should be remembered that it is easy for competitors to gain access to these types of
knowledge due to their public or other availability.
All in all and in line with Sofka and Grimpe (2010), it is suggested that innovation and
R&D managers are likely to specialize their knowledge search so that they can access the
breadth of knowledge sources efficiently. This could indicate that open knowledge search
strategies reflect management choices concerning the sources they wish to access (Stock
and Tatikonda, 2004; Gottfredson et al., 2005). The results of this study related to open
knowledge search strategies are expected to be in line with the findings from previous
research (Sofka and Grimpe, 2010), at least when it comes to distinguishing between
market-related and technological knowledge. Thus, it is posited here that market-related
knowledge will likely come from customers, competitors, and alliances, and that
technological knowledge, on the other hand, will most likely emerge from universities,
research centers, and consultants.

3. Firm orientations as antecedents of open knowledge search strategies

The paper follows prior research in stating that some external knowledge sources seem to
be more commonly explored and exploited than others. For example, Segelod and Jordan
(2004) found in their study on software development projects that market-oriented
knowledge search was more common than the exploitation of research-oriented knowledge
sources, such as universities, patent offices, and technical consultants. Laursen and Salter
(2004) reported similar findings, namely that only a limited number of firms drew directly
from universities as a source of information or knowledge for their innovative activities.
However, the antecedents that affect the choice of external knowledge sources and search
have thus far not been exhaustively studied (for an exception, see Kang and Kang, 2009).
In general, firms pursue open knowledge search in the hope of creating innovations
and improvements in their products, services, and processes (Leiponen and Helfat, 2010;
Tether, 2002). In determining the firm-specific antecedents of these search strategies,
this paper follows Abernathy and Clark (1985) in assuming that innovation initiatives
within the firm are directed either towards the markets or technologies. The firms
markets comprise the field in which it operates, in other words, the end customers for the
 BJM products and the competitors offering substitutive products to those customers. The
8,3 technologies consist of the firms productive resources or systems of production and
are the fundamental sources of value creation through innovation in pursuit of new or
improved solutions. According to the previous literature on strategic orientations, the
technology and customer perspectives are typically chosen for further investigation
(Hortinha et al., 2011; Zhou and Li, 2010, Solberg and Olson, 2010; Spanjol et al., 2011;
332 Slater et al., 2007). In addition to the aforementioned two orientations, EO has emerged as
a relevant stream of orientation research, comprising innovativeness, proactiveness, and
risk taking (Covin and Slevin, 1989; Wiklund, 1999).
Given the aforementioned facets of innovation opportunities, we are especially
interested in how firm-specific business logic, i.e. the firms strategic orientations,
determines its behavior in terms of markets and technologies. The focus therefore is on
three strategic orientations and how they affect the firms choice of open knowledge search
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strategies. The fact that these orientations are treated as distinct facilitates the closer
investigation of the potentially differing strategies. There is a certain trade-off between the
technology and the market perspective: both should be simultaneously pursued, but
resources are limited and firms often have to choose one or the other (Hortinha et al., 2011).
On the other hand, although the importance of the technology and EOs is acknowledged in
existing research, only few studies have been conducted in the innovation context
(Zhou et al., 2005; Renko et al., 2009). Firms are nevertheless expected to seek various
combinations of these strategic orientations in order to stay competitive. Here, the three
types of strategic orientations are used to explain the firms open knowledge search
strategies, which are further scrutinized and defined through explorative empirical
analysis later on.

