Though improvisation has emerged as a crucial organizational competence, research wrestles with a key question – how can organizations benefit from improvisation? To advance research, I build a richer conceptualization of the role of knowledge resources – market information sources and memory types – in improvisation. I argue that as (a) internal and external sources of market information differ in speed and novelty and (b) procedural and declarative memory differ in articulation and abstractness, they shape the impact of improvisation on new product outcomes in a distinct way. A longitudinal survey of new products in the Dutch food industry uncovers that, contrary to prior thinking, improvisation increases cost efficiency when new product teams rely on internal market information and declarative memory and they minimize external market information. Though both sources of market information and low procedural memory weaken the negative impact of improvisation on market effectiveness, these conditions were not enough to make its impact positive, echoing traditional concerns with improvisation.
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