Knowledge that Transforms

Abstract Knowledge is too problematic a concept to make the task of building a dynamic knowledge‐based theory of the firm easy. We must also distinguish the theory from the resource‐based and evolutionary views. The paper begins with a multitype epistemology which admits both the pre‐ and subconscious modes of human knowing and, reframing the concept of the cognizing individual, the collective knowledge of social groups. While both Nelson and Winter, and Nonaka and Takeuchi, successfully sketch theories of the dynamic interactions of these types of organizational knowledge, neither indicates how they are to be contained. Callon and Latour suggest knowledge itself is dynamic and contained within actor networks, so moving us from knowledge as a resource toward knowledge as a process. To simplify this approach, we revisit sociotechnical systems theory, adopt three heuristics from the social constructionist literature, and make a distinction between the systemic and component attributes of the actor network. The result is a very different mode of theorizing, less an objective statement about the nature of firms ‘out there’ than a tool to help managers discover their place in the firm as a dynamic knowledge‐based activity system.

Abstract Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision‐making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge‐based approach sheds new light upon current organizational innovations and trends and has far‐reaching implications for management practice.

Abstract The ability to transfer best practices internally is critical to a firm's ability to build competitive advantage through the appropriation of rents from scarce internal knowledge. Just as a firm's distinctive competencies might be difficult for other firms to imitate, its best practices could be difficult to imitate internally. Yet, little systematic attention has been paid to such internal stickiness. The author analyzes internal stickiness of knowledge transfer and tests the resulting model using canonical correlation analysis of a data set consisting of 271 observations of 122 best‐practice transfers in eight companies. Contrary to conventional wisdom that blames primarily motivational factors, the study findings show the major barriers to internal knowledge transfer to be knowledge‐related factors such as the recipient's lack of absorptive capacity, causal ambiguity, and an arduous relationship between the source and the recipient.

Abstract This paper examines interfirm knowledge transfers within strategic alliances. Using a new measure of changes in alliance partners' technological capabilities, based on the citation patterns of their patent portfolios, we analyze changes in the extent to which partner firms' technological resources ‘overlap’ as a result of alliance participation. This measure allows us to test hypotheses from the literature on interfirm knowledge transfer in alliances, with interesting results: we find support for some elements of this ‘received wisdom’—equity arrangements promote greater knowledge transfer, and ‘absorptive capacity’ helps explain the extent of technological capability transfer, at least in some alliances. But the results also suggest limits to the ‘capabilities acquisition’ view of strategic alliances. Consistent with the argument that alliance activity can promote increased specialization, we find that the capabilities of partner firms become more divergent in a substantial subset of alliances.

Abstract This paper investigates interrelationships of product design, organization design, processes for learning and managing knowledge, and competitive strategy. This paper uses the principles of nearly decomposable systems to investigate the ability of standardized interfaces between components in a product design to embed coordination of product development processes. Embedded coordination creates ‘hierarchical coordination’ without the need to continually exercise authority—enabling effective coordination of processes without the tight coupling of organizational structures. We develop concepts of modularity in product and organization designs based on standardized component and organization interfaces. Modular product architectures create information structures that provide the ‘glue’ that holds together the loosely coupled parts of a modular organization design. By facilitating loose coupling, modularity can also reduce the cost and difficulty of adaptive coordination, thereby increasing the strategic flexibility of firms to respond to environmental change. Modularity in product and organization designs therefore enables a new strategic approach to the management of knowledge based on an intentional, carefully managed loose coupling of a firm's learning processes at architectural and component levels of product creation processes.