• Journal of Global Scholars of Marketing Science
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• v.19 no.4
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• pp.32-43
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• 2009

Trust has been studied extensively in psychology, economics, and sociology, and its importance has been emphasized not only in marketing, but also in business disciplines in general. Unlike past relationships between suppliers and buyers, which take considerable advantage of private networks and may involve unethical business practices, partnerships between suppliers and buyers are at the core of success for industrial marketing amid intense global competition in the 21st century. A high level of mutual cooperation occurs through an exchange relationship based on trust, which brings long-term benefits, competitive enhancements, and transaction cost reductions, among other benefits, for both buyers and suppliers. In spite of the important role of trust, existing studies in buy-supply situations overlook the role of trust and do not systematically analyze the effect of trust on relational performance. Consequently, an in-depth study that determines the relation of trust to the relational performance between buyers and suppliers of business services is absolutely needed. Business services in this study, which include those supporting the manufacturing industry, are drawing attention as the economic growth engine for the next generation. The Korean government has selected business services as a strategic area for the development of manufacturing sectors. Since the demands for opening business services markets are becoming fiercer, the competitiveness of the business service industry must be promoted now more than ever. The purpose of this study is to investigate the effect of the mutual trust between buyers and suppliers on relational performance. Specifically, this study proposed a theoretical model of trust-relational performance in the transactions of business services and empirically tested the hypotheses delineated from the framework. The study suggests strategic implications based on research findings. Empirical data were collected via multiple methods, including via telephone, mail, and in-person interviews. Sample companies were knowledge-based companies supplying and purchasing business services in Korea. The present study collected data on a dyadic basis. Each pair of sample companies includes a buying company and its corresponding supplying company. Mutual trust was traced for each pair of companies. This study proposes a model of trust-relational performance of buying-supplying for business services. The model consists of trust and its antecedents and consequences. The trust of buyers is classified into trust toward the supplying company and trust toward salespersons. Viewing trust both at the individual level and the organizational level is based on the research of Doney and Cannon (1997). Normally, buyers are the subject of trust, but this study supposes that suppliers are the subjects. Hence, it uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers, like buyers, are the subject of trust since transactions are normally bilateral. From this point of view, suppliers' trust in buyers is as important as buyers' trust in suppliers. The suppliers' trust is influenced by the extent to which it trusts the buying companies and the buyers. This classification of trust using an individual level and an organization level is based on the suggestion of Doney and Cannon (1997). Trust affects the process of supplier selection, which works in a bilateral manner. Suppliers are actively involved in the supplier selection process, working very closely with buyers. In addition, the process is affected by the extent to which each party trusts its partners. The selection process consists of certain steps: recognition, information search, supplier selection, and performance evaluation. As a result of the process, both buyers and suppliers evaluate the performance and take corrective actions on the basis of such outcomes as tangible, intangible, and/or side effects. The measurement of trust used for the present study was developed on the basis of the studies of Mayer, Davis and Schoorman (1995) and Mayer and Davis (1999). Based on their recommendations, the three dimensions of trust used for the study include ability, benevolence, and integrity. The original questions were adjusted to the context of the transactions of business services. For example, a question such as "He/she has professional capabilities" has been changed to "The salesperson showed professional capabilities while we talked about our products." The measurement used for this study differs from those used in previous studies (Rotter 1967; Sullivan and Peterson 1982; Dwyer and Oh 1987). The measurements of the antecedents and consequences of trust used for this study were developed on the basis of Doney and Cannon (1997). The original questions were adjusted to the context of transactions in business services. In particular, questions were developed for both buyers and suppliers to address the following factors: reputation (integrity, customer care, good-will), market standing (company size, market share, positioning in the industry), willingness to customize (product, process, delivery), information sharing (proprietary information, private information), willingness to maintain relationships, perceived professionalism, authority empowerment, buyer-seller similarity, and contact frequency. As a consequential variable of trust, relational performance was measured. Relational performance is classified into tangible effects, intangible effects, and side effects. Tangible effects include financial