INTRODUCTION

It is broadly recognized that knowledge-based organizations are considered as the significant drivers of innovation and growth in today’s emerging knowledge economies (Bruton et al., 2018 as cited in Eldridge, Nisar, & Torchia,2021) but these economies basically lack entrepreneurial expertise and resources, especially strategies to employ innovative activities (Peng, 2001). Firms develop knowledge through various external and internal sources to obtain innovation (Shujahat et al., 2019). Some firms seek knowledge and innovation through continuous technological development (Mansfield, 1988) and others possess through internal sources such as culture, experiential learning, decision making, retrospective experiences and interactions etc. (Zubielqui, Lindsay, Lindsay, & Jones, 2019). Knowledge is not universally accessible (Arrow, 1962), especially tacit knowledge that resides in human brains and manifest in routine actions (López-Cabarcos, Srinivasan, Göttling-Oliveira-Monteiro, & Vázquez-Rodríguez, 2019). The creation and diffusion of tacit knowledge is possible through frequent interactions within organization (Shujahat et al., 2019) and investing on research and development activities in order to attain a high profits based on market demand (Romer, 1994, as cited in Jones,2019 ).

The knowledge in organizational settings is tacit and socially complex (Nonaka & Takeuchi, 1995). The complex nature of tacit knowledge often makes knowledge acquisition very challenging and difficult (Kim, Im, & Slater, 2013), because it is embodied in organizational members, tools, tasks, and networks. It can be transferred more effectively through human mobility (Song, Altman, Glenny, & Deeks, 2003) and hands-on-experiences (Almeida & Kogut, 1999, as cited in Phene, Tallman, & Almeida,2012) as human mobility reduces barriers, in the transfer of knowledge and enhance diffusion. Human mobility is a significant driver of knowledge spillovers within and outside the organization (Teece, 2018). Destruction of previous knowledge creates new spirals of knowledge. It revolves in cyclic form and is dynamic in nature. The dynamism of knowledge creation and diffusion fuels innovation (Nonaka & Takeuchi, 1995).

Knowledge spillover is a socially complex phenomenon, because it resides in social interactions. Frequent social interactions encourage the exchange of ideas (spillover) that fuels innovation in many ways within the organizations (Braunerhjelm, Ding, & Thulin, 2018). When people interact, ideas exchange and spillover occurs. Several practices nurture these interactions within the firm in which the role of human resource practices gain momentum in last decades (Hislop, 2012). According to Jacobs and Human Resources Research Organization (1970), the spillover school of thought describe that diversity of activities leads toward knowledge spillover. Human resource practices involves bundle of activities and each activity outbids the spirals of new knowledge which nurtures the knowledge spillover process (Santoro & Usai, 2018), such as recruitment and selection (R&S) helps in selecting the most appropriate employee for the organization. Induction stages of R&S are significant the in spillover process at each level i.e. from employee first interview to final selection stage. After recruitment, training and development (T&D) are the most significant determinants of knowledge spillover. It opens the new horizons of exchange of ideas through multiple training programs (Santoro & Usai, 2018). These programs polish individual competencies and paves a way for knowledge spillover through the employees’ interactions. Compensation and appraisal determine employee performance and drives motivation.

A committed and motivated employee works more devotedly and supports firm knowledge-creation mechanisms. The most pertinent practice of HR is employee relations. It refers to the clusters of informal frequent interactions of employees within organization at informal social events. Till now, the role of human resource practices is widely studied empirically to investigate the firm performance and competitive advantage through many proxy variables like employee satisfaction, turnover intention, employee loyalty, retention and innovation etc (Cooke, Schuler, & Varma, 2020). The role of HR-practices in the formation of knowledge spillover through the lens of lived experiences of managers is least explored. Literature sufficiently supports the significant role of human resource practices in the knowledge spillover through the recruitment and selection process, training and development programs, compensation and appraisal mechanisms, and employee relations but the operationalization of HR-practices and the way knowledge spillover occurs through it needs a subjective understanding from the manager’s perspective. The subjective nature of each practice and its influence on knowledge spillover seems worth exploring phenomenon. This article will contribute in the domain of knowledge management by providing a conceptual model for academicians to add value towards theory enhancement in knowledge spillover literature. For practitioner, the study will contribute to the domain of HR to specify role of each HR practices in the knowledge creation process. To address/refute research questions, interviews of HR-heads and team leaders were conducted. This study will reflect the vision of developing countries and corporate challenges related to knowledge diffusion and exploration.

