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Journal of Knowledge ManagementEmerald Article: A resource-based view of organizational knowledge management systemsPeter Meso, Robert Smith
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To cite this document: Peter Meso, Robert Smith, (2000),"A resource-based view of organizational knowledge management systems", Journal of Knowledge Management, Vol. 4 Iss: 3 pp. 224 - 234
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A resource-based viewof organizationalknowledge managementsystems
Peter Meso and
Robert Smith
Introduction
The resource-based view (RBV) of the firm
defines a strategic asset as one that is rare,
valuable, imperfectly imitable and non-
substitutable. An asset should meet all
conditions concurrently to qualify as a strategic
asset (Peteraf, 1993; Michalisn et al., 1997;
Wernerfelt, 1984). With the advent of
knowledge management (KM), intellectual
capital is gaining increasing recognition as the
only true strategic asset (Hamel, 1998). This
has led to a proliferation of organizational
knowledge management systems (OKMS), for
managing intellectual capital. However,
according to the resource-based view, tangible
assets are not strategic because they can be
acquired or imitated. Thus this paper addresses
the question: `̀ Are OKMS strategic assets
within the context of the resource-based view?''
The answer to this question is pertinent in
enabling the firm to determine whether it is
strategically wise to capture and share its
knowledge via an OKMS. Should it be that an
OKMS eliminates the intangibility of tacit
knowledge, it may not be strategically wise to
invest the firm's knowledge in an OKMS.
Doing so would render the otherwise strategic
asset non-strategic, easily acquired or
replicated by competitors, and hence dilute
the sustainable competitive advantage of the
firm. Alternatively, should it be that an
OKMS enables a firm to leverage the strategic
value of its knowledge, it would be advisable
to invest the firm's knowledge in such an
OKMS (Peteraf, 1993; Michalisn et al., 1997;
Wernerfelt, 1984).
The first part of the paper defines strategic
assets, while the second part reviews KM.
The third part defines OKMS, presenting the
common views of such systems and analyzing
how each view influences the strategic value
of the OKMS.
Strategic assets
The resource-based view holds that the
resources a firm holds can determine the
firm's sustainable success in a given market. It
specifies that there are two types of assets,
strategic and non-strategic. Non-strategic
assets do not contribute to the long-term
success of the firm. Sustainable competitive
success results only from strategic assets
(Figure 1). Four conditions jointly define the
The authors
Peter Meso and Robert Smith are both Professors in the
Department of Management and Information Systems,
Kent State University, Kent, Ohio, USA.
Keywords
Knowledge management,
Knowledge management systems, Explicit knowledge,
Tacit knowledge, Competitive advantage,
Organizational learning
Abstract
With the advent of knowledge management, intellectual
capital is gaining increasing recognition as the only true
strategic asset. This has led to a proliferation of
organizational knowledge management systems (OKMS),
for managing intellectual capital. This article addresses
the question: `̀ Are OKMS strategic assets within the
context of the resource-based view?'' Two views of OKMS
emerge ± the technical and the socio-technical view. An
analysis of OKMS from each perspective is presented and
their resultant implications on the competitive position of
the firm explained. The findings indicate that, for a firm to
reap long-term strategic benefit from OKMS, it should
adapt the broader socio-technical view when developing,
implementing and managing its OKMS. This suggests that
firms need to consider not only the technology but also
the organizational infrastructure, the organizational
culture and the people who form the OKMS, and the
knowledge that is to be processed by these OKMS.
Electronic access
The current issue and full text archive of this journal is
available at
http://www.emerald-library.com
224
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . pp. 224±234
# MCB University Press . ISSN 1367-3270
characteristics of a strategic asset ± valuable,
rare, imperfectly imitable, and non-
substitutable. A resource is valuable if it
allows the firm to exploit the opportunities in
the market or thwart competitive threats. If it
is owned by a very small number of all the
firms in the industry, then it is rare. It is
imperfectly imitable if it can be sustained for
long periods of time without competitors
replicating or acquiring it. Finally, it is non-
substitutable if it has no strategic equivalents.
Because all tangible assets can either be
imitated or acquired, they are not strategic.
