Boundary effects on UK and German manufacturing innovation

We investigate how boundaries in knowledge control, sharing and co-ordination influence UK and German manufacturing firms’ innovation activity. Issues of knowledge control related to plant ownership are generally found to be unimportant for innovation, but knowledge sharing between plants affects innovation in UK plants with no in-house R&D capability. More important is that knowledge co-ordination boundaries, related to functional demarcation in the innovation process, are more prevalent than either knowledge control boundaries or those related to knowledge sharing. Cross-functional teams, which may overcome the boundaries to knowledge co-ordination arising from functional demarcation, are associated with more successful product change and shorter product lifetimes in both the UK and Germany. These relationships, and differences in the incidence of cross-functional teams, provide a partial explanation for differences in innovation performance between UK and German plants.