LITERATURE REVIEW

The significant role of knowledge always remains a source of competitive advantage in each era. Firms identify, acquire and use externally generated knowledge to create innovation. Firms seek knowledge through many direct and indirect means of spillovers (Zubielqui, Fryges, & Jones, 2019). These common means of spillover include buyers, suppliers, scientists, engineers, customers and employees who switched jobs. Knowledge is partially tacit, and it transfers through frequent interactions among individuals. Therefore, interaction is a prerequisite determinant to increase the exposure of potential knowledge spillovers.

Knowledge spillovers occur in two forms i.e., internal and external. Internal spillover drives the positive influence of knowledge on individuals within organization that supports in production of goods and services. An external spillover impacts outside of the firm. In any industry, knowledge travels among firms as they share information about products/services and new production mechanisms to facilitate innovation and growth (Braunerhjelm et al., 2018). For example, technological development in networking and security services support many firms to foster in knowledge travels ways. Even HR training function facilitate faster knowledge travels among different actors of firms. The exchanges of ideas leads to development of new products and services. There are other types of spillovers i.e. market and network spillovers. But the latest growth theory emphasizes on the furious role of knowledge spillovers (Aghion, Akcigit, Bergeaud, Blundell, & Hémous, 2019).

Knowledge accumulates through R&D activities, frequent interaction of employees and the significant role of human resource practices in an organization. Information technology becomes the common denominator of information’s diffusion at zero cost in today’s world. But there is much significant difference between information and knowledge (Audretsch, Grilo, & Thurik, 2011). Information comprises simple facts which can easily be diffused, but knowledge is a context bound entity, its diffusion and spillover depends on social entities. In today’s globalized economy, organizations alone are not the source of knowledge production, practitioners and scholars began to look for externalities (Caiazza, Belitski, & Audretsch, 2020). In refocusing the model of knowledge production, scholars face two major challenges: the first one is to determine theoretical basis of knowledge spillover; and the second challenge is to identify the measurement process of knowledge spillovers. To confront the first challenge, scholars focus on the new growth theory of knowledge. (Bawa & Krugman, 1991) argues that second challenge is quite impossible to measure the invisible knowledge flows within an organization. Krugman and Romer (1991, as cited in Jones,2019) viewed the models based on increasing returns to scale in production and identifying the role of externalities in knowledge production.

Knowledge externalities are so important and forceful entities which triggers the spillovers of knowledge across all boundaries (Caiazza et al., 2020). These externalities involve stakeholders, government agencies, creditors, debtors, employees, non-profit firms and customers. These external entities nurture the knowledge production process which is invisible and based on tacit knowledge that is vague, difficult to codify and cannot be formalized and written down. It emerges through interaction among individuals, non-rival in nature, develop through particular application and implementation of which gives economic value (Aghion et al., 2019). Therefore, observations, interactions, and communications are the key sources to gather knowledge (Glaeser, Kerr, & Ponzetto, 2010). Knowledge spillover processes are not homogenous in nature within industry. It varies due to structure of organization leadership and its management systems. Absorptive capacity of each firm also influence its knowledge production process. Those firms who invest on R&D develop capacity to adopt new knowledge which drives firm economic growth (Agrawal, 2002). Social capital develops social networks which is the significant source of knowledge production especially relational networks. Universities are the major hub that drives spillover process through sources to bridge industry individuals and government institutes (Audretsch & Feldman, 2004).

Another important determinant of knowledge spillover is entrepreneurship. Entrepreneurship is related with the startup and growth of new enterprises. Traditional mechanisms of spillover were related to the appropriateness of new knowledge and absorptive capacity of firms; however, entrepreneurship assumes that firms exist exogenously and then undertakes (knowledge) investments to generate innovative outputs (Audretsch, Cunningham, Kuratko, Lehmann, & Menter, 2019). Entrepreneur conceives an idea of business and develop the expected value of knowledge to start new business venture. Knowledge spillover drives innovation which is the preliminary requirement of each entrepreneurial firm (Audretsch et al., 2019).

