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Small- and medium-sized enterprises (SMEs) often do not have slack resources with which to develop internally a broad spectrum of capabilities and to observe in depth the firm's environment. Therefore, they need to carefully develop abilities to absorb knowledge from outside the firm's boundaries so as to have access to cutting-edge knowledge in spite of limited resources. One strategy is to establish knowledge management (KM) projects for this purpose. In this paper, we describe how KM projects and subsequently emerging KM routines in SMEs facilitate the enhancement of the firm's absorptive capacity (AC; i.e., the ability to recognize, capture, and assimilate external knowledge). Our results indicate the importance of recognizing potential knowledge providers prior to any absorption of knowledge from external sources. Furthermore, we emphasize the relevance of routines for absorbing knowledge and we distinguish between KM routines that are deliberately developed for absorbing knowledge and KM projects where knowledge absorption happens unconsciously. Finally, we point out that different stages of an AC process follow different logics (exploration vs. exploitation) and, thus, a skilful management of the AC cycle is necessary to leverage externally absorbed knowledge.

Customer knowledge has not yet been recognized as a possible source of strategic competitive advantage in expansion of the knowledge-based view. The purpose of this paper is, therefore, to gain initial insights into the strategic dimension of customers knowledge in order to enable companies to define, identify and motivate the right customers and work with them together on a strategically successful level.

The following single case study is based on semi-structured interviews with nine employees and strategic customers as well as a document analysis in an entrepreneurially oriented smaller firm equipped with limited resources.

The findings demonstrate that strategic customers take on a valuable position within the company. It appears that the strategic customer is more aware of his/her value than the company itself. A definition and first criteria of strategic customers could be determined and a systematic identification of strategic customers is possible with the help of this study.

The paper is an empirical contribution to the existing customer knowledge management literature and aids in gaining further insight into the definition, identification and motivation of strategic customers. A definition is derived based on a literature study and developed further through the results of the empirical analysis. An additional result of the empirical study showed that customer oriented knowledge management is a promising bridge between the knowledge- and market-based view.

The apparent lack of resources in entrepreneurially oriented smaller firms can be overcome through the addition of external knowledge resources, which the paper refers to as strategic customers.

Socialization is one of the fundamental processes that define how collectivities emerge. Socialization underpins the social structures that shape not only how social actors interact in community but also the boundaries of action and the rules of engagement. In the context of organizations, socialization is a process that significantly shapes organization in the way core practices shape how things are done and why they are done in particular ways. This emphasis on consistency within and between practices is seen to be greatly facilitated by specific practices like staff induction. The purpose of this paper is to review the current conceptual and empirical research on staff induction as a process of organizational socialization and outlines some of the areas for future research particularly if a social practice perspective is adopted.

The paper presents a systematic review of the relevant literature on organizational socialization and staff induction and outlines themes to which the debate can usefully be extended.

This paper focuses on how staff induction practices provide valuable insights about how social agents (especially newcomers) get socialized in organizations.

This paper provides a foundation for the various staff induction practices that other papers in this issue will be presenting. By outlining the current debate and insights from previous empirical research on staff induction, the objective is to extend the debate by outlining some new avenues for research that papers in the special issue both respond to and further explicate.

This paper explores staff induction and organizational socialization as a practice that can provide new insights into the dynamics of social interaction within organizations.

This volume of Advances in Applied Business Strategy (AABS) presents a collection of studies exploring different ways in which an organization's competences can be enhanced to create competitive advantage that is enduring or intendedly transitional.

This paper contributes to the theory of the relationship between human resource management (HRM) and innovation at small- to medium-sized enterprises (SMEs) by conducting a conceptual analysis of the question why Germany boasts by far the highest number of “Hidden Champion” SMEs. This is done by case studies from the army and public financial management of aid disbursal in developing countries. Implications for HRM at SMEs are discussed.

Conceptual analysis using case studies.

Contributing towards filling the gap concerning theoretical underpinnings of the link between HRM and innovation, we suggest that interdisciplinary work from relevant organisational case studies indicates that the concept of institutional design to provide motivational incentives may be relevant, especially concerning high performance systems with bundles of HRM practices. Specifically, the fundamental principle of subsidiarity is found to be important.

The research is broadly applicable to organisations of all kinds, as the diverse case studies indicate. We point towards tentative implications for the firms that account for the majority of the work force, namely SMEs, and among them the most successful ones, the so-called “Hidden Champions”.

HR managers can improve motivation, performance and innovation by decentralising decision-making as far as possible, while ensuring the overall organisational goals are well understood and shared, and resources are dedicated to train and educate staff. Additionally, the conception of rank-order competitions complements the institutional design.

Greater productivity and material performance as well as greater job satisfaction via larger autonomy and decision-making power on the local level can be achieved by the application of subsidiarity as key HRM configuration. This can be employed at SMEs, as discussed, but also other organisations. Further, the principle of subsidiarity and the greater emphasis on staff training and education may help reduce inequality.

Our paper contributes towards filling the gap in the literature on the link between HRM and innovation, by identifying the role of subsidiarity. We introduce an interdisciplinary perspective, with contributions from economics and psychology, among others. We also contribute to the history of HRM.