Date: April 12, 2013 Topic: The Shrinking ... - Georgetown Law

Our research reconciles these two different perspectives. We find that KMS use only
leads to new relationship formation when there exists social capital to support it, in the form of
indirect ties; otherwise, KMS use decreases relationship formation. We also find that KMS use
increases value creation among those with existing direct ties--and actually decreases revenue
generation where ties are lacking. Finally, we find that the positive effects of KMS use depend
on pre-existing social capital (indirect ties), in terms of both relationship formation and value
creation outcomes.
There are some important limitations in our analysis. Although we control for differences
across individuals by using random- and fixed-effects regression models, our analysis is still
limited by the fact that the data come from a single case firm. We cannot generalize to other
settings where the rules, incentives or norms regarding workplace collaboration could be
different than those in our setting. In addition, differences in the KMS technologies implemented
and in the country jurisdictions where firms operate could also influence the ways that this
technology impacts relationships and value creation. Nonetheless, our study provides one of the
first systematic investigations of how technology-based knowledge sharing affects the fabric of
relationships and the production of economic value.
Contributions
Our findings suggest that for complex knowledge organizations such as law firms, KMS
is best used as an entry point into collaborations that can be productive—and works best when
applied to knowledge that is “local” in the sense of complemented with existing workplace
relationships. The idea that the KMS can facilitate knowledge reuse directly is not supported, this
can even hurt value creation efforts.
Most thinking about the benefits of implementing searchable knowledge databases in
organizations has focused on individuals’ ability to discover and access distant knowledge that
they would not otherwise have been exposed to. Yet we find little evidence that distant search
pays off: downloading documents from unconnected others does not lead to new working
relationships, and actually harms subsequent revenue generation.
Our study contributes to theory on technology and relationships. We help unpack how the
introduction of a new technology influences relationship formation and social capital among
organizational members. In doing so, we help to reconcile a materialist view and a social view of
technology use by showing that the positive effects of technology use require pre-existing social
capital to be realized.
Further, taking our findings on relationship formation and value creation together
suggests an inversion of common thinking about the way technology complements social
relationships: instead of the former being useful where the latter is lacking, it appears that—at
least in the case of complex knowledge production—search technology is most useful in the
context of close social relations.
Our findings also contribute to networks research. In contrast to what we might expect
based on weak tie theory, we find that more value is created from downloading direct contacts
than downloading indirect weak tie contacts. This is true, even though people are likely to have
more overlapping knowledge with their strong ties. This finding suggests that some of the most
productive discovery and learning from use of knowledge databases occurs among close
colleagues with prior working relationships.
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