3.1 Customer relationship orientation

A customer relationship-oriented organizational culture consists of norms, values, and
deep basic assumptions that accentuate the importance and priority of long-term customer
relationships (Day, 2003; Deshpande et al., 1993). The conceptual background lies in the
relationship marketing paradigm, according to which long-term customer relationships
lead to a higher level of mutual value creation between the buyer and the seller (Morgan
and Hunt, 1994; Parvatiyar and Sheth, 2001). In addition, customers in customer
relationship-oriented organizations are regarded as strategic assets alongside the firms
other intangible assets. This means that high priority is given to customer retention,
treating customers in a differentiated manner, and maximizing the lifetime value of the
customer base (Day, 2000).
The customer relationship orientation is closely related to customer orientation which
is one of the main dimensions of the market orientation construct as defined by Narver and
Slater (1990). However, while the market orientation has received criticism for treating
customers as aggregate and faceless markets (Campbell, 2003; Helfert et al., 2002),
the customer relationship orientation goes deeper in its attempt to understand individual
customers and develop mutual, long-term relationships with the chosen few. By getting
close to their selected customers, customer relationship-oriented firms aim not only to
understand, but also to learn from the customer: the development and enhancement of
customer relationships require a profound understanding of customer preferences, the
customers business and the markets in which they operate (Salojarvi et al., 2010). For
example, Jayachandran et al. (2005) report a positive effect of the customer-relationship
 orientation on relational information processes comprising information reciprocity Gone fishing for
between the firm and the customer, information capture, and information integration, knowledge?
access, and use. Given the above reasoning, it is suggested that the customer relationship
orientation is likely to increase the exploitation of market-related knowledge sources, such
as customers, competitors, and alliance partners.

3.2 Technology orientation 333

A strong technology orientation is often the basic characteristic of technology-based
innovative organizations. Gatignon and Xuereb (1997, p. 78) define a technology-oriented
firm as a firm with the ability and will to acquire a substantial technological background
and use it in the development of new products. Technology orientation reflects a certain
technology push philosophy inside the firm, which often results in a heavy emphasis on
R&D and the prioritizing of openness to and the use of state-of-the-art technologies in new
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innovations (Zhou et al., 2005; Hortinha et al., 2011). These firms concentrate on acquiring
new technological expertise and using existing knowledge to build new solutions
(Spanjol et al., 2011). The technology orientation also encompasses behaviors such as the
rapid integration of new technologies and the proactive generation of new product ideas
(Slater et al., 2007). Chandy and Tellis (2000) found in particular that incumbent firms with
a strong technological capability are particularly likely to become aware of scientific
breakthroughs and are thus able to pursue avenues leading to radical innovations. This
may also imply a tendency to emphasize science-driven external knowledge sources.
A firm guided by a technology orientation will accumulate vast technological knowledge
storages through past experience and processes (Zhou and Li, 2010), which it may use to its
advantage. Spanjol et al. (2011) argue that, because of limited resources,
technology-oriented firms may give priority to technological capabilities, thus devoting
fewer resources to market search behavior.

3.3 Entrepreneurial orientation

Miller and Friesen (1982) were the first ones to suggest the concept of an EO. Miller (1983,
p. 771) sums up the qualities of an entrepreneurially-oriented firm as [. . .] one that
engages in product market innovation, undertakes somewhat risky ventures, and is first
to come up with proactive innovations, beating competitors to the punch. Accordingly,
scholars acknowledge that EO refers to the firms strategic orientation that generally
comprises the dimensions of innovativeness, proactiveness, and risk taking (Covin and
Slevin, 1989; Wiklund, 1999). Innovativeness refers to the propensity to engage in
experimentation, support new ideas, and depart from established practices (Lumpkin
and Dess, 1996). Proactiveness reflects the propensity to anticipate future needs and
changes in the operating environment and to pioneer new methods and techniques
(Lee et al., 2001), whereas the risk-taking tendency refers to the willingness to make
investments in projects that have uncertain outcomes or unusually high potential profits
or losses (Lumpkin and Dess, 1996).
Many scholars have found that businesses with high EO perform better (Wiklund,
1999; Zahra and Covin, 1995). Prior studies have investigated the relationship between
EO and firm-level performance in terms of innovation (Wiklund and Shepherd, 2003),
intra and extra-industry networks (Stam and Elfring, 2008), international performance
(Jantunen et al., 2005), and financial performance, among others. Although the empirical
results are somewhat inconsistent, it seems that firm-level performance variables are
 BJM frequently used as outcome variables in EO research. This research adds to this body of
8,3 literature (and to strategic orientation literature in general) in that knowledge sources
and open knowledge search strategies are adopted as the outcome variables. It argues
that the examination of EO and its association with a variety of potential sources of
knowledge and with the open knowledge search strategies that companies follow may
bring significant new knowledge and contribute to the literature by building a more
334 comprehensive view of the role of EO. Atuahene-Gima and Ko (2001) see some
similarities in the technological orientation and EO as they both increase the firms
ability and will to acquire new technical knowledge. Renko et al. (2009) also argue that
entrepreneurial firms generate, disseminate, and respond to technological knowledge.

