Network Embeddedness, Knowledge Management, and Organizational Performance ─ a case study of Taiwan Semiconductor Manufacturing Company

Knowledge is widely recognized as an important source for a firm to gain competitive advantage. A firm can use its internal knowledge and capability to create innovation, and it can acquire external knowledge and resources from its network as well. Network is a critical mechanism for a company to acquire external knowledge to enhance its own internal capabilities. Network embeddedness refers a firm’s relational and structural embeddedness in the network, and it is an important characteristic of a firm when leveraging its social capital, and thereby to have superior performance. Although the importance of network embeddeness is increasing, little has been done in the literature in examining the relationships among network embeddedness, knowledge management and organizational performance. Therefore, this study attempts to fill the gap in the literature by providing a research framework through extensive literature review to identify the key constructs to explore the relationships among these three dimensions. The research object of this study is the leading foundry in the world, Taiwan Semiconductor Manufacturing Company (TSMC). This study provides an exploratory analysis of network relationships about TSMC in semiconductor industry and examines the application of theory to practice. Since TSMC is the focal firm of the network addressed in this study, the research purpose is to clarify how the relational embeddedness and structural embeddedness of TSMC in its network affect its knowledge management to gain superior organizational performance. The major findings of this study include: First, the relational and structural embeddedness are inferred to positively influence the focal firm’s knowledge management. Second, knowledge management is positively related to organizational performance.