Therefore, a further quality for strategic assets
is that they are intangible. The resource-based
view also operates under two assumptions:
that ex-ante conditions to competition exist
and that the ex-post conditions to competition
can be maintained (Wernerfelt, 1984;
Michalisn et al., 1997; Peteraf, 1993).
Knowledge management
KM is the process of capturing the collective
expertise and intelligence in an organization
and using them to foster innovation through
continued organizational learning (Nonaka,
1991; Quinn et al., 1996; Davenport et al.,
1998). According to Nonaka, two types of
knowledge reside in any organization ± tacit
and explicit knowledge. Tacit knowledge
consists of mental models, beliefs and
persuasions of each individual employee that
are so ingrained as to be taken for granted. It
resides within the individual and is difficult to
express in words. Every employee has a
wealth of tacit knowledge deeply rooted in
his/her actions, and his/her commitment to `̀ a
particular craft or profession, a particular
technology, a product market, or the activities
of a work group or team'' (Nonaka, 1991). In
most organizations, tacit knowledge is rarely
shared or communicated. Therefore, it is
often lost when the individual possessing it
leaves the organization. Tacit knowledge can
also be seen as that knowledge which resides
in the culture of the organization (Figure 2).
An example is self-motivated creativity, which
refers to the will, motivation, and adaptability
for success exhibited by employees working
within certain corporate cultures. It is difficult
to identify the precise cause of care-why. But
literature on KM acknowledges that high
levels of care-why significantly enhance the
overall performance of the firm (Davenport et
al., 1998). Other examples include
organizational tacit knowledge, which
comprises such knowledge as causal
ambiguity ± the inexplicable chemistry of
resources that provides sustainable
competitive advantage to a firm (Michalisn et
al., 1997), and cultural tacit, which is the
inexplicable knowledge resident in the
corporate culture (Michalisn et al., 1997).
Explicit knowledge is knowledge that can be
codified. Because it is easily shared and
communicated, most organizations have
Figure 1 Relationship of strategic assets to sustainable competitive advantage
225
View of organizational knowledge management systems
Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
captured this knowledge in ordered
repositories, systems, or operating
technologies of the firm, thus making it
available to all the members of the
organizations. There are three types of
explicit knowledge resident in any
organization ± cognitive knowledge, advanced
systems skills, and systems understanding
(Figure 2). Cognitive knowledge, also termed
`̀ know-what'', is the `̀ basic mastery of a
discipline that professionals achieve through
extensive training and certification'' (Quinn et
al., 1996). Advanced skills or `̀ know-how''
refer to the `̀ ability to apply rules of a
discipline to complex real-world problems''
(Quinn et al., 1996). Systems understanding,
also termed `̀ know-why'' is the deep
understanding of the web of cause-and-effect
relationships underlying a discipline (Quinn et
al., 1996; Nonaka, 1991).
Organizational learning is the process of
continued innovation through the creation of
new knowledge (Quinn et al., 1996; Nonaka,
1991). It is an ongoing process that takes
place as employees engage in knowledge work
(Davenport et al., 1998). Nonaka (1991)
states that organizational learning emanates
from the iterative process of articulation and
internalization. Articulation occurs when an
employee's tacit knowledge is captured as
explicit knowledge and internalization occurs
when this captured explicit knowledge is then
transformed into another employee's tacit
knowledge. Therefore, organizational
learning occurs at the intersection of tacit and
explicit knowledge during the interaction of
the various employees, departments or teams
in a firm (Nonaka, 1991).
Sustainable competitive advantage results
from innovation. Innovation in turn results
from the creation of new knowledge. New
knowledge is created in the process of
organizational learning. Therefore, KM can
be viewed as the creation of sustainable
competitive advantage through continued
organizational learning (Figure 3). Since the
`̀ value of the intellect increases markedly as
one moves up the intellectual scale from
cognitive knowledge through advanced skills
and systems thinking to self-motivated
creativity'', enhancing intellectual capital
within the firm assures the sustainable
competitive advantage of the firm (Nonaka,
1991; Quinn et al., 1996; Hamel, 1998).