performance; intangible effects include improvements in relations, network developing, and internal employee satisfaction; side effects include those not included either in the tangible or intangible effects. Three hundred fifty pairs of companies were contacted, and one hundred five pairs of companies responded. After deleting five company pairs because of incomplete responses, one hundred five pairs of companies were used for data analysis. The response ratio of the companies used for data analysis is 30% (105/350), which is above the average response ratio in industrial marketing research. As for the characteristics of the respondent companies, the majority of the companies operate service businesses for both buyers (85.4%) and suppliers (81.8%). The majority of buyers (76%) deal with consumer goods, while the majority of suppliers (70%) deal with industrial goods. This may imply that buyers process the incoming material, parts, and components to produce the finished consumer goods. As indicated by their report of the length of acquaintance with their partners, suppliers appear to have longer business relationships than do buyers. Hypothesis 1 tested the effects of buyer-supplier characteristics on trust. The salesperson's professionalism (t=2.070, p<0.05) and authority empowerment (t=2.328, p<0.05) positively affected buyers' trust toward suppliers. On the other hand, authority empowerment (t=2.192, p<0.05) positively affected supplier trust toward buyers. For both buyers and suppliers, the degree of authority empowerment plays a crucial role in the maintenance of their trust in each other. Hypothesis 2 tested the effects of buyerseller relational characteristics on trust. Buyers tend to trust suppliers, as suppliers make every effort to contact buyers (t=2.212, p<0.05). This tendency has also been shown to be much stronger for suppliers (t=2.591, p<0.01). On the other hand suppliers trust buyers because suppliers perceive buyers as being similar to themselves (t=2.702, p<0.01). This finding confirmed the results of Crosby, Evans, and Cowles (1990), which reported that suppliers and buyers build relationships through regular meetings, either for business or personal matters. Hypothesis 3 tested the effects of trust on perceived risk. It has been found that for both suppliers and buyers the lower is the trust, the higher is the perceived risk (t=-6.621, p<0.01 for buyers; t=-2.437, p<0.05). Interestingly, this tendency has been shown to be much stronger for buyers than for suppliers. One possible explanation for this higher level of perceived risk is that buyers normally perceive higher risks than do suppliers in transactions involving business services. For this reason, it is necessary for suppliers to implement risk reduction strategies for buyers. Hypothesis 4 tested the effects of trust on information searching. It has been found that for both suppliers and buyers, contrary to expectation, trust depends on their partner's reputation (t=2.929, p<0.01 for buyers; t=2.711, p<0.05 for suppliers). This finding shows that suppliers with good reputations tend to be trusted. Prior experience did not show any significant relationship with trust for either buyers or suppliers. Hypothesis 5 tested the effects of trust on supplier/buyer selection. Unlike buyers, suppliers tend to trust buyers when they think that previous transactions with buyers were important (t=2.913 p<0.01). However, this study did not show any significant relationship between source loyalty and the trust of buyers in suppliers. Hypothesis 6 tested the effects of trust on relational performances. For buyers and suppliers, financial performance reportedly improved when they trusted their partners (t=2.301, p<0.05 for buyers; t=3.692, p<0.01 for suppliers). It is interesting that this tendency was much stronger for suppliers than it was for buyers. Similarly, competitiveness was reported to improve when buyers and suppliers trusted their partners (t=3.563, p<0.01 for buyers; t=3.042, p<0.01 for suppliers). For suppliers, efficiency and productivity were reportedly improved when they trusted buyers (t=2.673, p<0.01). Other performance indices showed insignificant relationships with trust. The findings of this study have some strategic implications. First and most importantly, trust-based transactions are beneficial for both suppliers and buyers. As verified in the study, financial performance can be improved through efforts to build and maintain mutual trust. Similarly, competitiveness can be increased through the same kinds of effort. Second, trust-based transactions can facilitate the reduction of perceived risks inherent in the purchasing situation. This finding has implications for both suppliers and buyers. It is generally believed that buyers perceive higher risks in a highly involved purchasing situation. To reduce risks, previous studies have recommended that suppliers devise risk-reducing tactics. Moving beyond these recommendations, the present study uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers are also susceptible to perceived risks, especially when they supply services that require very technical and sophisticated manipulations and maintenance. Consequently, buyers and suppliers must solve problems together in close collaboration. Hence, mutual trust plays a crucial role in the problem-solving process. Third, as found in this study, the more authority a salesperson has, the more he or she can be trusted. This finding is very important with regard to tactics. Building trust is a long-term assignment; however, when mutual trust has not been developed, suppliers can overcome the problems they encounter by empowering a salesperson with the authority to make certain decisions. This finding applies to suppliers as well.

