Handbook of Organizational Learning and Knowledge Management, Second Edition

Knowledge Assets and Learning

Knowledge assets such as technical and organizational know-how undergird each firm’s competitive position. Such assets are partially embedded in routines, the well-established and largely uncodified patterns that firms have developed for finding solutions to particular problems. Learning, which is necessary for the maintenance and development of these assets, is an inherently collective, organizational process that is grounded in, but surpasses, the experience and expertise of individuals (Fiol and Lyles, 1985; Simon, 1991) and individual competence. Ideally, this collective learning permits the organization to transcend individual-level bounded rationality (Teece et al., 1994). Value can also derive from the unique combination and alignment of intangible assets that entrepreneurs and managers assemble.

The pioneering description of organizational learning in Cyert and March (1963) saw learning as crisis driven and short term in focus, and inflexible to managerial intent. But for the field of strategic management, the key insight from Cyert and March was that the adaptive (and often path dependent) learning of firms, as embodied in their standard operating procedures, accounts for firm heterogeneity (Pierce et al., 2002). This notion, coupled with the insights of Penrose (1959) about the role of firm ‘resources’ in growth and innovation, eventually gave rise to the RBV of the firm. Over time, the dynamic capabilities framework (Teece et al., 1997) ...