The major goal of KM is to enhance
innovation. In a bid to achieve this goal and to
maximize the benefits that can be derived from
effective KM, many firms are investing heavily
in the development of OKMS aimed at
supporting knowledge work and enhancing
organizational learning (Davenport et al., 1998).
However, there are differences in what firms
perceive an OKMS to be. Such differences have
resulted in two common perceptions of OKMS:
the technical perception; and the socio-technical
perception. Each perception is examined in the
next section. The implications of each
perception on the approaches used to develop
OKMS, and the resultant impact on the
sustainable competitive positions of the firms are
also examined.
Organizational knowledge managementsystems
From the perspective of knowledge work, an
OKMS is a system that provides for the
creation of new knowledge, the assembly of
externally created knowledge, the use of
existing knowledge, and the finding of
knowledge from internal and external sources.
Nonaka's spiral of knowledge creation leads
to the definition of an OKMS as that which
Figure 2 The knowledge matrix
226
View of organizational knowledge management systems
Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
supports organizational learning by enhancing
the exchange and sharing of tacit and explicit
knowledge (Figure 3). Taking Quinn et al.'s
(1996) definition of intellectual capital, an
OKMS can be seen as that which organizes a
firm's know-what, know-how, and know-why
into explicit knowledge resident in the firm's
databases and operating technologies
(Nonaka, 1991; Quinn et al., 1996;
Davenport et al., 1998; Sviokla, 1996). The
advent of KM has resulted in two
predominant perspectives of what constitutes
an OKMS ± the technical perspective and the
socio-technical perspective. Following are
descriptions and analyses of each.
The technical perspective
This perspective holds that an OKMS is an
advanced assembly of software, and its
associated hardware infrastructure, for
supporting knowledge work and/or
organizational learning through the free
access to and increased sharing of knowledge
(Figure 4). The technology-centered OKMS
in use today are employing one technology or
a combination of ten key technologies: group-
ware, messaging, Web browsers, document
management, search and retrieval, data
mining, visualization, push technology, group
decision support, and intelligent agents. Of
these group-ware and Web browser
technologies are the most prominent
(Hibbard, 1997; Chaffey, 1998).
Group-ware software packages are
advanced decision support systems developed
to enhance collaborative group work, between
geographically dispersed professionals.
Examples of group-ware software products
being marketed as OKMS are Lotus Notes,
Network Delivery Knowledge, and Fulcrum
Knowledge Network. Lotus Notes is the most
widely used. Lotus Notes is a document
database that enables the communication
between colleagues, the collaboration among
teams, and the co-ordination of strategic
business processes within an organization. It
can contain both structured and unstructured
content, thereby surpassing limitations that
relational databases impose on the
organization. Notes uses replication
technology to allow users in diverse locations
to access the same knowledge. It supports
e-mail, pull and push technologies, and work
flow automation. The software also provides
up to four levels of security: authentication,
access control, field-level privacy, and digital
signatures (IBM, 1998; Kurchak Associates,
1998; Fulcrum, 1998; Hibbard, 1997).
Group-ware technologies, including Lotus
Notes are developed by independent software
houses and sold to any willing buyer.
Therefore, they are easily acquired. The
security features found in any group-ware
system do not prevent the imitability of the
knowledge resident in the system. Lotus
Notes, for example, employs RSA public key
encryption technology ± the de facto industry
standard ± to secure the knowledge resident in
its knowledge bases (IBM, 1998). However,
because this security standard is also used by
other organizations in the industry, it is not
proprietary. Mechanisms employed by
Figure 3 How knowledge relates to organizational learning and sustainable competitive advantage
227
View of organizational knowledge management systems
Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
corporate intelligence agents, industrial
espionage experts, and computer hackers may
enable unauthorized users to circumvent the
security controls and access strategic
corporate knowledge (Crock et al., 1996)
resident in the group-ware's knowledge bases.
Therefore, when viewed solely from a
technological perspective, group-ware
technologies do not satisfy the requirements
of a strategic asset. The strategic value of
group-ware does not result from the quality of
technology used to develop these systems.