4. Methods
4.1 Data collection
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The survey data was collected from Finnish firms during 2008-2009 by means of a
structured web-based questionnaire. The key-informant technique was used in collecting
the data. The Amadeus database was used for drawing the initial cross-industry sample
consisting of 762 Finnish companies with more than 100 employees engaged in R&D
activities. A total of 570 informants of the initial pool were reached by phone after several
contact attempts, and they were asked whether they would be willing to receive the
questionnaire. Of these informants, 455 agreed to take part in the study, and 115 refused to
participate. The respondents were mainly R&D managers, development officers, and chief
executive officers, thus indicating their seniority and knowledgeable position with regard
to R&D and innovation activities. A total of 213 responses were received, thus giving an
effective response rate of 37.4 percent (213/570). A total of 20 responses were discarded due
to excessive amounts of missing or otherwise faulty data. The final sample size was
therefore 193 responses. These responses had sufficiently small amounts of missing
values, and they were inputted in accordance with the estimation maximum (EM)
procedure, thereby ensuring the applicability and completeness of the data for statistical
testing (Dempster et al., 1977).
The multivariate analysis of variance or MANOVA test was used to assess the
possibility of non-response bias in accordance with the recommendations of
Armstrong and Overton (1977). The various respondent groups were compared on a
number of different variables. No significant differences among them were found.
Given the use of single informants in collecting the data, Harmans one-factor test
was performed in order to check for possible common method bias (Podsakoff and
Organ, 1986). Hence, all the independent and dependent variables were included
simultaneously in the factor analysis. However, no single factor emerged, as the first
factor accounted only for 26.2 percent of the total variance, and all the items retained in
the factor analyses accounted for 52.5 percent. Thus, common method bias was not
expected to distort the results of the study.

4.2 Measures
Capturing knowledge spillovers is not an easy task in that they do not leave a trail on
paper, and many previous studies have used patent statistics and citations (Galunic
and Rodan, 1998; Rosenkopf and Nerkar, 2001). However, this approach has attracted
criticism, as not all inventions are patentable and only a limited number of
firms use patenting strategies in the first place (Sofka and Grimpe, 2010). Thus, in this
 paper the measurement of open knowledge search was approached in a more diverse Gone fishing for
way, as described in the following. knowledge?
The strategies were identified by asking the survey respondents to evaluate the
importance of the main information sources of their innovation activities on a seven-point
Likert scale (1 not applicable, 2 not important, 7 very important). A total
of 12 different sources were used: customers, competitors, alliance partners, consulting
agencies, commercial laboratories and private research institutes, universities and 335
polytechnics, public and private non-profit research institutes, standardization
organizations, conferences, trade fairs and exhibitions, patents, scientific journals and
professional publications, professional associations, and standards created by
consortiums, in other words the so-called de facto standards. These 12 knowledge
sources were partially based on earlier studies on open knowledge search (Laursen and
Salter, 2006; Sofka and Grimpe, 2010). Earlier studies were supplemented by also involving
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knowledge from standardization organizations and de facto standards as these have been
suggested to be valuable knowledge sources for technology-intensive companies
(Blind et al., 2010).
Among the 12 knowledge sources, a principal-component factor analysis (with
Varimax rotation) was used to identify the open knowledge search strategies. The
Kaiser-Meyer-Olkin measure of sampling adequacy had a satisfactory value of 0.82. The
analysis revealed four research strategies with an eigenvalue greater than one. Table I
shows the rotated factor loadings of the knowledge sources. For better readability,
loadings smaller than 0.4 were excluded from the table. Calculations were also made to
identify the reliability coefficients (Cronbachs a) for the main variables in order to
assess the reliability of the scales. The corresponding values were 0.60 (market-driven),
0.825 (science-driven), 0.617 (intermediary-driven), and 0.6 (generic knowledge-driven).

