Abstract
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.
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Notes
The paper also draws upon a paper I presented at the conference on information flows in knowledge intensive firms, Bocconi University, 27 November 2001.
H. Demsetz (1995) makes a similar point. Demsetz distinguishes transaction and specialization theories of the firm, pointing out that transaction costs are the costs of exchange while production costs are the costs of converting inputs into output.
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Grant, R.M. Reflections on knowledge-based approaches to the organization of production. J Manag Gov 17, 541–558 (2013). https://doi.org/10.1007/s10997-011-9195-0
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DOI: https://doi.org/10.1007/s10997-011-9195-0