Preserving prerequisites for innovation: Employee-related knowledge protection and organizational trust

Abstract

The purpose of this paper is to study how the motivation in firms to safeguard the prerequisites of innovation relates to the strength of the employee-related protection mechanisms that deal with knowledge leaking and knowledge leaving, and the moderating effect of organizational trust in the relationship. The hypotheses were tested on a sample collected in Finland from 80 companies engaged in R&D. A partial least squares was used for the analyses. Knowledge leaking and leaving from a firm can be approached with both formalized and soft types of employee-related mechanisms; that the motivation to secure innovativeness positively relates to both forms; and that the presence of organizational trust is especially effective in reinforcing employee-related practices that can prevent knowledge leaving. The data were gathered in a single western European country and that may have affected the results. The managers would do well to introduce both formalized and soft forms of protection so as to mitigate the effects of knowledge both leaving and leaking. Building on the findings of this study, managers could prioritize between the different categories and mechanisms depending on the market and industry they operate in. This study adds to the literature by studying quantitatively the employee-related protection mechanisms and the effect of organizational trust in the usage of those mechanisms.