Academic journal article SAM Advanced Management Journal

Do Knowledge Characteristics Matter? A Test of the Relationship between Knowledge Characteristics and Performance

Academic journal article SAM Advanced Management Journal

Do Knowledge Characteristics Matter? A Test of the Relationship between Knowledge Characteristics and Performance

Article excerpt

The answer to the question in the title is that yes, the two main characteristics of knowledge--ease of articulation and embeddedness--do matter to performance because they affect how knowledge is transferred. Moreover, the amount of effort needed to transfer knowledge is also related to these two characteristics and, ultimately, affects performance. A statistical analysis of questionnaire responses from 117 Chinese firms provides the data for these conclusions, at least one of which is contrary to some previous research. Managers of activities that depend on knowledge transfer, such as research and development, may benefit from this detailed analysis

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Introduction

Over the last few years, there has been an upsurge in interest among scholars on the importance of knowledge-based resources and their role in firms (e.g., see the special issue on Knowledge and the Firm of SMJ, 1996; Grant, 1996a). For instance, current interest in cross-functional capabilities like fast response (Stalk, 1988), new product development (Clark and Fujimoto, 1992), technical innovation, product innovation, all strategic or organizational innovation (Nonaka, 1994) reflects the strategic importance of knowledge in firms. As noted by Grant (1996b), "Knowledge has emerged as the most strategically-significant resource of the firm." "To put it somewhat more dramatically, there is evidence suggesting that the winners in tomorrow's market place will be the masters of knowledge management" (Bresman et al., 1999).

The increasing importance of knowledge has attracted researchers to analyze organizations in terms of their functions to process knowledge. For example, some researchers argued that heterogeneity in firms' knowledge-based assets and capabilities can explain differences in firm performance (Barney, 1986, 1991; Itami, 1987; Nelson and Winter, 1982; Penrose, 1959; Teece et al., 1997; Wernerfelt, 1984). Central to this issue is the assumption that a fundamental task for the firm is how to deal with knowledge efficiently. Relevant studies suggest the solution lies with the creation-transfer-utilization sequence of knowledge management activities, among which the ability to transfer knowledge is recognized as a key determinant of the firm's capacity to build and maintain sustainable competitive advantage (Argote, 1999; Birkinshaw et al, 2002; Epple et al., 1991; Kogut and Zander, 1992, 1993; Reagans and McEvily, 2003; Szulanski, 1996) within firms and between them (Grant, 1996a).

Meanwhile, recent advances in thinking about the dimensions of knowledge assets (e.g., Winter, 1987; Zander and Kogut, 1995) have prompted researchers to consider knowledge characteristics more explicitly. Knowledge characteristics have emerged as an important predictor of knowledge transfer (Cummings and Teng, 2003; Birkinshaw et al, 2002; Simonin, 1999). As an elusive concept, knowledge has been defined and classified in a variety of ways (e.g., see Hedlund, 1994; Huber, 1991; Nonaka, 1994; Nonaka and Takeuchi, 1995; Polanyi, 1962, 1967; Spender, 1996). Building on Winter's work (1987) capturing the key properties of knowledge that he argued are directly related to knowledge transfer, we singled out two of the most significant and interesting knowledge characteristics: articulation and embeddeness. Knowledge articulation is defined as the extent to which knowledge can be verbalized, written, illustrated, or otherwise articulated (Dixon, 1994). Knowledge embeddedness refers to the extent to which knowledge is a function of the system or the context in which it is embedded (Birkinshaw et al., 2002). These two dimensions are posited for the following reasons: first, they are relevant and complementary measures for relating types of knowledge to organizational performance, which addresses the ease of transfer; and second, they are concerned with the intrinsic nature of knowledge assets, which relates to how knowledge actually affects organizational performance. …

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