Inter-organizational Cooperation and Environmental Change: Moderating Effects between Flexibility and Innovation Performance Angel Martı´nez-Sa´nchez, M. Jose´ Vela-Jime´nez, 1 Manuela Pe´rez-Pe´rez and Pilar de-Luis-Carnicer Departamento de Economı´a y Direccio´n de Empresas, Centro Polite´cnico Superior, Marı´a de Luna 3, Zaragoza 50018, Spain, and 1 Departamento de Economı´a y Direccio´n de Empresas, Escuela de Estudios Empresariales, Marı´a de Luna 5, Zaragoza 50018, Spain Corresponding author email: anmarzan@unizar.es The paper investigates the moderator effect of inter-organizational cooperation in the relationship between workplace flexibility and innovation performance. This research question is important because innovation is dependent on the strategic integration of technological knowledge, requiring organizations to acquire new capabilities rapidly or to ensure the presence of knowledge that may be beyond existing internal capabilities. Inter-organizational cooperation constitutes a relevant mechanism for a firm to increase its knowledge base concerning new products and processes. High-cooperation firms may have more opportunities to take advantage of flexibility for innovation performance because it facilitates the access and dispersion of knowledge within the firm. We test the research hypotheses in a sample of manufacturing and service firms. The results contribute to the literature on flexibility and innovation because they demonstrate that inter-organizational cooperation moderates the relationship between flexibility and innovation performance. We discuss the implications of these results for future research and managerial practice. Introduction The study of flexibility and innovation is important because innovation depends on the strategic integration of knowledge (technological knowledge, market knowledge etc.), requiring organizations to acquire new capabilities rapidly or to ensure the presence of knowledge that may be beyond existing internal capabilities. Flexibil- ity may influence innovation performance in several ways. For instance, flexible employment contracts may influence the employees’ organiza- tional commitment to contribute discretionary effort and to carry the risks involved in innova- tions (Storey et al., 2002). Similarly, the flexibility of new product development where multifunc- tional teams from several departments and firms cooperate to accelerate the process of new product development enables a company to introduce more products and faster than compe- titors (Koste and Malhotra, 2000; Malhotra, Grover and Desilvio, 1996; Tatikonda and Rosenthal, 2000). We are grateful for the financial support of the Spanish Ministry of Science and Education (Grant SEJ2007- 62964/ECON) and the comments and suggestions made by four anonymous reviewers. British Journal of Management, Vol. 20, 537–561 (2009) DOI: 10.1111/j.1467-8551.2008.00605.x r 2008 British Academy of Management. Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.