Academic journal article Academy of Strategic Management Journal

Managing Knowledge in the Age of Global Capital

Academic journal article Academy of Strategic Management Journal

Managing Knowledge in the Age of Global Capital

Article excerpt


For scholars and professionals in the field of business management, the challenges of the twenty first century appear to be especially daunting. On one hand, the recent past has seen a tremendous acceleration in the rate of trade between countries, the growth of MNCs, and fundamental changes in work practices leading to increased productive efficiencies in organizations (UNCTAD, 2013). On the other hand, the future poses intensified challenges. Will organizations of the future be "wiser" than they were before (Sims & Sauser, 2013)? Will newer forms of technology be deployed by organizations to increase their grasp of the market (Block, 2014)? How can organizations better interlink their product delivery systems to offer more integrated services to their customers (Clark, Huckman & Staats, 2013)? How will they respond to the challenges of a diverse workforce by instituting systems that are equitable and just (Scheel, Rigotti & Mohr, 2014)?

In this paper, we advance the contention that organizational theory and practice are both in a state of dynamic mutual interaction, with theory often playing a lagging role. In other words, organizational actions precede, and are retroactively described (and legitimized) by theoretical developments. We examine one such instance, which is the emergence of the knowledge-based formulations of the theory of the firm in the 1990s. We suggest that the new theories of the firm as a receptacle of knowledge emerged in the context of the intensified knowledge communication within organizations in the early 1990s. In that time, as we crested the socially constructed temporal milestone into the new millennium, we saw a sudden intensification in management theory of "knowledge- based" perspectives in organizational theory, especially in strategic management. Knowledge management became the subject of special issues in a variety of influential journals, the exclusive topic of a plethora of academic websites, and a number of consultants began to market executive programs aimed specifically at managers wishing to take advantages of knowledge routines within firms . This trend continues till today, as we talk about knowledge management in new organizational configurations (Wagner, Hoisl, & Thoma, 2014), absorptive capacity (Huang, Lin, Wu & Yu, 2015), dynamic capabilities (Knudsen, Levinthal & Winter, 2014), and intellectual property (Liu, & La Croix, 2015).

Why did organizational theorists suddenly develop this burst of interest in the concept of "knowledge?" After all, the view that firms should be studied primarily as effective carriers of capabilities is not a new concept, dating back to the works of Edith Penrose (1959), and the resource based view of the firm (Barney, 1991). Why then this need to drastically rethink the premises under which firms exist and operate? Is there a theoretical basis for this perspective, or is knowledge management merely a fad, and management theory (and practice) is falling victim to its own theories of isomorphism (Powell and DiMaggio, 1991)?

We believe that there is indeed a historical basis for the growing importance of knowledge as a concept in management theory. We further contend that this interest in knowledge-based perspectives is directly related to the new concerns of management as it seeks to preserve its property rights in a new industrial climate. In other words, we contend that knowledge-based theories of the firm represent tools to assist corporations to manage labor in an era of the new international division of labor.

The rest of this paper is organized into three sections. In the first section, we discuss the issue of knowledge communication within firms across geographical distances, especially as they relate to the transfer of knowledge within MNCs. We also examine the new technological and organizational arrangements that need to be deployed to facilitate better coordination of diversified firms. …

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