In order to grow, the pharmaceutical sector has had to heavily rely on both formal and informal innovation networks. However, many analysts consider that the industry has not achieved its growth potential and suggest that this is in part due to the inherent organisational barriers to knowledge transfer that exist in the pharmaceutical sector. This thesis provides a critical review of the knowledge transfer literature; with particular reference to absorptive capacity, social capital and external knowledge transfer meta-routines. The study takes a pragmatic critical realist approach, using a two stage critical incident technique to elucidate the micro-foundations of problem solving routines as a proxy for knowledge transfer. Thematic analysis on the resulting narratives identifies routinized patterns of information seeking behaviour, reveals the micro-foundations of template use and provides insights into how scientists recognise value in the knowledge that they find. The study answers calls to research the role of the individual in organisational routines; to uncover the micro-foundations of external absorptive capacity and to determine how value is recognised in new knowledge. A model is proposed that suggests that recognising the value of new knowledge is a construct that is influenced by factors which affect the perceived information quality, the relative subjectivity of the solution and the source’s social-identity. The value of knowledge is also further corroborated with the support of other materials or through a wider stakeholder involvement. The study has adopted a ‘strategy-as-practice’ approach and contributes to organisational practice by examining how informal external knowledge transfer through problem solving in a biopharmaceutical organisation is accomplished. These insights enable the author to suggest a number of managerial strategies by which pharmaceutical managers might recognise, optimise and facilitate the use of informal networks; whilst protecting their intellectual property and maintaining the potential for innovation.