The Effect of a System for Sharing Best Practices Within Pre-Existing Peer Networks

Peer networks, such as enterprise social networks (ESNs), can facilitate knowledge transfer across employees. However, such systems can also lead to information overload or difficulty in finding useful information. We examine data from a natural field experiment where a retailer introduced a system for sharing best practices (SSBP) in an existing online peer network, a control mechanism that enables easy access to well-organized best practices from high-performing units. The SSBP did not have a significant immediate or average effect on sales, however it significantly increased the sales trends of the stores where it was implemented. Sales improvement was greatest in stores that (a) perceived higher information overload from the online peer network before the intervention, or (b) had lower exposure to offline peers. The SSBP led to an increase, rather than decrease, of voluntary interstore knowledge sharing in the online peer network. These findings shed light on how a formal mechanism for sharing best practices can enhance the decision-facilitating role of relevant information without discouraging spontaneous knowledge sharing within the existing peer networks.

This paper was accepted by Ranjani Krishnan, accounting.

Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.00990.