Factor 1 Factor 2 Factor 3

market- science- intermediary- Factor 4 generic
Knowledge source driven driven driven knowledge-driven

Customers 0.759
Competitors 0.640
Alliance partners 0.711
Consulting agencies,
commercial laboratories and
private research institutes 0.752
Universities and polytechnics 0.812
Public and private non-profit
research institutes 0.817
Conferences, trade fairs and
exhibitions 0.532
Patents 0.793
Scientific journals and
professional publications 0.656
Standardization organizations 0.471
Professional associations 0.664 Table I.
De facto standards 0.760 Rotated factor loadings
external knowledge
Note: Factor loadings smaller than 0.4 are not displayed sources
 BJM Not all of these values can be considered particularly good, but they are at least
8,3 satisfactory for newly developed scales (Nunnally, 1978).
In naming the four factors, earlier research on open knowledge search (Sofka and
Grimpe, 2010) was utilized, where such knowledge sources were divided into three
categories of market-driven, science-driven, and supplier-driven sources. However, since
a more comprehensive set of measures was utilized than in the earlier studies,
336 the outcome was a total of four factors, which meant that additional descriptive names
had to be given to the new categories emerging from the factor analysis. First, the
market-driven search strategy includes customers, competitors, and alliance
partners, reflecting the operating environment of the firm. Second, the science-driven
strategy incorporates consulting agencies, commercial laboratories and private research
institutes, universities and polytechnics, and public and private non-profit
research institutes. This factor reflects the basic and applied research types of
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knowledge. Third, the intermediary-driven strategy encompasses conferences, trade

fairs and exhibitions, patents, and scientific journals and professional publications.
Finally, the generic knowledge-driven search strategy focuses on professional
associations, standardization organizations, and de facto standards.
The independent variables, namely the three strategic orientations (customer
relationship orientation, technology orientation, and EO) were measured in turn on a
seven-point Likert scale (1 totally disagree, 7 totally agree). The customer
relationship orientation was measured on four items adapted from Jayachandran et al.
(2005), the technology orientation on three items adapted from Zhou et al. (2005), and
the EO on nine items adapted from Lumpkin and Dess (1996). The Kaiser-Meyer-Olkin
measure of sampling adequacy gave a satisfactory value of 0.78. The Cronbachs a
values for all the three strategic orientation measures were satisfactory: 0.85 (customer
relationship orientation), 0.88 (EO), and 0.81 (technology orientation). Table II gives the
rotated factor loadings for the three types of strategic orientations.

4.3 Control variables

Various factors may have an effect on the firms use of external knowledge sources.
For example, external knowledge sourcing may be more intense in small firms than in
large firms which have more resources for in-house R&D (Rothwell and Dogson, 1991).
Therefore, the effect of the firm size was first controlled for in the analysis and was
measured in terms of the number of employees by using a logarithmic conversion in
order to normalize the variable. R&D intensity (R&D investment as a percentage of the
turnover) was also controlled for from the year 2005 in order to take into account the
effect of relative R&D investments on the cumulative usage of open knowledge search
strategies intended to produce innovation outcomes. The variable involved a few
missing values, which were mean-replaced before the analyses. Logarithmic conversion
was used in order to normalize this variable as well. Finally, the effect of the industry
was controlled for, given the evidence from previous studies that the use of external
knowledge sources depends on the industry (Hagedoorn, 2002; Katila and Ahuja, 2002).
For this purpose, six industry controls were used accounting for the different levels of
innovation propensity across the industries: manufacturing (a benchmark dummy),
machinery and vehicles, ICT and electronics, wholesale retail logistics, construction, and
infrastructure and services. The industry controls were constructed in accordance with
the official NACE industry definitions.
 Gone fishing for
Factor 1.
Customer Factor 2. Factor 3. knowledge?
relationship Entrepreneurial Technology
Items orientation orientation orientation

In our organization, retaining customers is

considered to be a top priority 0.844 337
Our employees are encouraged to focus on
customer relationships 0.834
In our organization, customer relationships are
considered to be a valuable asset 0.762
Our senior management emphasizes the
importance of customer relationships 0.827
We use sophisticated technologies in our new
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product development 0.851

