Knowledge-based theory of the firm

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Knowledge-based theory of the firm



Alternate name(s)

Knowledge-based view of the firm, knowledge-based perspective of the firm

Main dependent construct(s)/factor(s)

Competitive advantage, firm performance

Main independent construct(s)/factor(s)

Heterogeneous knowledge bases and capabilities

Concise description of theory

The knowledge-based theory of the firm considers knowledge as the most strategically significant resource of the firm. Its proponents argue that because knowledge-based resources are usually difficult to imitate and socially complex, heterogeneous knowledge bases and capabilities among firms are the major determinants of sustained competitive advantage and superior corporate performance.

This knowledge is embedded and carried through multiple entities including organizational culture and identity, policies, routines, documents, systems, and employees. Originating from the strategic management literature, this perspective builds upon and extends the resource-based view of the firm (RBV) initially promoted by Penrose (1959) and later expanded by others (Wernerfelt 1984, Barney 1991, Conner 1991).

Although the resource-based view of the firm recognizes the important role of knowledge in firms that achieve a competitive advantage, proponents of the knowledge-based view argue that the resource-based perspective does not go far enough. Specifically, the RBV treats knowledge as a generic resource, rather than having special characteristics. It therefore does not distinguish between different types of knowledge-based capabilities. Information technologies can play an important role in the knowledge-based view of the firm in that information systems can be used to synthesize, enhance, and expedite large-scale intra- and inter-firm knowledge management (Alavi and Leidner 2001).

Diagram/schematic of theory


Originating author(s)

Jay Barney, Robert Grant, Bruce Kogut, Udo Zander, Ikujiro Nonaka

Seminal articles

Conner, K.R. “A Historical Comparison of the Resource-Based Theory and Five Schools of Thought Within Industrial Organization Economics: Do We Have a New Theory of the Firm?,” Journal of Management (17:1), 1991, pp. 121-154.

Grant, R.M. “Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), Winter Special Issue, 1996, pp. 109-122.

Grant, R.M. “Prospering in Dynamically-Competitive Environments: Organizational Capability as Knowledge Integration,” Organization Science (7:4), 1996, pp. 375-387.

Kogut, B., and Zander, U. “Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology,” Organization Science (3:3), 1992, pp. 383-397.

Kogut, B. “The Network as Knowledge: Generative Rules and the Emergence of Structure,” Strategic Management Journal (21), 2000, pp. 405-425.

Nonaka, I., and Takeuchi, H. The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation, Oxford University Press, New York, 1995.

Spender, J.C. “Making Knowledge the Basis of a Dynamic Theory of the Firm,” Strategic Management Journal (17), Special Issues, 1996, pp. 45-62.

Originating area

Strategic management

Level of analysis


IS articles that use the theory

Alavi, M., and Leidner, D.E. “Review: Knowledge Management and Knowledge Management Systems,” MIS Quarterly (25:1), March 2001, pp. 107-136.

Hüseyin, T. “Information Technology Relatedness, Knowledge Management Capability, and Performance of Multibusiness Firms,” MIS Quarterly (29:2), June 2005, pp. 311-335.

Malhotra, Y. and Galletta, D., "Role of Commitment and Motivation in Knowledge Management Systems Implementation: Theory, Conceptualization, and Measurement of Antecedents of Success", Proceedings of 36th Annual Hawaii International Conference on Systems Sciences, January 6-9, 2003, IEEE, Pages 1-10.

Massey, A.P., and Montoya-Weiss, M.M. “Unraveling the Temporal Fabric of Knowledge Conversion: A Model of Media Selection and Use,” MIS Quarterly (30:1), March 2006, pp. 99-114.

Pavlou, P.A., Housel, T.J., Rodgers, W., and Jansen, E. “Measuring the Return on Information Technology: A Knowledge-Based Approach for Revenue Allocation at the Process and Firm Level,” Journal of the AIS (6:7), 2005, pp. 199-226.

Teigland, R., and Wasko, M. "Integrating Knowledge Through Information Trading: Examining the Relationship Between Boundary Spanning Communication and Individual Performance," Decision Sciences (34:2), Spring 2003, pp 261-287

Links from this theory to other theories

Resource-based view of the firm, Resource dependency theory,Dynamic capabilities, Competitive strategy (Porter), Evolutionary theory, Organizational knowledge creation

External links, Summary of Grant's 1996 SMJ paper

Original Contributor(s)

Dany Di Tullio

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