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Considers firms’ management of knowledge creation, diffusion and implementation. In particular, examines the diffusion link in this chain and presents a new framework where an ocean of ideas flows much like an ocean current. Through its past innovative activity and its employees’ professional experiences, a firm is caught up in a “technology current”. The degree of knowledge diffusion across organizations depends on encouraging and thwarting this current’s forces. The framework suggests that the ease of knowledge diffusion depends on the degree of similarity in organizations’ technical prowess. As an example, knowledge flows in the semiconductor industry are examined through citations to Intel’s journal articles. The empirical findings show that Intel’s knowledge, codified in these articles, diffuses more quickly to organizations in Western Europe and Japan than those in Taiwan and Korea. This pattern coincides with geographic market leadership and suggests that knowledge networks exist across countries.

Fingerhut, based in Minnetonka, Minnesota, is a direct-marketing company that sells a smorgasbord of consumer goods through an array of specially targeted catalogs. In November 1996, an article in the Star Tribune, a major Minneapolis newspaper, drew attention to a class-action lawsuit pending against Fingerhut that suggests the firm made its profits by exploiting the poor. Several civil rights groups rallied around the suit and submitted amicus curiae in favor of the litigation. The case illustrates issues in ethics and management communication. Discussions focus on the constituencies. Is Fingerhut exploiting its customers or providing them with an affordable method of obtaining valued consumer goods on credit? Do retailers have a duty to offer products at reasonable prices? Are the high interest rates reasonable given the risk? What are the options: pawn shops, rent-to-own? What is the profile of the typical Fingerhut customer? Discussions also focus on the issues communicating to the constituencies. How much damage will the lawsuit do to Fingerhut's image as an ethical, socially conscious company? What communication strategies can the firm employ? Should it react to the lawsuit? What should it tell its employees?