• Journal of Intelligence and Information Systems
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• v.23 no.1
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• pp.143-159
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• 2017

Due to the rapid development of IT in recent years, not only personal information but also the key technologies and information leakage that companies have are becoming important issues. For the enterprise, the core technology that the company possesses is a very important part for the survival of the enterprise and for the continuous competitive advantage. Recently, there have been many cases of technical infringement. Technology leaks not only cause tremendous financial losses such as falling stock prices for companies, but they also have a negative impact on corporate reputation and delays in corporate development. In the case of SMEs, where core technology is an important part of the enterprise, compared to large corporations, the preparation for technological leakage can be seen as an indispensable factor in the existence of the enterprise. As the necessity and importance of Information Security Management (ISM) is emerging, it is necessary to check and prepare for the threat of technology infringement early in the enterprise. Nevertheless, previous studies have shown that the majority of policy alternatives are represented by about 90%. As a research method, literature analysis accounted for 76% and empirical and statistical analysis accounted for a relatively low rate of 16%. For this reason, it is necessary to study the management model and prediction model to prevent leakage of technology to meet the characteristics of SMEs. In this study, before analyzing the empirical analysis, we divided the technical characteristics from the technology value perspective and the organizational factor from the technology control point based on many previous researches related to the factors affecting the technology leakage. A total of 12 related variables were selected for the two factors, and the analysis was performed with these variables. In this study, we use three - year data of "Small and Medium Enterprise Technical Statistics Survey" conducted by the Small and Medium Business Administration. Analysis data includes 30 industries based on KSIC-based 2-digit classification, and the number of companies affected by technology leakage is 415 over 3 years. Through this data, we conducted a randomized sampling in the same industry based on the KSIC in the same year, and compared with the companies (n = 415) and the unaffected firms (n = 415) 1:1 Corresponding samples were prepared and analyzed. In this research, we will conduct an empirical analysis to search for factors influencing technology leakage, and propose an early warning system through data mining. Specifically, in this study, based on the questionnaire survey of SMEs conducted by the Small and Medium Business Administration (SME), we classified the factors that affect the technology leakage of SMEs into two factors(Technology Characteristics, Organization Characteristics). And we propose a model that informs the possibility of technical infringement by using Support Vector Machine(SVM) which is one of the various techniques of data mining based on the proven factors through statistical analysis. Unlike previous studies, this study focused on the cases of various industries in many years, and it can be pointed out that the artificial intelligence model was developed through this study. In addition, since the factors are derived empirically according to the actual leakage of SME technology leakage, it will be possible to suggest to policy makers which companies should be managed from the viewpoint of technology protection. Finally, it is expected that the early warning model on the possibility of technology leakage proposed in this study will provide an opportunity to prevent technology Leakage from the viewpoint of enterprise and government in advance.

• KDI Journal of Economic Policy
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• v.14 no.1
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• pp.3-36
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• 1992

