Journal of Management & Governance

, Volume 17, Issue 3, pp 541–558 | Cite as

Reflections on knowledge-based approaches to the organization of production

  • Robert M. Grant


Knowledge-based approaches to the firm offer valuable insights into some of the central issues of governance and organizational design—especially into long neglected problems of coordination. I start from the assumption that the fundamental problem of economic organization is reconciling efficiency in knowledge development with efficiency in knowledge application. The paper extends the knowledge-based view of the firm and knowledge integration approach to organizational capability that I outlined in earlier papers (Grant in Strategic Management Journal, 1996a; Grant in Journal of Management Studies 7(4)375–387, 1996b) and draws upon subsequent contributions to the literature. From this basis, I derive implications for the relative efficiencies of alternative institutions of economic organization and for the design of firm structures.


Knowledge Organization Coordination Integration 


  1. Almeida, P., Song, J., & Grant, R. M. (2002). Are firms superior to alliances and markets? An empirical test of cross-border knowledge building. Organization Science, 13, 147–161.CrossRefGoogle Scholar
  2. Arrow, K. (1962). Economic welfare and the allocation of resources for invention. In National Bureau of Economic Research (Ed.), The rate and direction of inventive activity (pp. 609–625). Princeton: Princeton University Press.Google Scholar
  3. Baldwin, C. Y., & Clark, K. B. (1997). Managing in an age of modularity. Harvard Business Review, 75(5), 84–93.Google Scholar
  4. Brown, J. S., & Duguid, P. (1991). Organizational learning and communities-of-practice: toward a unified view of working, learning and innovation. Organization Science, 2, 140–157.CrossRefGoogle Scholar
  5. Camerer, C., & Knez, M. (1996). Coordination, organizational boundaries and fads in business practices. Industrial and Corporate Change, 5(1), 89–112.CrossRefGoogle Scholar
  6. Child, J., & McGrath, R. (1999). Special research forum call for papers: New and evolving organizational forms. Academy of Management Journal, 42, 116.Google Scholar
  7. Choi, C. J., & Hilton, B. (2005). Knowledge resources: Critical systems thinking, viable system model and ‘gifts’. Systems Research and Behavioral Science, 22, 561–564.CrossRefGoogle Scholar
  8. Conner, K. R., & Prahalad, C. K. (1996). A resource-based theory of the firm: Knowledge versus opportunism. Organization Science;, 7(5), 477–501.CrossRefGoogle Scholar
  9. Cusumano, M. A. (1997). How microsoft makes large teams work like small teams. Sloan Management Review, Fall, 9–20.Google Scholar
  10. Cusumano, M. A., & Yoffie, D. B. (1998). Competing on internet time: Lessons from netscape and its battle with microsoft. New York: Free Press.Google Scholar
  11. Daft, R., & Lewin, A. (1993). Where are the theories of the ‘new’ organizational forms? Organization Science, 4, i–iv.Google Scholar
  12. Demsetz, H. (1995). The economics of the business firm: Seven critical commentaries (pp. 1–14). Cambridge, England: Cambridge University Press.CrossRefGoogle Scholar
  13. Donaldson, L. (1995). American anti-management theories of organization: A critique of paradigm proliferation. Cambridge: Cambridge University Press.Google Scholar
  14. Feldman, M. S., & Pentland, B. T. (2003). Reconceptualizing organizational routines as a source of flexibility and change. Administrative Science Quarterly, 48(1), 94–118.CrossRefGoogle Scholar
  15. Felin, T., & Foss, N. J. (2005). Strategic organization: A field in search of microfoundations. Strategic Organization, 3(4), 441–455.CrossRefGoogle Scholar
  16. Foss, N. J. (1996). More critical comments on knowledge-based theories of the firm. Organization Science, 7(5), 519–523.CrossRefGoogle Scholar
  17. Gavetti, G., & Levinthal, D. (2000). Looking forward and looking backward: Cognitive and experiential search. Administrative Science Quarterly, 45(1), 113–137.CrossRefGoogle Scholar
  18. Ghoshal, S., & Moran, P. (1996). Bad for practice: A critique of transaction cost theory. Academy of Management Review, 21(1), 13–47.Google Scholar
  19. Grant, R. M. (1996a). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(winter special issue), 109–122.Google Scholar
  20. Grant, R. M. (1996b). Prospering in dynamically-competitive environments: organizational capability as knowledge integration. Organization Science, 7(4), 375–387.CrossRefGoogle Scholar
  21. Grant, R. M., & Baden-Fuller, C. (2004). A knowledge accessing theory of strategic alliances. Journal of Management Studies, 41(1), 61–84.CrossRefGoogle Scholar
  22. Hamel, G. (1991). Competition for competence and inter-partner learning within international strategic alliances. Strategic Management Journal, 12(Summer Special Issue), 83–103.CrossRefGoogle Scholar
  23. Jensen, M. C. (1998). Foundations of organizational strategy. Cambridge: Harvard University Press.Google Scholar
  24. Jensen, M. C., & Meckling, W. H. (1998). Specific and general knowledge and organizational structure. In M. C. Jensen (Ed.), Foundations of organizational strategy (pp. 103–125). Cambridge, MA: Harvard University Press.Google Scholar