Most of the organizations use knowledge spillover for strategic purpose of competition. Those firms are labeled as active actors and others as passive firms. Organizations can absorb knowledge through absorptive capacity (Cohen & Leventhal 1990, as cited inMarrucci, Iannone, Daddi, & Iraldo,2022). Firms absorb knowledge from three main sources i.e. industry, academia, and government. Academia and government are public sources that emphasis basic knowledge more and less appropriate. On the other side, industry generates less basic and more appropriate knowledge, because they operate in an actual dynamic environment. Therefore, organizations require more spillovers from industry side (Audretsch et al., 2019). High absorptive capacity and technologically advanced firms attain more profitable opportunities to revamping industry. An accumulated stock of public knowledge is another potential source of spillovers because it generates new ideas (Schmookler's, 1996, as cited inGehringer,2022). Retrospective accumulation of public ideas with technological support produces new ideas of innovation. Old knowledge is absolute with the emergence of new knowledge, but it evolves on the basis of previous knowledge consequences. Researcher calls this emergence as knowledge obsolescence phenomenon (Chan, Dzara, Dimeo, Bhalerao, & Maggio, 2020). This knowledge evolving process occurs through knowledge spillovers process in which old knowledge diffuses and new knowledge emerges.

The transfer of knowledge requires frequent face to face interactions, personal relationship, and spatial proximity; therefore, it is a public property but highly a local one (Wijngaarden, Hitters, & Bhansing, 2020). Critical knowledge inputs diffuse through the markets of specialized services and skilled workers that both embodies knowledge through pecuniary externalities. Some research claims that intangible knowledge diffuses through informal frequent interactions and meetings with people in offices especially informal places like coffee bars and hotels etc. In a profit-seeking firm, expansion of product line drives innovation activity. Innovation activities in a firm not only lead towards new product development, but also significantly contributes in a general stock of new knowledge which builds subsequent innovators (Wijngaarden et al., 2020). It may act as the engine of economic growth because it raises the collective level of industry knowledge. Learning by doing considers as source of spillovers (Irwin & Klenow, 1994, as cited in Ingram,2017) when people invest time in doing some projects/work, they learn from each other. In an organization, cooperation increases knowledge flows among the partners and nurture internal spillovers.

Some researches support that partners may voluntarily increase spillovers between them; however, the magnitude of spillovers depends on the decision to cooperate mutually (Cassiman, Veugelers, & Arts, 2018). Research and development related collaboration establish innovative networking which enhances knowledge flows because ideas exchange through networking which is beneficial for each firms (Capron, Yvon, & Muller, 1996).

Methodology

Constructionism is considered as the philosophical lens for this study (Crotty, 1998). Through these shared experiences, informants were able to describe their tacit perspective about phenomenon and the significant role of human resource practices that enables researcher to establish better understanding of informant’s actions and experiences (Lather, 1992; Neuman & Robson, 2014). The ontological stance of this study is relativism and the epistemological stance is subjectivism (Scotland, 2012). This study will be adhering phenomenology as research methodology where the central notion is lived experiences of individuals (Creswell, 2013; Merriam & Tisdell, 2015). Phenomenology is selected as appropriate research methodology. Phenomenology refers to the study of conscious phenomenon and it emphasizes neither on the subject of experience nor on the object of experience but focuses on the central point of contact at which “being and conscious meet”. The task of the phenomenological authors is to investigate knowledge spillover process using both objective and subjective perspectives (Marks, Dawa, & Kanyemba, 2020).

For data analyzing, bracketing, phenomenological reduction, horizontalization and imaginative variation are the terms of phenomenology used to describe the essence of phenomenon. Husserl (1985 as cited in Mckinnie, Bourgeois, & Husserl,1985) described bracketing (epoche) as the temporary suspension of existing personal perspectives (biases), beliefs, propositions and assumptions in order to get and capture the essence of phenomenon. Phenomenological reduction (eidetic reduction) is a process of continually returning essence of experience to cater the inner meaning and it is created during data analysis process while extracting similar and dissimilar themes from interview transcripts and field notes. Horizontalisaiton is a process where data is treated in equal weights and frequencies are analyzed in terms of typical and frequent themes. Imaginative variation means viewing the data from all but different dimensions. This study is descriptive in nature, used interviews as data collection method. This study used judgmental sampling as a type of non-probability sampling (Groenewald, 2004).