"Corporate control by owners" characterizes the current structure of ownership, control and management of big business groups in Korea. It has become an ever more serious obstacle for the Korean economy to end its distinctive "personal capitalism" and to transform the current system into people's capitalism. The current issue, the deconcentration of ownership, through the course of heated debates should be treated from an integrated perspective. That is, the debate should center on the concentration of economic power and it effects on national economy, instead of sticking to the issue of ownership-control issue per se. This paper, by referring to the historical experiences and development paths which advanced countries have already traveled, analyzes the respective aspects of the concentration issue in a rather descriptive and taxonomist manner - market concentration, business diversification, ownership concentration, integrated management of conglomerates, i.e., managing in groups' unit, and the roles of financial institutions. The government policies against the concentration of economic power have so far focused on the size of big business groups and their diversification activities. The two major policy measures are restrictions on cross-ownership and excess capital investment by big business groups, and controls on their credit deals. This paper strongly suggests that the government should change its current priorities in targeting its policies against concentration. The government should reduce the regulations on size and diversification, and focus its policies on substantial dispersion of corporate ownership. The efficacy of government intervention in the management and control of business enterprises seems quite dubious and even anachronistic given the extent of maturity of Korean firms. Therefore, it should be noted that the current regulation-oriented stance taken by the government against the management style of big business groups should be suppressed, as it has assumed some a priori and typical pattern in advance in directing big business groups, such as independent and specialized management in respective firms' unit. This paper, also, raises the need for introducing new regulations on inter-sectoral diversifications between finance, industry and the press.

• Journal of Venture Innovation
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• v.1 no.2
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• pp.13-34
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• 2018

In this case, research has been conducted to verify that the purpose of establishing a reputation for establishing a reputation for identifying brand equity is research and investigation in the context of establishing a reputation for establishing a reputation, and conducting research on CSR activities that are essential to the essential activities of companies. The survey conducted a survey on behalf of the National Center for Adult Women and Girls and Girls ' Generation, using the final round of Section 305 to develop a series of findings, including the analysis of the feasibility analysis, feasibility analysis, reliability, correlation analysis, and factors analysis. A summary of the effects of research on corporate reputation on corporate reputation according to corporate CSR activities is as follows. 1st. Brand equity will have a positive effect on the Company's reputation. The hypothesis had a significant impact on brand recognition, brand loyalty, and perceived quality, but did not have significant impact on the brand image. 2st. Brand equity will have a positive effect on ethical responsibility. The hypothesis had a significant impact on brand recognition, brand loyalty, and perceived quality, but did not have significant impact on the brand image. 3st, the brand equity will have a positive effect on the benefit of the benevolent. The hypothesis had a significant impact on brand recognition, brand loyalty, and perceived quality, but did not have significant impact on the brand image. 4st, The theory that the influence of positive(+) will affect the company's reputation has a significant impact on both ethical and philanthropic factors. 5st. The ethical responsibility was found to have no effect on the usefulness of the brand between brand assets and corporate reputation. 6st. The philanthropic responsibility was partly attributable to the fact that there was a substitution between brand equity and corporate reputation. In sum, the company needs to prioritize its brand recognition before establishing its reputation, and the reason why it should be implemented is that the other elements of the brand equity should be evaluated with the presence of other elements of the brand equity, thereby ensuring continued compliance with continuous CSR activities. As a result, consumers expect to see the performance-based role of the company as a strategic and long-term perspective, as consumers want to see the CSR activity and the corporate reputation in a long-term manner, as opposed to the financial responsibility and legal responsibilities of the past, as opposed to the past.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.8 no.2
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• pp.129-139
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• 2013

This paper is targeted on proposing ameliorating alternative to performance assessment method of GSEM through evaluating the current one, which is initiated by SMBA to induce fair competition among 5 GSEM across the country and accommodate the quality improvement of entrepreneurship education since 2005 after beginning the SMBA support, from the perspective of BSC(Balanced Scorecard) tool. Ultimately, it complements the policy defects of SMBA over GSEM, in particular, in the process of performance assessment and management. This paper carries out two studies as follow. First, throughout reviewing the previous studies relating to BSC applications to non-profit organization, it set out the direction of introducing BSC in assessing performance of GSEM in order to enhance its effectiveness. Second, it evaluate the rationality of performance assessing tools apllied to GSEM by SMBA on the basis of BSC application over non-profit organization, especially in education institution. Research results shows the following implications. First, the current evaluation system over GSEM is just merely assessment itself and not much contributions for the post performance management. Second, The annual evaluation just remains to check up whether the policy goals are met or not. Third, the current evaluation puts much emphasis just on financial inputs and hardware infra, not considering human resources and utilization of government policy and institution. Fourth, the policy goals are unilaterally focused on entrepreneurs. Fifth, the current evaluation systems do not contain any indexes relating to learning and growth perspectives for concerning sustainable and independent growing up. However, lack of empirical testing require this paper to need the further study in the future.

