When does Knowledge Integration work? Strategic contingencies and value creation

The purpose of this paper is to examine the effectiveness of knowledge integration mechanisms in a context of shifting industry architectures. Whereas extant literature suggests that knowledge integration mechanisms – e.g. systems integration – are required to successfully coordinate and integrate distributed knowledge and capabilities across firm’s boundaries, we argue that the nexus between such mechanisms and firms’ performance is subtler. The analysis of a sample of IT solution providers illustrates that the effectiveness of knowledge integration mechanisms is contingent upon firms’ value creation strategies and their related knowledge integration requirements. If firms adopt modular design strategies, knowledge integration mechanisms are redundant and even counterproductive. Conversely, if firms pursue customization or they rely on a broad set of heterogeneous capabilities, integration mechanisms become fundamental. These results indicate that firms should match their solution design strategy with knowledge integration mechanisms.