Web-based technologies entail employing a
Web browser to access knowledge resources
on the Internet or on intranets that link
geographically dispersed professionals. These
technologies are popular with most
organizations for several reasons. First, they
allow for the in-house development of KM
systems, hence building some proprietary
characteristics into the system. Second, they
allow for the development of a naturally
expanding, flexible and easy to use KM
system. This encourages employees to take
advantage of the system. Third, because it is
very simple to develop Web pages, the
employees themselves do most of the
development of the OKMS. This not only
minimizes the cost of developing the OKMS,
it also enhances employee participation and
commitment to the system. Finally, Web
technologies adapt the natural way of
communication between individuals. They
surpass organizational hierarchies, formal
communication policies, physical barriers,
and social groupings to make available to
everyone knowledge articulated by any other
professional. However, these technologies do
not provide for the development of well-
structured KM systems. Web-based KM
systems are thus difficult to manage, maintain
and evaluate. Such systems do not allow the
organization to keep an accurate inventory of
the intellectual capital it possesses and what
the true value of these assets is (Hibbard,
1997; IBM, 1998; Musciano and Kennedy,
1996).
From a resource-based view, Web
technologies may provide limited strategic
advantages. For example, Web browsers are
not rare ± they are easily acquired. The Web
pages developed by these browsers are easily
imitated. Further, Web-based systems have
substitutes in group-ware, messaging,
document management, push technologies,
intelligent agents, search and retrieval, and
data mining technologies. The strategic value
of Web-based KM systems is thus greatly
diluted. Therefore, taken on their own,
Figure 4 The technical perspective of a knowledge management system
228
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Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
Web-based technologies do not constitute
strategic assets.
Socio-technical perspective
The socio-technical perspective recognizes
that there is more to OKMS than mere
technology. Under this perspective, OKMS
are seen as being complex combinations of
technology infrastructure, organizational
infrastructure, corporate culture, knowledge,
and people (Figure 5). Carayanis (1998)
concurs with this by stating that:
While information technology can be considered
as a value-adding technological infrastructure,
knowledge management can be viewed as a
socio-technical system of tacit and explicit
business policies and practices. These are
enabled by the strategic integration of
information technology tools, business
processes, and intellectual, human, and social
capital.
Technology infrastructure comprises the
hardware, software, middle-ware and
protocols that allow for the encoding and
electronic exchange of knowledge. Three
types of technology infrastructure are found
in an OKMS: knowledge oriented
technologies, function oriented technologies,
Figure 5 Organizational knowledge infrastructure and its relation to sustainable competitive advantage
229
View of organizational knowledge management systems
Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
and specialty oriented technologies.
Knowledge oriented technologies such as
group-ware and Web browsers directly
process knowledge work and the sharing of
knowledge within the organization. Function
oriented technologies such as office
automation, robotics and desk-top computing
technologies support operational level
activities such as data processing, production,
and service delivery while collecting the data
that eventually get refined into information
and further into knowledge for use in
organizational learning. Specialty oriented
technologies support highly specialized
functions within the firm. Usually these are
those functions that require high levels of
know-how. Examples of these technologies
include computer-aided design and
manufacture (CAD/CAM) software, and
expert systems software (Davenport et al.,
1998; Hibbard, 1997).
All the technology infrastructure used in
OKMS (including software) is tangible.
Because this technology infrastructure is
largely software-dependent, it is easily
replicated, copied, pirated, reverse-
engineered or cloned, even when protected by
regulatory assets such as copyrights, patents
and licenses. The hardware infrastructure
found in OKMS is largely standard and thus
easily imitated. Therefore, the technology
component of the OKMS is not a strategic
asset (Michalisn et al., 1997; Wernerfelt,
1984; Long, 1994).