Sample size calculation in qualitative inquiry is linked with data saturation and explains consistent interviews of informants until the textual data reaches at the point of diminishing return (Marshall, Cardon, Poddar, & Fontenot, 2013).Creswell (2013) proposed 3 to 4 informants, whereas (Morse, 1995) proposed at least 6 informants for phenomenological inquiry. Determination of saturation level through informant’s valid response is the final matter of judgment (Mason, 2010: Sandelowski, 1995 as cited in Gill,2020). Thus, 6 informants were interviewed and their iterative themes verify the point of theoretical saturation.

Detailed face-to-face semi-structured interviews of representatives of human resource departments designated as head of HR and team leaders having relevant experience of 7-12 years, were conducted. Interviews were conducted in English and Urdu based on their convenience of language, later interviews were transcribed for data analysis purpose. Based on the transcription of these interviews, different units of themes are identified which are clustered together to form key themes, variant and invariant dimensions. To assure reliability of data, the transformed responses of informants were shared and discussed with informants. They suggested minor changes in transcriptions. This approach ensures the validity of transcriptions.

RESULTS

As described earlier, the least subjective knowledge is known about the role of HR-Practices, irrespective of knowledge spillover process. Therefore, interviews were conducted to explore new horizons of knowledge spillover process employing the lens of experienced informants The age of informants ranged between 28-45 years. Firstly, researcher listed all statements relevant to the informant’s experience in the process of horizontalization. Then each comment was treated in equal weights before phenomenological reduction. Secondly, an invariant dimension of knowledge spillover is listed. Third, the researchers grouped variant and invariant dimensions into themes with frequency analysis. At fourth, variant and invariant dimensions of themes are linked with textual description of each informants and group’s experience. Finally, group textual descriptions were used to describe a conceptual description about the essence of informant’s experience as a whole. The description of knowledge spillover process lies in the heart of the lived experience of informants.

In Table 1 the demographical details of informants show that 6 informants were interviewed. Four were male informants and two were females. All are designated at key positions of HR and director level in reputable institutes. Face-to-face interviews were conducted. The age bracket of 6 informants were between 28-45 years. Their active role in human resource department is also considered because an active person can better explain the role of HR practices in facilitation of knowledge spillover process.

Informants were interviewed at their offices after taking formal appointment through e-mail and call with a semi-structured interview protocol related to the study. At first, all pertinent themes were listed then15-30 themes were extracted from each interview then later it categorizes into similar and dissimilar form. This process adhered the phenomenological reduction. For this, all pertinent themes are listed based on informant transcriptions. Prominent codes extracted from interviews are mentioned in Table 2.

In this phase of analysis, each theme compared with each other to find same and different codes. In Table 3, 3 codes were found same based on informant’s iterative responses and 21 codes were different. Details are exhibited in Table 3.

After identifying the same and different codes from informant’s interviews. Another step refers phenomenological reduction in which same and different themes/codes were compared with review of literature to gain theory support. Then, researcher reduce and separate the themes in the defined categories made from literature review of human resource practices in terms of recruitment and selection, training and development, compensation and appraisal management and employee relations. Mentioned codes are combined and counted for phenomenological reduction indicated in Table 4.

  

DISCUSSION

Innovation is considered as the foremost and first human issue within organization. Behind innovation are the people who propose and implement ideas, in-actual it resides in effective human resource management (Kirsimarja & Aino, 2019). The lack of knowledge causes stagnation and hinders firm innovation. However, HRM and knowledge are the key drivers of innovation in today’s firms (Kirsimarja & Aino, 2019). Organizations use effective human resource practices producing the pool of knowledge spillover for the company. The process of knowledge spillover occurs through communication, informal frequent interactions, direct and indirect ties, interactive culture, mutual consensus, guidance, commitment, team work, brainstorming and dialectical ways of interaction within the organization (Trachuk & Linder, 2019). The invariant role of human resource practices is grounded in the five defined levels of dimensions. The central aim of these dimensions is to create the new spirals of knowledge within organizations, but the process of spillover is variant. To enhance organization’s knowledge spillover process, managers clubbed traditional HRM practices with knowledge sharing activities. Knowledge-based HR practices purposefully designed to improve knowledge processes within an organization (Fawehinmi, Yusliza, Ogbeibu, Tanveer, & Jabbour, 2022).

