ECONOMIC ORGANIZATION - KNOWLEDGE-BASED VIEW

Economic Organization - Knowledge-Based View

Economic Organization - Knowledge-Based View

Introduction

The Knowledge movement is sweeping the field of strategy. The last few years have witnessed increased use of knowledge perspective to research on various topics within the strategy, including alliances (Foss, 2006, 76), the possibility of transmission (Decapolis, 2007, 53) and product development (Cowan, 2007, 1995). Creating a knowledge-based view (KBV) strategy is the basis of this study. This view considers knowledge as the most strategically important resources of the firm (Cook, 2009, 38), and its proponents argue that heterogeneous knowledge bases and capabilities among firms the main determinants of sustained competitive advantage and superior corporate performance (Conner, 2006, 47).

In the Austrian context, that the effect of this focus on knowledge to the field of strategy? The answer is not clear, since the agreement on the nature of organizational knowledge, the specifics of KBV, and whether such a view is the theory of strategy, theory of the firm, or both, have yet to emerge. In addition, empirical research, knowledge-based perspective, associated with the Austrian firm thought is extensive, but there is no common understanding that the study confirms the existing theory (Blackler, 2008, 46) or adds predictive power to other theories of the strategy.

Origins and Development of the Knowledge-Based View

Researchers in the strategy field have traditionally used a concept of knowledge that is grounded in Western epistemology. Knowledge is considered as 'justified true belief' and the focus of theories is on the explicit nature of knowledge (Blackler, 2008, 63). In other words, knowledge is modeled as an unambiguous, reducible and easily transferable construct, while knowing is associated with processing information. This approach to knowledge has given rise to several theories that suggest a machine-like functioning of organizations. For example, scientific management theories posit that the organization of work should be entirely determined by codified knowledge, and that the knowledge of the firm is held by a select number of individuals. Similarly, the information-processing perspective treats organizations as machines that use rules and routines to address the individual information processing requirements caused by interdependent work and environmental uncertainty (Bierly, 2006, 35).

Yet, even as mainstream strategy scholars began emphasizing the implications of tacit vs. explicit knowledge, a more recent epistemo-logy has emerged in the strategy and learning literatures, particularly in Europe (Athanassiou, 2009, 83). The foundations of this approach are deeply rooted in cognitive psychology and sociology. As such, this approach focuses more on the process of knowing than on knowledge as an objective and transferable resource. Knowledge is considered socially constructed and the creation of meaning occurs in ongoing social interactions grounded in working practices (Almeida, 2006, 55) and the specifics of the social and cultural setting (Foss, 2006, 77). Instead of a cognitive representation of reality, knowledge is a creative activity of constructing reality (Decapolis, 2007, 54). Thus, truth should be considered more as a goal of the knowledge creation process than an absolute characteristic of knowledge (Cowan, 2007, 96). With these varying views of knowledge in mind, ...