The Ford Motor Company is a clear
example of a firm that is re-inventing its
corporate architecture by investing heavily in
technologies for KM systems. It is using KM
systems to redefine the auto manufacturing
industry, gain a competitive stronghold in
emergent electronic markets, and get closer to
its customers. The firm has established the
autoxchange mart ± an information
technology-intensive KM and electronic
commerce system intended to shift the car-
manufacturing model from the conventional
`̀ push'' business model to the emergent
`̀ pull'' model. In the `̀ pull'' model, the
consumer determines the precise
configuration of the car before it is
manufactured. Thus, consumers get highly
customized products while the firm saves
substantial amounts of capital that would
otherwise be tied up in large inventories of
finished products. Further, auto designers,
financiers, marketers, and production
engineers are able to gain insightful
knowledge about the customers, customer
needs, trends in consumer tastes and the
evolution in consumer behavior that allows
them to remain in front of the innovation
curve. Thus by effectively harnessing the
capabilities provided by information
technologies, Ford is attempting to create a
sustainable competitive advantage in the auto
industry (Kerwin, 2000).
Organizational infrastructure refers to the set
of roles and organizational teams whose
members have skills to serve as resources for
individual projects. The way these roles relate to
each other within the context of the
organization's structure defines the
organizational infrastructure. The organizational
infrastructure defines the organization's
management style and philosophy. It
determines how the employees of the firm are
organized into formal and informal teams of
departments; how these teams interact formally
and informally; and the role and goals of each
team and how these relate to the overall
corporate strategy (Davenport et al., 1998).
Organizational infrastructure is intangible.
No two organizational infrastructures are
alike. Well-developed organizational
infrastructure can be a source of sustainable
competitive advantage. This advantage is not
derived from the organization's hierarchy.
Rather it is derived from the dynamic
interaction of the teams and individuals that
make up the hierarchy. Though it may be easy
to replicate or imitate the organization's
hierarchy, it is extremely difficult to replicate
the precise nature of interaction between the
roles and the teams in the hierarchy. The
more advanced the organizational
infrastructure, the greater the economic rents
it will generate for the organization.
Therefore, organizational infrastructure is a
strategic asset (Davenport et al., 1998;
Michalisn et al., 1997).
Federal Express (FedEx) is an example of a
firm that has built an information-technology
intensive global organizational infrastructure
that meets the criteria of a strategic asset. The
organizational infrastructure effectively
connects the internal and external
stakeholders at FedEx to each other in an
online, real-time mode. In this way it allows
FedEx to dynamically exchange knowledge
with its customers, vendors, suppliers and
trade partners while effectively transacting the
firm's core business functions. Further, all
230
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Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
employees at the firm have instantaneous
access to the knowledge resources resident in
its technologies, databases and operating
procedures. Employees can easily interact
across time zones, political borders, business
divisions, and organizational hierarchy levels
in a real-time online mode, thereby
facilitating instantaneous exchange of
knowledge. While it may be possible to
imitate the technological infrastructure at
FedEx, it is extremely difficult to replicate an
organizational structure equivalent to
FedEx's in complexity, behavior, and
productivity. A case in point is United Parcel
Service (UPS) and Document Handling
Services (DHL) which have OKMS that are
almost as elaborate, global and extensive as
that at FedEx, yet enjoy significantly smaller
market share both globally and domestically
when compared to FedEx (Rao et al., 1999).
General Electric is yet another firm that has
developed a `̀ social architecture'' that enables
it to keep ahead of its competitors in almost
all the markets it serves. The organizational
infrastructure at General Electric has
facilitated the maturing of this social
architecture by allowing a seamless flow of
knowledge across all employees regardless of
their position, authority, or geographical
postings. Hence, suggestions from anyone in
the firm are quickly assessed through a
specific process called `̀ Work out'' (Layne,
2000). While it may be easy to replicate
General Electric's organizational hierarchy,
the fabric that holds its organizational
infrastructure together, thereby facilitating a
productive `̀ social architecture'' and highly
effective knowledge sharing processes such as
`̀ work out'', is extremely difficult to replicate,
imitate or even substitute. In that sense it is
also valuable and rare.
The core of the OKMS is the people. This
component includes all the organization's
stakeholders ± employees, owners, customers,
suppliers and regulators/legislators. However,
employees are the most significant
participants. Employees are the key source of
the intellectual capital acquired and managed
by the OKMS. Intellectual capital is an
intangible asset. It is also rare, valuable, non-
substitutable and difficult to imitate.
