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Toward a knowledge‐based theory of the firm

Toward a knowledge‐based theory of the firm 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Toward a knowledge‐based theory of the firm

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Publisher
Wiley
Copyright
Copyright © 1996 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.4250171110
Publisher site
See Article on Publisher Site

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.

Journal

Strategic Management Journal – Wiley

Published: Dec 1, 1996

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