Handbook of Organizational Learning and Knowledge Management, Second Edition

Introduction

In this chapter, knowledge and learning are seen as key factors impacting economic organization. In particular, the dynamic capabilities framework is used to explain how the distinctive experience-based and knowledge-based assets of firms drive their vertical (and lateral) integration, their heterogeneity, and indeed, their very existence. Mainstream economics has employed ideas from organizational learning in a piecemeal fashion (Boerner, et al., 2001). The resource-based view (RBV) of the firm, in which resources are built through experiential learning, can inform economic models (Conner, 1991) and business arrangements more generally.

In competitive market environments, firms must build assets and capabilities that enable positive differentiation. Knowledge assets such as technical and organizational know-how can provide this differentiation. Accordingly, they can undergird a firm’s competitive position.

Knowledge is often embedded in routines, the well-established and largely uncodified patterns that firms have developed for finding solutions to particular problems (Nelson and Winter, 1982). More formal types of knowledge assets, such as patents, can also support competitive advantage.

Although the organizational knowledge that undergirds distinctive capabilities transcends the knowledge of individual firm employees, it must nonetheless be created and applied through the management of employees. With respect to knowledge assets, an important class of employees ...