Therefore, intellectual capital is a strategic
asset. Further the employees propel the
organizational learning process. They
articulate personal tacit knowledge into the
explicit knowledge resident in the
organization's databases, systems, and
operating technologies. In so doing, they
make personal knowledge available for
corporate use. Further, they tap into the
corporate pool of explicit knowledge,
internalizing it into personal tacit knowledge
that they then use to generate new knowledge.
This new knowledge is then articulated back
into the corporate databases, systems and
operating technologies, further expanding the
corporation's intellectual assets (Quinn et al.,
1996; Nonaka, 1991; Davenport et al., 1998;
Sviokla, 1996; Michalisn et al., 1997).
As individuals, employees do not meet the
requirements for a strategic asset. They easily
transfer from one organization to the next.
Their productivity depends on a complex
combination of factors: motivation, reward,
skill levels, experience, health and even
emotional factors. However, as teams or units
of workers, employees satisfy the conditions
of a strategic asset. The teams formed by the
employees, and the synergies emanating from
these teams, result in organizational learning.
Organizational learning is a strategic asset.
Since it is the collaboration between
employees that enables the process of
organizational learning, the collection of
employees ± human resources in total ± is a
strategic asset. Said another way, because the
employees are the custodians and developers
of intellectual capital, when they work
together or collaborate, they constitute a
strategic asset (Michalisn et al., 1997; Grant,
1998; McNearney, 1996; Spitzer, 1996;
Nonaka, 1991; Quinn et al., 1996).
Leading consulting firms have continued to
maintain a lead in investing in their employees
as a core element of their strategic competitive
advantage. Strategy consulting firms such as
Bain, Boston Consulting Group and
McKinsey have developed elaborate
information-technology enabled KM systems
that accentuate dialogue between individuals
rather than knowledge objects in a database.
They make effective use of communities of
practice, brainstorming sessions, one-on-one
conversations, apprenticeship, and computer-
supported collaboration and group work
technologies to keep their employees actively
engaged in perpetual organizational learning
(Hansen et al., 1999).
Microsoft is another example of a firm that
has developed a successful KM system using
the socio-technical approach. It has, over the
past decade, quietly assembled over 245 of
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Peter Meso and Robert Smith
Journal of Knowledge Management
Volume 4 . Number 3 . 2000 . 224±234
the brightest researchers from around the
globe and provided them with resources to
conduct leading-edge research and
development of future software products. The
organizational infrastructure that Microsoft
has established to support its researchers and
product developers facilitates a rich exchange
of knowledge across disciplines hitherto
considered remotely related. Yet Microsoft
has been able to tap the ensuing knowledge
into its products, hence expanding its market
share very rapidly while remaining well at the
forefront of innovation in the software
industry. Like General Electric it has been
able to expand its product offerings,
reshaping itself successfully as the business
environment evolved from the standalone
Personal Computer, to the Client-Server
Architecture and more recently to the
Internet and Electronic Commerce business
models. While technology is an integral part
of its KM system, people are even more
important. So are the culture and the
organizational infrastructure that cement the
interactions of its people and technology
components, hence generating the knowledge
that keeps Microsoft competitive (Stross,
1997; Kurtzman, 1998).
Culture refers to the shared beliefs, norms,
ethics and practices within an organization. A
knowledge friendly culture is one in which the
employees highly value learning and exhibit a
positive orientation to knowledge. It is one in
which experience, expertise and rapid
innovation are held to be more important
than hierarchy. Such a culture deeply
embraces knowledge and the opportunities
that come with learning. A knowledge
unfriendly culture, on the other hand, is one
that neither values nor rewards knowledge.
Culture is intangible. It is unique to each
organization. A knowledge friendly culture
cannot be replicated, imitated, acquired or
substituted. It develops within the
organization, and remains unique to that
organization. Therefore, a knowledge friendly
culture is a strategic asset.