• Journal of Internet Computing and Services
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• v.16 no.6
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• pp.123-131
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• 2015

Recently the development of ICT has a big impact on education field, and diffusion of smart devices has brought new education paradigm. Since people has an opportunity to use various contents anytime and communicate in an interactive way, the method of learning has changing. In 2011, Korean government has established the smart education promotion plan to be a first mover in the paradigm shift from e-learning to smart learning. Especially, government aimed to improve the quality of learning materials and method in public schools, and also to decrease the high expenditure on private education. However, the achievement of smart education policy has not emerged yet, and the refinement of smart learning policy and strategy is essential at this moment. Therefore, the purpose of this study is to propose the successful strategies for smart learning in public education. First, this study explores the status of public education and smart learning environment in Korea. Then, it derives the key success factors through SWOT(Strength, Weakness, Opportunity, Threat) analysis, and suggests strategic priorities through AHP(Analytic Hierarchy Priority) method. The interview and survey were conducted with total 20 teachers, who works in public schools. As a results, focusing on weakness-threat(WT) strategy is the most prior goal for public education, to activate the smart learning. As sub-factors, promoting the education programs for teachers($W_2$), which is still a weakness, appeared as the most important factor to be improved. The second sub-factor with high priority was an efficient optimizing the capability of new learning method($S_4$), which is a strength of systematic public education environment. The third sub-factor with high priority was the extension of limited government support($T_4$), which could be a threat to other public schools with no financial support. In other words, the results implicate that government institution factors should be considered with high priority to make invisible achievement in smart learning. This study is significant as an initial approach with strategic perspective for public education. While the limitation of this study is that survey and interview were conducted with only teachers. Accordingly, the future study needs to be analyzed in effectiveness and feasibility, by considering perspectives from field experts and policy makers.

• 대한공업교육학회지
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• v.45 no.2
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• pp.21-45
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• 2020

The purpose of this study was to verify how the vocational education for training industrial workforce as a national human resource development (NHRD) system has undergone a transition process in relation to the national economic, industrial, and socio-cultural contexts. First, how vocational education as an industrial workforce training system has changed in accordance with Korea's economic environment, industrial development, and social changes; second, what are the main factors that influenced the role and importance of vocational education; and third, vocational education as a system for training industrial workforce and training workforce in science and engineering were analyzed differently from the perspective of the NHRD model. To this end, domestic and international academic journal papers, research reports, and thesis were investigated and classified by period, and major changes in vocational education were analyzed in relation to economic, industrial, and social issues and policies by period. As a result of the research, first, as the industry advanced, the level of vocational education increased and the scope expanded. Second, vocational education tended to shrink gradually after the manufacturing industry base, and especially secondary vocational education tended to decline after the national industry focused on light industry. Third, since the 1970s, the diversification of the NHRD and jobs has resulted in wage gaps depending on the level of education, which has increased the preference for university education and avoided secondary vocational education. In addition, a NHRD model focusing on training science and engineering workforce was proposed to compare the existing NHRD model focusing on overall vocational education, and it was revealed that the NHRD needs to be subdivided into various fields or levels to derive a model and examine changes. From the results of the study, vocational education in Korea, especially in secondary vocational education, has declined due to large impacts on socio-cultural perception due to economic growth, enthusiasm for education, and external shocks such as the financial crisis, and the long-term effort to change this perception is suggested to overcome the crisis of vocational education.