Our new products always use state-of-the-art
technology 0.858
Technological innovation based on research
results is readily accepted in our organization 0.685
In dealing with its competitors, our firm typically
initiates actions which competitors respond to 0.686
In dealing with its competitors, our firm is very
often the first business to introduce new products/
services, administrative techniques, operating
technologies, etc. 0.691
In general, the top managers of our firm have a
strong tendency to be ahead of others in
introducing novel ideas or products 0.719
In general, the top managers of our firm favor a
strong emphasis on R&D, technological
leadership and innovations 0.595
In the past five years, our firm has marketed very
many new lines of products/services 0.717
Changes in product or service lines have usually
been quite dramatic 0.724
Our firm has a strong proclivity for high risk
projects, if there is a chance of very high returns 0.666
Owing to the nature of the environment, bold,
wide-ranging acts are necessary to achieve the
firms objectives 0.680
When confronted with decisions involving
uncertainty, our firm typically adopts a bold
stance in order to maximize the probability of
exploiting opportunities 0.631 Table II.
Rotated factor loadings
Note: Factor loadings smaller than 0.40 are not displayed strategic orientations

5. Results
Hierarchical regression analysis was used to test the relationships between the
independent and dependent variables. In order to see whether the regression method
could be used to run the analysis, the assumptions concerning normal distribution and
multicollinearity were first checked. The former were met, with the statistical z-values
of skewness and kurtosis being within acceptable levels (Hair et al., 2006). In addition,
 BJM the variance inflation (VIF) values were well below the suggested cut-off value
8,3 (Hair et al., 2006), thus indicating that there was no problem of multicollinearity among
the variables. Table III gives the mean, standard deviation, and bivariate correlations
among the variables.
The results of the hierarchical regression analyses are shown in Tables IV-VII. Four
different analyses were run in order to explore the effects of the strategic orientations
338 on the use of open knowledge search strategies. In addition, in order to make the results
more straightforward to interpret, each orientation was inserted within its own

Variable Mean SD 1 2 3 4 5 6 7 8

1. Customer-
relationship
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orientation 5.73 0.85

2. Technology
orientation 4.56 1.38 0.17 *
3. Entrepreneurial
orientation 4.47 1.07 0.28 * 0.51 * *
4. Market-driven
search strategy 4.87 0.99 0.24 * * 0.07 0.21 * *
5. Science-driven
search strategy 3.65 1.48 0.16 * 0.24 * 0.19 * * 0.26 * *
6. Generic
knowledge-driven
search strategy 3.78 1.23 0.12 0.31 * * 0.39 * * 0.31 * * 0.51 * *
7. Intermediary-
driven search
strategy 3.54 1.04 0.16 * 0.05 0.16 * 0.29 * * 0.51 * * 0.43 * *
Table III. 8. Firm size 1,001.59 3,354.63 0.05 20.03 0.02 0.13 0.29 * * 0.19 * * 0.22 * *
Means, standard 9. R&D intensity 3.93 11.11 0.02 0.22 * 0.06 0.05 0.05 0.21 * * 0.01 0.01
deviations, and
Pearson correlations Note: Significant at: *p , 0.05 and * *p , 0.01

Variable Model 1 Model 2 Model 3 Model 4

Firm size 0.13 * 0.12 * 0.13 * 0.13 *

R&D intensity 0.02 0.01 0.02 0.02
Machinery and vehicles (dummy) 2 0.01 0.01 2 0.01 2 0.01
ICT and electronics (dummy) 2 0.01 2 0.00 2 0.01 2 0.01
Wholesale retail logistics (dummy) 2 0.08 2 0.09 2 0.07 2 0.08
Construction and infrastructure (dummy) 2 0.04 2 0.04 2 0.04 2 0.04
Services (dummy) 2 0.01 2 0.00 0.00 2 0.01
Customer relationship orientation 0.22 * * *
Technology orientation 0.05
Entrepreneurial orientation 0.20 * * *
Table IV. R2 0.03 0.08 0.03 0.07
Regression results Change in F 9.67 * * * 0.00 7.86 * * *
(market-driven F 0.67 1.83 * 0.63 1.59
knowledge search
strategy) Note: Correlation is significant at: *0.10, * *0.05, and * * *0.01 levels (two-tailed)
 Gone fishing for
Variable Model 1 Model 2 Model 3 Model 4
knowledge?
Firm size 0.29 * * * 0.28 * * * 0.29 * * * 0.28 * * *
R&D intensity 0.06 0.05 0.02 0.05
Machinery and vehicles (dummy) 20.04 2 0.03 2 0.04 2 0.05
ICT and electronics (dummy) 20.10 2 0.10 2 0.11 2 0.12
Wholesale retail logistics (dummy) 20.17 * * 2 0.17 * * 2 0.13 * 2 0.18 * * 339
Construction and infrastructure (dummy) 0.09 0.09 0.09 0.10
Services (dummy) 20.22 * * * 2 0.21 * * * 2 0.18 * * 2 0.22 * * *
Customer relationship orientation 0.13 *
Technology orientation 0.19 * * *
Entrepreneurial orientation 0.19 * * *
R2 0.16 0.18 0.19 0.19 Table V.
Change in F 3.69 * 7.26 * * * 7.70 * * * Regression results
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F 4.91 * * * 4.82 * * * 5.35 * * * 5.42 * * * (science-driven

