Employees' Psychological and Legal Ownership of Knowledge: Intended and Unintended Consequences for the Firm



In knowledge-intensive firms, two major objectives are to: (a) create new knowledge; and (b) profit from the new knowledge. We argue that managerial practices and policies designed to achieve one of these objectives could have unintended consequences for the other one. A common managerial practice aiming to increase knowledge creation is to motivate employees to take psychological ownership of knowledge. We hypothesize that an unintended consequence of an employee’s high psychological ownership of knowledge could be increased likelihood of the employee to legally challenge current ownership and profit sharing arrangements over the knowledge to change them in her favor. This would in turn limit the firm’s ability to profit from the employee-created knowledge. A commonly used policy to secure profits from employee-created knowledge is to have employees sign employment contracts that assign all legal rights over their knowledge creations to the firm. We hypothesize that intended consequences of the sole legal ownership of the employee-created knowledge by the firm could be to limit an employee’s motivations for creating new knowledge for the firm and to increase the employee’s legal claims over knowledge. We also hypothesize that joint legal ownership of the knowledge between the firm and the employee could reduce an employee’s legal claims over the knowledge while motivating the employee to create new knowledge for the firm. We test these hypotheses in an experimental design where we use the vignette technique to create two levels of each managerial intervention: (a) high versus low levels of psychological ownership; and (b) Sole (100%) firm ownership of the knowledge versus joint ownership (50/50) between the firm and the employee. Data from 334 participants provide support for our hypotheses. The findings imply that knowledge-intensive firms could foster new knowledge creation and profit from the resulting knowledge by motivating employees to take psychological ownership of knowledge and offering them joint ownership rights to the knowledge.
Contact information:
Prof.dr. S.L. van de Velde