The knowledge-based view of the firm: Implications for management practice

W HAT IS DIFFERENT ABOUT MANAGING THE ‘postindustrial’ enterprise in a ‘knowledge-based economy’? A stream of recent management books1-5 outline some of the implications of knowledge-based work and knowledge-based competition for the business manager. These books are one outcome of a surge of recent research into the role of knowledge within the firm and the consequences for management theory. This emerging area of theory and practice has become identified as the ‘knowledge-based view of the firm’, a feature of which is its ability to transcend the division between academe and management practice. On the academic side, the knowledge-based view represents a confluence of a number of streams of research, the most prominent being ‘resource-based theory’ and ‘epistemology’ (the work of Michael Polanyi exerting a particular influence). Contributing literatures include ‘organizational learning’ (e.g. James March and Chris Argyris); ‘evolutionary economics’ (notably Nelson and Winter); ‘organizational capabilities’ and ‘competences’ (Prahalad and Hamel); and ‘innovation and new product development’ (e.g. David Teece, Kim Clark, Steven Wheelwright and Rebecca Henderson). Pioneers of the emerging knowledge-based view include Bruce Kogut and Udo Zander, Ikujiro Nonaka, Gunnar Hedlund, Georg Von Krogh and Johann Roos and J.-C. Spender. Among practitioners, companies are looking beyond technology and information systems towards a broader conception of knowledge management. A first requirement is to identify the knowledge available within the organization. ‘Knowledge audits’ seek to establish an inventory of proprietary technology and know-how in the same way that accounting systems identify and value a firm’s tangible assets. Formal systems for deploying knowledge have focused