• Journal of Science and Technology Studies
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• v.5 no.1 s.9
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• pp.93-123
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• 2005

This work has following two research goals. First, IVF treatments that have been recently going on in Korea are reexamined from the perspective of women's reproductive rights. Second, the intimate connection between IVF and therapeutic cloning research, in that remnant embryos and eggs that have been secured through IVF treatments have served as a main source of supply for therapeutic cloning research, has been emphasized. The fact that the influencing power of tradition on Korean families and women and IVF techniques eventually joined their hands in support of therapeutic cloning research is noted. Analysis of experiences of infertility by women in the realms of family, medical care during IVF treatment, and therapeutic cloning research that requires continuous supply of eggs leads to following conclusions. First, in the realm of family, infertile women were not only relegated to the status of abnormality but pressured to question their own womanhood. Under this circumstance, IVF treatment helped to reinforce the traditional concept of biological motherhood, thus categorizing married women giving birth to babies and married women who can't or refuses to do so to 'normal ones' and 'abnormal ones' respectively. Second, in the realm of medical care an infertile woman could rediscover her own body during the process of IVF treatment. By going through the processes of hormone treatment, implantation, conception, miscarriage, and so on, she could realize that her own body is understood in diverse ways to her, her family, and the medical profession. Third, in the realm of the state, IVF treatment that was serving as the main supplier of research materials for therapeutic cloning research has been able to avoid controversy in public discourses since the latter has emerged as a signifier of new national economic workhorse for the 21st century. As therapeutic cloning research went into high gear, the status of women as egg providers began to assume a political dimension. Women as egg providers are called upon to take on a paradoxical role as patriotic contributors to national economy on the one hand and as guardians of sacred 'life' on the other hand. The direction and progress of the research will depend on the ways that women comply, compromise, and/or resist the contradiction brought about by being assigned to assume these two identities: the one as a member of the nation requested to serve as a part of national economic development project, even though considered ineligible for financial recompense, and the other one as a guardian of sacred 'life,' even though she have to serve the research that is allowed to create a 'life' to destroy a 'life.'

• Management & Information Systems Review
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• v.33 no.3
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• pp.129-154
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• 2014

We are making products and services that we didn't easily think or even imagine when young and living using them. Consumer needs become more diversified, markets and technologies are being constantly changed, and corporate global competitiveness is getting intensified. Now, companies that don't change nor create new values cannot survive. The cycle of new products is faster, and therefore corporations should improve previous products continuously or create new values according to such a trend. This era requires 'creativity' for companies to overcome uncertainty and survive. Corporate creativity is not easily activated as financial and physical compensation unlike the work ability or performance. When there is an environment that people with various abilities, experiences and backgrounds can express their opinions freely, it becomes possible. Despite the importance, the studies have focused on creativity education so far instead of the viewpoint of corporate business administration. In addition, most studies have dealt with job characteristics and employees' personality factors rather than the process that is connected to actual performance. In other words, the studies on environmental factors that can lead motivation as situational characteristics of the employee's company in a current non-monetary and non-physical way are very insufficient. Therefore, this study aims to comprehensively examine the process of creating creative performance in the environment inside the company that the employee could approach most closely from the corporate deinstitutional perspective. As the major variables, job characteristics and supervisor's ethical leadership were selected, and the process that is connected to the creative performance was explained by means of motivation necessary to understand creativity of the organization and creative process engagement(CPE). The summary of the verification results is following. First, job characteristics and supervisor's attitude(ethical leadership) had positive effects on intrinsic motivation and creativity process engagement. Second, intrinsic motivation and creativity process engagement had positive effects on creative performance. Third, intrinsic motivation and creativity process engagement had mediated the relationship between job characteristics, supervisor's attitude and intrinsic motivation, creativity process engagement

• Asia pacific journal of information systems
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• v.18 no.4
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• pp.57-81
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• 2008

