knowledge-based view of the firm

• Kogut, Bruce
• Spender, John-Cristopher
• Grant, Robert
  
• [Nonaka Ikujiro]
  
• Tsoukas, Haridimos

--05.7.31-- Hoopes, Madsen and Walker, 2003, Toward a Theory of Competitive Heterogeneity

The RBV argues that the heterogeneous market positions of close competitors derive from each firm's unique bundle of resources and capabilities (Barney, 1991; Peteraf, 1993; Wernerfelt, 1984). Moreover, to be a source of sustained competitive advantage, resources and capabilities must be:

1. Valuable.  A valuable resource enables a firm to improve its market position relative to competitors.
   
2. Rare. Resources must be available in short supply relative to demand.
3. Isolated from imitation or substitution. To be rare, resources need to be immobile, and costly to imitate or to replicate.

A resource is an observable (but not necessarily tangible) asset that can be valued and traded, such as a brand, a patent, a parcel of land, or a license.

A capability is not observable (and hence necessarily intangible), cannot be valued, and changes hands only as part of its entire unit. A mixture of people and practices continuously enact capabilities (e.g. Wal Mart's docking system). Further, a capability can be valuable on its own or enhance the value of a resource (e.g. Nike's marketing capability). 

The RBV states that a firm's resources can sustain superior performance only if resources and capabilities are inimitable. Three general isolating mechanisms: property rights, learning and development costs, and causal ambiguity. 

--05.7.31-- von Krogh and Grand, 2002, ...Toward a Knowledge-Based Theory of the Firm

Various sources of abnormal returns and rents, including:

• monopoly rents from the product markets
• Ricardian rents resulting from the factor markets
• Schumpeterian rents gained through innovation

(Schmalensee, 1989; Tirole, 1989; cited in von Krogh and Grand, 2002)

Ricardian rents result from differences among firms in therir access to input factors, as well as in their efficient transformation into valuable products and services through procedures internal to the firm. (Montgomery, 1995; Winter, 1995; cited in von Krogh and Grand, 2002).

Schumpeterian rents result from differences in the ability of companies to create first-mover advantages by proactive innovation (Lieberman and Montgomery, 1998;cited in von Krogh and Grand, 2002).

--05.7.29--

knowledge-based view: define the boundaries of the firm

markets vs. hierarchies (vs. communities)

Manager's fundamental problem: to sustain above-normal profits by continually discovering new knowledge or new combinations of existing knowledge.

knowledge problems: own or acquire? protect? 

--Zack, 2002, A Strategic Pretext for Knowledge Management--

Resource-based view (RBV). A firm should compete based on their unique, valuable and inimitable resources and capabilities rather than the products and services derived from those resources and capabilities (market-based view). Leveraging resources and capabilities across many markets and products, rather than targeting specific products for specific markets, becomes the strategic driver. Therefore, a resource-based strategy provides a more long-term view than the traditional approach (Prahalad and Hamel, 1990; Grant, 1991).

Knowledge-based view (KBV). The RBV suggests that having unique access to valuable resources is one way to create competitive advantage. The KBV argues that knowledge is the most unique and inimitable resource, allowing a firm to combine and coordinate traditional resources available to all in new and distinctive ways, providing more value for their customers than can their competitors (Kogut and Zander, 1992; Spender, 1994; Nonaka, 1994; Grant, 1996; Teece, Pisano and Shuen, 1997).

Knowledge can be considered the most important strategic resource, and the ability to acquire, integrate, store, share and apply it the most important capability for building and sustaining competitive advantage (Kogut & Zander, 1992).

Companies having superior knowledge are able to coordinate and combine their traditional resources and capabilities in new and distinctive ways, providing more value for their customers than can their competitors, even if those resources are not unique (Teece, Pisano & Shuen, 1997).