knowledge search
Note: Correlation is significant at: *0.10, * *0.05, and * * *0.01 levels (two-tailed) strategy)

Variable Model 1 Model 2 Model 3 Model 4

Firm size 0.19 * * * 0.18 * * * 0.19 * * * 0.18 * * *

R&D intensity 0.17 * * 0.17 * * 0.13 * 0.15 *
Machinery and vehicles (dummy) 20.08 2 0.08 2 0.09 2 0.11
ICT and electronics (dummy) 20.11 2 0.11 2 0.11 2 0.13 *
Wholesale retail logistics (dummy) 20.25 * * * 2 0.26 * * * 2 0.20 * * * 2 0.28 * * *
Construction and infrastructure (dummy) 20.08 2 0.08 2 0.08 2 0.06
Services (dummy) 20.19 * * 2 0.18 * * 2 0.14 * 2 0.18 * * *
Customer relationship orientation 0.10
Technology orientation 0.24 * * *
Entrepreneurial orientation 0.39 * * *
R2 0.14 0.15 0.19 0.29 Table VI.
Change in F 1.99 10.71 * * * 38.66 * * * Regression results
F 4.12 * * * 3.87 * * * 5.14 * * * 9.19 * * * (generic
knowledge-driven
Note: Correlation is significant at: *0.10, * *0.05, and * * *0.01 levels (two-tailed) search strategy)

regression model, given to the relatively high correlation between them (while making
the interpretation easier, this should also be acknowledged as a limitation to the
construct validity of the measures). The variables were entered in four steps so that
the control variables firm size, R&D intensity, and industry dummies were entered in
the first step (Model 1), and the main effects of the strategic orientations were entered
separately in the following three steps (Models 2-4).
The results show, first, the importance of the firm size in explaining the intensity and
scope of the open knowledge search strategies used. The firm size had a statistically
significant effect on all the four search strategies examined in the study. Thus, the larger
the firm, the more intense was the exploitation of market-driven, science-driven, generic
knowledge-driven and intermediary-driven strategies (which is in line with Laursen and
Salter, 2004). Of the main effects, the results confirm the influence of the customer
relationship and EOs on the extent of the exploitation of a market-driven search
 BJM
Variable Model 1 Model 2 Model 3 Model 4
8,3
Firm size 0.21 * * * 0.20 * * * 0.21 * * * 0.21 * * *
R&D intensity 0.05 0.04 0.04 0.04
Machinery and vehicles (dummy) 2 0.12 2 0.12 2 0.13 2 0.14 *
ICT and electronics (dummy) 2 0.11 2 0.11 2 0.11 2 0.12
340 Wholesale retail logistics (dummy) 2 0.03 2 0.03 2 0.01 2 0.04
Construction and infrastructure (dummy) 0.02 0.02 0.02 0.02
Services (dummy) 2 0.11 2 0.10 2 0.10 2 0.11
Customer relationship orientation 0.13 *
Technology orientation 0.06
Entrepreneurial orientation 0.16 * *
R2 0.07 0.09 0.07 0.10
Table VII. Change in F 3.34 * 0.64 5.25 * *
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Regression results F 1.91 * 2.11 * * 1.75 * 2.37 * *

(intermediary-driven
search strategy) Note: Correlation is significant at: *0.10, * *0.05, and * * *0.01 levels (two-tailed)

strategy ( p , 0.01). The second regression shows that the technology orientation and
the EO have statistically significant effects on the exploitation of a science-driven
strategy ( p , 0.01; p , 0.01). Similarly, the third regression also shows that the
technological and EOs also have a strong, statistically significant effect on the
exploitation of a generic knowledge-driven search strategy ( p , 0.01; p , 0.01,
respectively). Finally, the results suggest that the EO affects the tendency to exploit an
intermediary-driven strategy ( p , 0.05). It is notable that the customer relationship
orientation also had effects with p , 0.10 on several knowledge sources other than
market-driven ones, but these results should be assessed with caution due to the low
significance level.

