Informal knowledge and innovation

This study provides a review of the literature, both conceptual and empirical, on informal knowledge flows and assesses the impact of this knowledge on organizational innovation. We examine various sources of informal knowledge such as the hiring of experts, communities of practice, board inter-locks, and geographic and ethnic communities. The chapter attempts to unbundle the process of knowledge absorption and utilization from informal and individual sources by analyzing its components to determine how firms can develop capabilities in search, transfer, and integration that enhance innovation and create competitive advantage.