Southwest Airlines is an example of a firm
that has developed a world-acclaimed positive
corporate culture that has contributed
significantly to its corporate success. In the
words of Southwest Airline's founder, Herb
Keller, Southwest's competitors can do
everything it does ± fly one type of aircraft,
serve no meals, transfer no luggage, give no
assigned seats, fly mostly short hauls, and
always charge the lowest fare ± but they
cannot copy its culture. Indeed, Southwest
Airlines has ranked among the top ten
corporations best to work for in the USA over
the past few years. It has also remained a
dominant player in the very competitive
airline industry. Its culture allows its
employees to acquire knowledge quickly both
from its clients and from fellow employees. It
allows employees to use the knowledge
instantaneously as they make decisions, and
encourages employees to disseminate their
knowledge to colleagues. Its culture rewards
learning and the development of others. As
such Southwest's employees are able to
provide very high levels of customer
satisfaction, thus generating the repeat
business that keeps it competitive (Colvin,
1997).
Knowledge may be tangible or intangible in
nature. Know-what, know-how, and know-
why, when articulated into the organization's
database and operating technologies, are
tangible. Similarly, explicit knowledge is
tangible because it has been encoded into
documents, databases, or some other
permanent medium. Explicit knowledge
exhibits strategic characteristics only when it
is proprietary. For this type of knowledge to
remain proprietary, it has to be protected
from other parties. Such protection is
achieved through legal assets such as patents
or copyrights, or through security features
such as access controls and encryption. When
explicit knowledge is captured on electronic
media it becomes increasingly vulnerable to
piracy regardless of the types of protection
being used to protect it. Piracy dilutes the
strategic value of knowledge. Therefore,
articulating knowledge makes it easier to
acquire and/or imitate that knowledge, hence
diluting its strategic properties (Quinn et al.,
1996; Michalisn et al., 1997; IBM, 1998;
Crock et al., 1996).
Tacit knowledge, on the other hand, is
intangible. However, it only becomes strategic
when used to advance the objectives of the
firm. When this knowledge is not used in the
interest of the firm, it does not contribute any
value to the firm. Because tacit knowledge
resides in an individual, its benefits are not
long-term. It is lost when the individual leaves
the organization. Therefore, tacit knowledge,
though rare, non-substitutable, inimitable,
and valuable (when used to advance
corporate goals), does not satisfy the ex-post
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Volume 4 . Number 3 . 2000 . 224±234
conditions of a strategic asset. Further,
because tacit knowledge can be captured as
explicit knowledge through the process of
articulation, it becomes possible to acquire.
These two observations limit the strategic
value of tacit knowledge (Michalisn et al.,
1997; Peteraf, 1993; Wernerfelt, 1984).
Care-why, the knowledge that resides in the
culture of a firm, is also intangible. Unlike
tacit knowledge it cannot be articulated into
explicit knowledge. However, care-why is
largely related to the culture of the
organization. It has strategic value only when
the culture of the organization is knowledge
friendly. This is because such cultures foster
the development of care-why. A culture that is
not knowledge friendly stigmatizes care-why,
thereby incapacitating organizational learning
and the resultant benefits. Therefore, the
strategic value of care-why is tied to the
strategic value of the organization's culture
(Quinn et al., 1996; Michalisn et al., 1997;
Davenport at al., 1998).
On the whole the socio-technical
perspective enables a firm to reap sustainable
competitive advantages from its OKMS
(Figure 5). The organization that develops its
OKMS, so that the intangible components
are strategically and appropriately
synchronized with a well-developed
technology infrastructure, acquires a system
that is rare, difficult to imitate, valuable and
non-substitutable. Such a system is strategic
and will accord the firm the sustainable
strategic advantages it needs to leverage its
competition.
Conclusion
In order to leverage its strategic competitive
position, a firm needs to adopt the socio-
technical perspective when developing its
OKMS. In so doing it addresses all the
components pertinent to the implementation
of the OKMS as a strategic system by giving
appropriate focus to those components that
generate sustainable competitive advantage.
OKMS that simply exploit the tangible
aspects of knowledge do not leverage the
firm's sustainable competitive advantage. On
the contrary, they dilute the sustainable
competitive position of the firm. Therefore
organizations that adapt this approach risk
losing their true source of sustainable
competitive advantage ± intellectual capital ±
by articulating this asset and thus making it
readily available to competitors.
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