6. Discussion and implications

This study explored the antecedents of open knowledge search strategies in firms.
In particular, the role of the firms strategic orientations (customer relationship orientation,
EO, and technology orientation) was approached as the determinant of its behavior in
searching for firm-external knowledge. Four specific strategies were identified in the
empirical examination of open knowledge search, namely market-driven, science-driven,
intermediary-driven, and generic knowledge-driven. Cross-sectional multi-industry
survey data on Finnish firms was used in the regression analysis in order to assess the
effect of these strategic orientations on each of the strategies. Table VIII summarizes the
results in terms of showing the orientations that have a positive effect on certain search
strategies.
Prior research has focused on demonstrating that the firm needs to utilize multiple open
knowledge search strategies if it wants to innovate effectively (Laursen and Salter, 2006;
Sofka and Grimpe, 2010; Leiponen and Helfat, 2010; Chiang and Hung, 2010;
Henttonen et al., 2011). The approach adopted here represents a significant departure
from the traditional practice of regressing search strategies to performance in order to
assess how a deviation in their use might drive organizational or innovation performance.
Instead, different strategic orientations were chosen to be investigated as antecedents.
Such orientations are very likely to reflect firm behavior in knowledge search, since the
 search for and use of knowledge are fundamentally linked with the business strategy and Gone fishing for
the existence of the contemporary firm (Grant, 1996; Kogut and Zander, 1992; knowledge?
von Krogh et al., 2001). However, the existing literature has yet fallen short on addressing
these issues, and thus this paper can provide valuable insights.
This study makes two key contributions. First, the results show that different
strategic orientations affect the extent to which firms use different external knowledge
sources. The analysis revealed that both the customer relationship orientation and the 341
technology orientation led to a focus on more specific open knowledge search strategies,
whereas the EO led to the utilization of a broader scope of strategies (i.e. high breadth of
knowledge search using the conceptualization of Laursen and Salter (2006)). Thus, it
seems that firms that are proactive in their strategic behavior (i.e. entrepreneurially
oriented) tend to employ broad knowledge search strategies, whereas those focusing on
customers or technology narrow down their search. This is in line with the literature
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suggesting that proactive, path-creating firms are especially prone to seeking external
knowledge quite widely (Kask, 2011; Pandza and Thorpe, 2009; Spanjol et al., 2011).
It also supports the knowledge-based literature suggesting that the value of
complementary knowledge comes from different specialized sources (Kogut and
Zander, 1992; Grant, 1996). Therefore, if the firm wants to tap into multiple external
knowledge sources, the EO is shown to be the most relevant strategic option. In other
situations, the firm might want to be more focused towards certain knowledge sources,
and then the approach towards customer relationship or technology orientation could be
more suitable. These issues also link to the larger discussion on why certain types of
firms exist. As firms are often highly path dependent in their evolution (Nelson and
Winter, 1982), it is likely that they are going to continue towards their chosen paths in
terms of orientation and knowledge search. Thus, there are certain challenges and risks
for those firms focusing too heavily on a certain direction, since it may limit their abilities
to change and innovate. Thus, as the results show, the EO and firm culture can be helpful
to overcome such limitations (Miller, 1983; Teece et al., 1997).
Second, the analysis also produced some industry-specific results. Manufacturing
businesses seemed to dominate in their usage of all types of external knowledge
sources in relation to almost all other industries (it was used as a benchmark dummy),
and only the construction and infrastructure industries searched more widely from
intermediary and science-driven sources. This may be due to the fact that modern
manufacturing firms require more different kinds of knowledge in their operations.
In fact, it has been shown that manufacturing firms utilize diverse types of knowledge
in their innovation and R&D activities (Amara and Landry, 2005; Laursen and
Salter, 2006).