Recruitment and selection is considered as the first source of Knowledge spillover within organization. HR-department conducts need-based analysis which comes under R&S induction process, other departments share their requirements of personnel according to their need then HR-department design advertisement accordingly and use channels to launch hiring process (Jiang, Lepak, Hu, & Baer, 2012). Interviews are conducted by shortlisting the most suitable candidates out of the pool of potential candidate. During different levels of interviews, technical and situational questions are asked by interviewers to assess candidates's competency for required job during which exchange of ideas (spillover) occurs frequently. Knowledge-based recruitment drives the selection of a strong and explicit personnel with relevant skills, knowledge, and capabilities.

Proposition 1: Knowledge-based Recruitment & Selection positively influence knowledge spillover process.

Peet and Robbins (2010) stated that “competent employees do not remain competent forever”. They require new updated skillsets (Winne & Sels, 2010) and to keep them updated, firms conduct training and development to nurture new skills. HR-department conducts need-based analysis to provide training according to specified purpose (Kirsimarja & Aino, 2019). Trainers are hired from both inside and outside sources depending upon requirements of training programs. Several formal training sessions are conducted to polish the hard and soft skills of employees that enhance competencies and career growth. Learning by doing plays significant role in exchange of ideas, employee learns then apply knowledge on daily activities which enhance their performance.

Proposition 2: Knowledge-based Training & Development positively influence knowledge spillover process.

Employee relations nurtures exchange of ideas (spillover) through frequent informal interactions, socialization and recreational events. HR-department plans some events occasionally like father’s day, mother’s day, Eid parties, birthday celebrations and tours etc. These informal frequent interactions strengthen the bond between employees and organization as a result employee retention, loyalty, job security, sense of belonging, motivation, commitment, and dedication increases (Wang, Sung, Chen, & Huang, 2017).

Proposition 3: Knowledge-based Employee Relations positively influence knowledge spillover process.

Compensation and appraisal management practices improve employees existing knowledge and skill sets by evaluating current position (Kirsimarja & Aino, 2019). HR-department conducts appraisal annually, based on that compensation plans and benefits are given to employees. MBO (Management by objective) method is used by some HR-department in which goal specify attainment measures according to obtained performance (Kirsimarja & Aino, 2019). HR managers use tangible and intangible incentives to motivate employees. When employees are rewarded as per their contributions, they contribute more significantly (Andreeva & Kianto, 2012).

Proposition 4 : Knowledge-based Compensation & Appraisal management positively influence knowledge spillover process.

The thematic explanation (findings) indicated the essence of knowledge spillover process (phenomenon) which is shown in Figure 1. The central notion portrayed the essence of phenomenon (knowledge spillover) and inner layer/circle indicates the close link with essence i.e. team work, socialization, guidance, interactive culture, role of communication etc. are more closely interlinked with knowledge spillover process. However, the outer layer/circle depicted bit distant link with knowledge spillover process i.e. hard work, learning by doing, flexible working hours and systematic structure etc.

CONCLUSION

Literature indicates three sources of knowledge spillover i.e. academia, industry and government. Subjective lived experiences of informants validated that interviews, training and development and employee relations are significant sources of knowledge spillover within organization. Therefore, this study concluded frequent employee interactions, cooperative work environment along with participative leadership indicates the real determinants (essence) of knowledge spillover process within knowledge intense institutes.

Implications and future directions

This study will provide a conceptual model to academics and enriches the data which adds value towards theory enhancement. It opens new avenues of innovation and growth for organizations through the significant role of HR-practices. Knowledge spillover process can be studied through many other dimensions like role of transformative leadership, social capital, digital marketing, absorptive capacity, entrepreneurship, dynamic capability, strategic role of knowledge spillover and co-creation etc. Future studies should focus this perspective on the basis of gender (male and female). It may be studied through profitability and how companies manage knowledge inflows and outflows customers and employees. It may study in quantitative perspective as well.

CONFLICT OF INTEREST STATEMENT

The authors declare no conflict of interests.