Motivation, Knowledge Transfer, and Organizational Forms

spin-offs, or holdings. We intend to show that such orEmployees are motivated intrinsically as well as extrinsically. ganizational forms are suitable only under special circumIntrinsic motivation is crucial when tacit knowledge in and bestances defined by specific aspects of knowledge and motween teams IIILIS~be transferred. Organizational forms enable tivation. In line with the knowledge-based view of the different kinds of motivation and have different capacities to firm, we distinguish explicit from tacit knowledge. We generate and transfer tacit knowledge. Since knowledge genask what kinds of motivation are needed to generate and eration and transfer are essential for a firm's sustainable comtransfer tacit, as opposed to explicit, knowledge. To expetitive advantage, we ask specifically what kinds of motivation plore this question, we resort to a well-established and are needed to generate and transfer tacit knowledge, as opposed widely empirically supported social psychological theory to explicit knowledge. of the interaction between intrinsic and extrinsic moti(Motivation; Knowledge Transfer; Tacit Knowledge; vation. This theory, introduced into economics as crowdCrowding Effects; Firm Theory; Resource-Based View) ing theory, is applied here to organization theory. Intrinsic motivation is not simply additive to the motivation induced by prices (extrinsic incentives). Rather, under some conditions the use of the price system undermines intrinsic motivation (crowding-out effect), making motivation endogenous to organizational forms. We argue that knowledge transfer is intimately connected to motivation and that sustainable competitive advantage re