Generic knowledge- Intermediary-

Market-driven Science-driven driven search driven search
search strategy search strategy strategy strategy

Customer relationship
orientation X
Entrepreneurial orientation X X X X
Technology orientation X X
Table VIII.
Note: Results that are significant at the 0.05 level (two-tailed) Summary of the results
 BJM 6.1 Practical implications
8,3 The results also provide guidance for business practitioners. For example, a thorough
analysis of the firms strategic orientations and goals for innovation activities could
identify certain strategic mismatches, and in the best case resolve them. If the firm is
very oriented towards customer relationships, it might be mainly prone to adopting a
market-driven search strategy. However, in such a case the managers should consider
342 whether or not it would be worthwhile to seek a broader repertoire of knowledge
sources. It would be a good starting point to recognize the potential dangers of seeking
information only from existing customers or existing technology partners and thereby
getting a myopic view of either customer or technology development. This study,
however, does not suggest that all firms should utilize every possible search source in
all cases. The analysis needs to be done on a case-by-case basis depending on the firms
strategic objectives. However, entrepreneurially oriented firms by their very nature use
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a wider variety of knowledge search strategies, and benefit from that in their
innovation results. Therefore, cultivating an entrepreneurial culture might well pay off
in various situations.

6.2 Limitations and further research directions

This study has several limitations concerning the methods and the data. The
single-informant approach used in the data collection could have resulted in common
method bias. Further studies could also consider the robustness of the research setting
to place more emphasis on the chronological order of events, in order to make causality
claims more justifiable. Moreover, in addition to the three strategic orientations there
are also other factors and firm orientations that could have an effect on the use of
external knowledge sources (which can be seen from the relatively low R 2 values in
some of the analyses). To tackle this issue, more research is needed, for example, on the
effect of knowledge-related factors, such as the prior knowledge base and the firms
absorptive capacity (Cohen and Levinthal, 1990) on open knowledge search. Based on
the results, it would also be interesting to further study whether the EO should be
looked at as a higher order category to technological and market orientations. Finally,
the firm as a unit of analysis and cross-sectional data include some limitations as the
use of external knowledge sources may vary in the different phases of new product
development projects or technology life cycles. For example, it could be assumed that
more emphasis is put on science- and generic-driven strategies in the early phases of
projects, whereas market-driven search strategies could be more emphasized in the
commercialization phase. Thus, more research on open knowledge search strategies
in the different phases of new product development projects is needed. Even with
these limitations, however, this study provides a basis on which to explore the
antecedents of open knowledge search, as well as its eventual outcomes in other
research settings.

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About the authors

Paavo Ritala, D.Sc. (Econ.), is a Professor at the School of Business at Lappeenranta University of
Technology. His recent research interests are in the areas of inter-organizational networks,
services, business models, innovation and coopetition (collaboration between competing firms).
He has published on these topics in journals such as Journal of Product Innovation Management,
British Journal of Management, and Technovation. Paavo Ritala is the corresponding author and
can be contacted at: ritala@lut.fi
Kaisa Henttonen is a D.Sc. (Econ.), lecturer and project manager at the School of Business and
Technology Business Research Centre (TBRC), Lappeenranta University of Technology,
Finland. Recently, she has studied determinants of efficiency in team-based organisations and
innovativeness in large organisations. Her research interests include social network analysis,
innovation management, services and organisation theory.
 BJM Hanna Salojarvi, D.Sc (Econ.), is a post-doctoral researcher in international marketing at
Lappeenranta University of Technology, School of Business. Her research interests include key
8,3 account management, customer knowledge management and customer relationship
management. She has published on these issues in Industrial Marketing Management and
European Business Review.
Liisa-Maija Sainio is Professor of International Marketing at the School of Business, at
Lappeenranta University of Technology, Finland. Her research interests include business
348 models, different types of innovation and their effects on firm strategy, and customer knowledge
processing. She has published in Technological Forecasting and Social Change, R&D
Management, Industrial Marketing Management, and Technovation, among others.
Sami Saarenketo, D.Sc. (Econ.), is Professor in International Marketing at the School of
Business at Lappeenranta University of Technology, Finland. His primary areas of research
interest are international marketing and entrepreneurship in technology-based firms. He has
published on these issues in Journal of World Business, International Business Review, European
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Journal of Marketing and European Business Review, among others.

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