  25. Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3), 384.CrossRefGoogle Scholar
  26. Kogut, B., & Zander, U. (1996). What firms do? Coordination, identity, and learning. Organization Science, 7, 502–518.Google Scholar
  27. Lyles, M. A. (1988). Learning among joint-venture sophisticated firms. Management International Review, 28(special issues), 85–98.Google Scholar
  28. Milgrom, P., & Roberts, J. (1992). Economics, organization and management (p. 91). Prentice Hall: Englewood Cliffs.Google Scholar
  29. Narduzzo, A., Rocco, E., & Warglien, M. (2000). Talking about routines in the field. In G. Dosi, R. R. Nelson, & S. G. Winter (Eds.), The nature and dynamics of organizational capabilities (pp. 27–50). Oxford: Oxford University Press.Google Scholar
  30. Nelson, R. R., & Winter, S. (1982). An evolutionary theory of economic change. Cambridge, MA.: Harvard University Press.Google Scholar
  31. Nickerson, J. A., & Zenger, T. R. (2004). A knowledge-based theory of the firm—the problem-solving perspective. Organization Science, 15(6), 617–632.CrossRefGoogle Scholar
  32. Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14–37.CrossRefGoogle Scholar
  33. Ouchi, W. (1980). Markets, bureaucracies, and clans. Administrative Science Quarterly, 25, 129–141.CrossRefGoogle Scholar
  34. Pentland, B. T. (1992). Organizing moves in software support hot lines. Administrative Science Quarterly, 37(4), 527–548.CrossRefGoogle Scholar
  35. Pisano, G. P. (1994). Knowledge, integration, and the locus of learning: an empirical analysis of process development. Strategic Management Journal, 15(Winter special issue), 85–100.CrossRefGoogle Scholar
  36. Porter, M. E., & Siggelkow, N. (2008). Contextual interactions within activity systems and sustainability of competitive advantage. Academy of Management Perspectives, 22(2), 34–56.CrossRefGoogle Scholar
  37. Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79–91.Google Scholar
  38. Prencipe, A., & Tell, F. (2001). Inter-project learning: Processes and outcomes of knowledge codification in project-based firms. Research Policy, 30(9), 1373–1394.CrossRefGoogle Scholar
  39. Puranam, P., & Jacobides, M. C. (2006).The dynamics of coordination regimes: Implications for organizational design. London Business School discussion paper (April).Google Scholar
  40. Robertson, D. H. (1930). Control of industry (p. 85). London: Nisbet & Co.Google Scholar
  41. Sanchez, R., & Mahoney, T. (1996). Modularity, flexibility and knowledge management in product and organization design. Strategic Management Journal, 17(winter special issue), 63–76.Google Scholar
  42. Selznick, P. (1957). Leadership in administration. New York: Harper and Row.Google Scholar
  43. Simon, H. A. (1962). The architecture of complexity. Proceedings of the American Philosophical Society, 106, 467–482.Google Scholar
  44. Simon, H. A. (1982). Sciences of the artificial (2nd ed.). Cambridge: MIT Press.Google Scholar
  45. Simon, H. A. (1991). Organizations and markets. Journal of Economic Perspectives, 5(2), 25–44.Google Scholar
  46. Simonin, B. L. (1997). The importance of collaborative know-how: An empirical test of the learning organization. Academy of Management Journal, 40, 1150–1174.CrossRefGoogle Scholar
  47. Smith, A. (1937). An inquiry into the nature and consequences of the wealth of nations. New York: Modern Library Edition, chapter 1. (Originally published 1776).Google Scholar
  48. Spender, J.-C. (1992). Limits to learning from the west: How Western management advice may prove limited in Eastern Europe. International Executive, 34(5), 389–410.CrossRefGoogle Scholar
  49. Taylor, F. W. (1916). The principles of scientific management. Bulletin of the Taylor Society. Reprinted in J. M. Shafritz and J. S. Ott (Eds.), Classics of Organization Theory, pp. 66–81. Chicago: Dorsey Press.Google Scholar
  50. Thompson, J. D. (1967). Organizations in action. New York: McGraw Hill.Google Scholar
  51. Walsh, J. P., Meyer, A. D., & Schoonhoven, C. B. (2006). A future for organization theory: Living in and living with changing organizations. Organization Science, 17(5), 657–671.CrossRefGoogle Scholar
  52. Weick, K. E. (1976). Educational organizations as loosely-coupled systems. Administrative Science Quarterly, 21, 1–19.CrossRefGoogle Scholar
  53. Williamson, O. E. (1975). Markets and hierarchies. New York: Free Press.Google Scholar
  54. Williamson, O. E. (1985). The economic institutions of capitalism (p. 143). New York: Free Press.Google Scholar
  55. Williamson, O. E. (1991). Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36, 269–296.CrossRefGoogle Scholar
  56. Winter, S. G. (2000). The satisficing principle in capability learning. Strategic Management Journal, 21(10/11), 981–996.CrossRefGoogle Scholar
  57. Womack, J., Jones, D., & Roos, D. (1990). The machine that changed the world. New York: Rawson Associates.Google Scholar
  58. Wruck, K. H., & Jensen, M. C. (1994). Science, specific knowledge, and total quality management. Journal of Accounting and Economics, 18, 247–287.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2011

Authors and Affiliations

  1. 1.Department of Management and TechnologyBocconi UniversityMilanItaly

Personalised recommendations