Caught between the users and the firm: How does identity conflict affect employees' innovative behavior

Absorbing external knowledge is crucial for innovation within the organization. One way of tapping external knowledge sources is to rely on employees who reach out across the firm's boundary to external stakeholders and address knowledge sets located beyond the organizational boundary. However, such employees are likely to identify with the stakeholders they reach out to which exposes them to potentially conflicting demands—with positive or negative effects for their employing organization. We investigate whether and how their dual identification with the organization and with users, and the potential identity conflicts this engenders, affects their job satisfaction and innovativeness. We study a sample of 243 employees in two industries, revealing that perceived conflict between organizational identification and user identification detracts from job satisfaction if and only if employees are strongly identified with both targets. We find also that identity conflict is indirectly and negatively related to innovative work behavior through job satisfaction. Our paper contributes to the literature on the benefits and risks of employee ties to external stakeholders. We contribute also to research on embedded users by elucidating under what conditions they are most valuable to their employing organizations.