Geography Reference
In-Depth Information
as passive benei ciaries; they actively search, recreate, and build upon the original
recipes.
In this process, certain types of recipe prove particularly tricky to transfer because the
sender i nds it dii cult to specify and communicate precisely where the original combina-
tion resides in the combinatorial space of ingredients; on the i gurative treasure map, it
is hard to place the 'X' that 'marks the spot'. This communication dii culty could arise
as a result of causal ambiguity (Lippman and Rumelt, 1982; Reed and DeFillippi, 1990):
the innovator might not fully understand the connection between actions and outcomes
so the roots of the original success remain unclear. It could also occur because the pro-
duction process calls on tacit personal skills or connections among individuals that the
involved parties themselves do not consciously understand (Polanyi, 1966; von Hippel,
1988), or that eludes codii cation (Zander and Kogut, 1995). These factors essentially
increase the likelihood that the knowledge transmitted has gaps. The complexity of the
recipe itself can also impair knowledge l ow by increasing the dii culty for the recipient
of i lling these gaps and correcting transmission errors.
As noted above, complexity refers to the degree to which the components in a recipe
interact sensitively in producing the desired outcome. Our dei nition here closely follows
Simon (1962), who classii es a piece of knowledge as complex if it comprises many ele-
ments that interact richly (see also Kauf man, 1993; cf. Zander and Kogut, 1995). We
adopt Simon's dei nition, but pay particular attention to the intensity of interdepend-
ence among the ingredients in the recipe. A high degree of interdependence indicates
that many ingredients inl uence the ef ectiveness of others so that a change in one may
dramatically reduce the usefulness of the recipe. Replicating the functionality of the
original recipe often requires adjustments in the set of other ingredients or the processes
for combining them. Low interdependence implies small cross-component ef ects and a
corresponding opportunity to adapt and change ingredients independently.
Discovering, or rediscovering, a complex piece of knowledge poses a stif chal-
lenge. Interdependence produces two ef ects that undermine the recipient's attempts to
receive and build on the original. First, small errors in reproduction cause large prob-
lems when ingredients cross-couple in a rich manner. In highly interdependent systems,
implementers often realize no value from adopting a set of practices unless each and
every component i ts into place perfectly; a single error threatens the ef ectiveness of
the entire system. An American automaker that attempts to adopt lean production
techniques, for instance, may alter its human resource practices and inventory poli-
cies, yet see no benei t because it failed to invest appropriately in l exible production
equipment. The fragility of such tightly coupled systems has been well documented
(Perrow, 1984; Weick, 1976). Second, interdependence leads to a proliferation of 'local
peaks'. These internally consistent - though not necessarily optimal - ways of combin-
ing ingredients elude improvement through incremental search because altering any
single element degrades the quality of the outcome (Kauf man, 1993). Such local peaks
would pose no problem to omniscient actors, who could assess the entire space of pos-
sibilities, but for individuals with i nite cognitive abilities and a limited purview of the
landscape, such search proves dii cult; in the face of high interdependence, searchers
frequently i nd themselves trapped on local peaks. Moreover, these local peaks tend
to correspond to poor recipes precisely when interdependence creates a thick web of
potentially conl icting constraints.
