**2.1 External knowledge acquisition**

Often, organizations do not have all necessary resources, so they have to acquire beyond organizational limits [19]. Thus, acquiring external resources plays a critical role in determining the performance implications of knowledge creation capabilities [20]. Engaging with market-based partners such as customers and suppliers can help to better specify the market requirement for innovative goods, services, or processes and to spread the costs and risks of the innovative capability [21].

**21**

*Knowledge Generation to Foster Innovation in Mexico: How Human Capital Matters*

company operates in an environment of rapid change [18].

Acquisition of external knowledge implies that an organization interacts with other organizations such as suppliers and customers [4, 6], has strategic alliances, and prefers that its collaborators attend courses and seminars [5]. When companies internalize knowledge gained through external sources, the incorporation or internalization of these individual learnings is necessary to strengthen absorptive capacity of the knowledge base at the organizational level. In contrast, the acquisition of external knowledge can deprive the organization of the opportunity to learn and build its own knowledge. When an organization chooses this option, it is because it does not have the dynamic capabilities for rapid creation, either because such knowledge is often highly tacit or because the creative process takes time and has a high opportunity cost. This opportunity cost is especially high when the

Although individuals may have differing cognitive abilities and processing speeds, the outcome of any individual learning for the organization is dependent on the organizational context where the learning occurs [22]. Another value is openmindedness to assimilate new knowledge and to adapt to new ways to do things. In that sense, knowledge generation is highly dependent upon the organization's culture and management style. In fact, a culture that promotes intensive communication, accepts new ideas, and is prepared to explore new processes and activities

Hypothesis 1: Organizational factors such as organizational culture, management style, commitment to learn, and open-mindedness have a positive impact on

Hypothesis 2: Individual skills such as professional skills, personal skills, personal motivation, and opportunity to learn have a positive influence on external

Companies as social organizations are specialized in creating and transforming knowledge [25], based on the assumption that knowledge cannot exist without human subjectivities and the context that surrounds humans [19]. The creation of internal knowledge is understood as a process that increases knowledge in organizations created by specific individuals and as part of the knowledge network of the company [18]. Knowledge is created through the dynamic interaction between individuals and/or between individuals and their environment, rather than an individual working alone [23]. That is, an organization cannot create knowledge without individuals who generate it, while the business must provide the right environment for individuals to create knowledge [6]. The knowledge created within the organization is especially valuable because it tends to be unique, specifically with a large tacit component. This is what makes it more difficult to be imitated by

Organizational culture is the most significant element that supports knowledge generation: employees are motivated to improve or find new ways of doing their activities. In contrast, management style, personal motivation, and opportunity to

competitors, which is a strategic advantage for the organization.

The literature also shows that employees are qualified to handle technical requirements needed to process and integrate new knowledge [7]. They are able to align and combine market knowledge and customers' needs to the organization's strategic goals. Additionally, to develop professional skills, the collaborators' capability to combine external knowledge into internal process is supported by their ability to understand, interact, and recognize other people's abilities and needs [24]. Moreover, their opinions and suggestions are taken into account, which facilitates

*DOI: http://dx.doi.org/10.5772/intechopen.86216*

favors the generation of knowledge [23].

external knowledge acquisition.

new knowledge generation.

**2.2 Internal knowledge creation**

knowledge acquisition.

## *Knowledge Generation to Foster Innovation in Mexico: How Human Capital Matters DOI: http://dx.doi.org/10.5772/intechopen.86216*

Acquisition of external knowledge implies that an organization interacts with other organizations such as suppliers and customers [4, 6], has strategic alliances, and prefers that its collaborators attend courses and seminars [5]. When companies internalize knowledge gained through external sources, the incorporation or internalization of these individual learnings is necessary to strengthen absorptive capacity of the knowledge base at the organizational level. In contrast, the acquisition of external knowledge can deprive the organization of the opportunity to learn and build its own knowledge. When an organization chooses this option, it is because it does not have the dynamic capabilities for rapid creation, either because such knowledge is often highly tacit or because the creative process takes time and has a high opportunity cost. This opportunity cost is especially high when the company operates in an environment of rapid change [18].

Although individuals may have differing cognitive abilities and processing speeds, the outcome of any individual learning for the organization is dependent on the organizational context where the learning occurs [22]. Another value is openmindedness to assimilate new knowledge and to adapt to new ways to do things. In that sense, knowledge generation is highly dependent upon the organization's culture and management style. In fact, a culture that promotes intensive communication, accepts new ideas, and is prepared to explore new processes and activities favors the generation of knowledge [23].

Hypothesis 1: Organizational factors such as organizational culture, management style, commitment to learn, and open-mindedness have a positive impact on external knowledge acquisition.

The literature also shows that employees are qualified to handle technical requirements needed to process and integrate new knowledge [7]. They are able to align and combine market knowledge and customers' needs to the organization's strategic goals. Additionally, to develop professional skills, the collaborators' capability to combine external knowledge into internal process is supported by their ability to understand, interact, and recognize other people's abilities and needs [24]. Moreover, their opinions and suggestions are taken into account, which facilitates new knowledge generation.

Hypothesis 2: Individual skills such as professional skills, personal skills, personal motivation, and opportunity to learn have a positive influence on external knowledge acquisition.
