Insufficient consideration of the completeness of knowledge management models has been exposed and the author attempts to address this concern for the first time. This article investigates the crossover potential of scholarly research and how it can be applied in the organizational boardroom.
Strategic Management and the Knowledge-based View
Although the knowledge-based view emerged in the field of strategy, its origins and foundations stem from the resource-based view of the firm. The resource-based view highlights the role of organizational resources in achieving a higher degree of competitiveness. When executives embrace the resource-based view, organizational resources are crucial for competitiveness if they are valuable, rare, inimitable and non-substitutable. However, internal resources of companies manifest themselves in tangible (such as physical properties and machinery) and intangible (such as intellectual capital) forms. Intangible resources, in form of intellectual capital, exist primarily as knowledge in human resources and cannot be easily imitated. This, by far, is why some organizations are successful and some are not. The reason for success and failure of organizations, based on this resource-based view is that there are two capabilities – causal ambiguity and social complexity. Operational risk of large organizations is at risk if they can be easily imitated by the competition. Therefore, decreasing the imitability of an organization’s products or services also decreases the operational risk. While causal ambiguity refers to multiple interpretations of knowledge, social complexity has been regarded as “the extent to which resources are embedded in multiple organizational members and the relationships among them”.1 Thus, harder to copy or imitate.
Executives know that discontinuity exists at all levels of product and services and they do not want to find themselves caught off guard and become obsolete. To remain competitive, executives realise that they have to quickly create and share new ideas and knowledge to be more responsive to market changes. Organizations are “social communities that specialise in the creation and internal transfer of knowledge”.2 Importantly, knowledge held by organizational members is the most strategic resource for competitive advantage, and also through the way it is managed by executives.
About the Author
Mostafa Sayyadi, CAHRI, AFAIM, CPMgr, works with senior business leaders to effectively develop innovation in companies, and helps companies – from start-ups to the Fortune 100 – succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to HR.com and Consulting Magazine and his work has been featured in these top-flight business publications.
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