Knowledge is an essential strategic weapon for sustaining competitive advantage and is the key determinant for organizational growth. When knowledge is shared and disseminated throughout the organization, it increases an organization's value by providing the ability to respond to new and unusual situations. The growing importance of knowledge as a critical resource has forced executives to pay attention to their organizational knowledge. Organizations are increasingly undertaking knowledge management initiatives and making significant investments. Knowledge sourcing is considered as the first important step in effective knowledge management. Most firms continue to make an effort to realize the benefits of knowledge management by using various knowledge sources effectively. Appropriate knowledge sourcing strategies enable organizations to create, acquire, and access knowledge in a timely manner by reducing search and transfer costs, which result in better firm performance. In response, the knowledge management literature has devoted substantial attention to the analysis of knowledge sourcing strategies. Many studies have categorized knowledge sourcing strategies into intemal- and external-oriented. Internal-oriented sourcing strategy attempts to increase firm performance by integrating knowledge within the boundary of the firm. On the contrary, external-oriented strategy attempts to bring knowledge in from outside sources via either acquisition or imitation, and then to transfer that knowledge across to the organization. However, the extant literature on knowledge sourcing strategies focuses primarily on large organizations. Although many studies have clearly highlighted major differences between large and small firms and the need to adopt different strategies for different firm sizes, scant attention has been given to analyzing how knowledge sourcing strategies affect firm performance in small firms and what are the differences between small and large firms in the patterns of knowledge sourcing strategies adoption. This study attempts to advance the current literature by examining the impact of knowledge sourcing strategies on small firm performance from a holistic perspective. By drawing on knowledge based theory from organization science and complementarity theory from the economics literature, this paper is motivated by the following questions: (1) what are the adoption patterns of different knowledge sourcing strategies in small firms (i,e., what sourcing strategies should be adopted and which sourcing strategies work well together in small firms)?; and (2) what are the performance implications of these adoption patterns? In order to answer the questions, this study developed three hypotheses. First hypothesis based on knowledge based theory is that internal-oriented knowledge sourcing is positively associated with small firm performance. Second hypothesis developed on the basis of knowledge based theory is that external-oriented knowledge sourcing is positively associated with small firm performance. The third one based on complementarity theory is that pursuing both internal- and external-oriented knowledge sourcing simultaneously is negatively or less positively associated with small firm performance. As a sampling frame, 700 firms were identified from the Annual Corporation Report in Korea. Survey questionnaires were mailed to owners or executives who were most erudite about the firm s knowledge sourcing strategies and performance. A total of 188 companies replied, yielding a response rate of 26.8%. Due to incomplete data, 12 responses were eliminated, leaving 176 responses for the final analysis. Since all independent variables were measured using continuous variables, supermodularity function was used to test the hypotheses based on the cross partial derivative of payoff function. The results indicated no significant impact of internal-oriented sourcing strategies while positive impact of external-oriented sourcing strategy on small firm performance. This intriguing result could be explained on the basis of various resource and capital constraints of small firms. Small firms typically have restricted financial and human resources. They do not have enough assets to always develop knowledge internally. Another possible explanation is competency traps or core rigidities. Building up a knowledge base based on internal knowledge creates core competences, but at the same time, excessive internal focused knowledge exploration leads to behaviors blind to other knowledge. Interestingly, this study found that Internal- and external-oriented knowledge sourcing strategies had a substitutive relationship, which was inconsistent with previous studies that suggested complementary relationship between them. This result might be explained using organizational identification theory. Internal organizational members may perceive external knowledge as a threat, and tend to ignore knowledge from external sources because they prefer to maintain their own knowledge, legitimacy, and homogeneous attitudes. Therefore, integrating knowledge from internal and external sources might not be effective, resulting in failure of improvements of firm performance. Another possible explanation is small firms resource and capital constraints and lack of management expertise and absorptive capacity. Although the integration of different knowledge sources is critical, high levels of knowledge sourcing in many areas are quite expensive and so are often unrealistic for small enterprises. This study provides several implications for research as well as practice. First this study extends the existing knowledge by examining the substitutability (and complementarity) of knowledge sourcing strategies. Most prior studies have tended to investigate the independent effects of these strategies on performance without considering their combined impacts. Furthermore, this study tests complementarity based on the productivity approach that has been considered as a definitive test method for complementarity. Second, this study sheds new light on knowledge management research by identifying the relationship between knowledge sourcing strategies and small firm performance. Most current literature has insisted complementary relationship between knowledge sourcing strategies on the basis of data from large firms. Contrary to the conventional wisdom, this study identifies substitutive relationship between knowledge sourcing strategies using data from small firms. Third, implications for practice highlight that managers of small firms should focus on knowledge sourcing from external-oriented strategies. Moreover, adoption of both sourcing strategies simultaneousiy impedes small firm performance.