Personnel

Review
24,3

A perspective on knowledge,
competence and strategy
Georg von Krogh and Johan Roos

56

Institute for International Management Development, Lausanne,

Switzerland
Introduction
The firms competitive advantage represents its raison detre. Therefore, an
understanding of the basis for competitive advantage is at the core of the
management field. Although the idea that competences are underlying
sustainable competitive advantage is central, there has been no thorough
investigation into the very nature of competences in the management literature.
This article applies theories of sociology of knowledge to enhance the resourcebased perspective of the firm into a coherent perspective of competences. The
emergent competence-based perspective of the firm has important
implications for strategic management in general and for personnel
management in particular.
In 1939, Chamberlin[1] had already introduced the concept of competitive
advantage. Building on this, Hofer and Schendel[2] discussed competitive
advantage in relation to the firms strategy defined as unique positions relative
to competitors. Discussing competitive advantage as the supreme objective of a
firms strategy, Porter[3, pp. XV-XVI] suggested that: Competitive advantage is
at the heart of a firms performance in competitive markets[it]grows
fundamentally out of the value a firm is able to create for its buyers.
A firm is said to have a competitive advantage when it implements a strategy
which is not implemented simultaneously by other competing firms[3,4].
Competitive advantage can be created in numerous ways, for instance, by size,
location, access to resources[5] or even by plain luck[4]. However, because
success will inspire competitors to respond with superior product features,
lower prices, or both, ultimately time will render all advantages obsolete[6].
A firm sustains its competitive advantage if it resists erosion by competitors
and thereby keeps a unique position which allows it to outperform its
competitors consistently[2,3,7]. As discussed by Reed and DeFillippi[8], the

Personnel Review, Vol. 24 No. 3,

1995, pp. 56-76. MCB University
Press, 0048-3486

The authors are listed in alphabetical order and have contributed equally. The authors gratefully
acknowledge helpful comments from Marlene Fiol, Richard Klimoski, Bente Lwendahl, ivind
Revang, Peggy Simcic Brnn, Charles Stabell, Andrew Van de Ven, Thorvald Hrem and two
anonymous reviewers. An earlier version of the conceptual framework in this article was
discussed at a workshop at the INSEAD Conference on Strategic Process, 15-17 December 1992.
This research was undertaken within the research programme on the competence-based
perspective of the firm at the Norwegian School of Management.

question of how long a sustainable competitive advantage lasts is firmspecific, but one thing is clear, it will not last for ever[9].
The main threat to the erosion of competitive advantage is imitation[8,9].
Although the identification and development of latent resources, such as
competence, are important in strategic management, the question is still open
as to how competence-driven competitive advantage erodes through imitation.
In this article we argue that the resource-based perspective of the firm does not
shed sufficient light on the processes of imitation when it comes to competencebased competitive advantage.
By building on the resource-based perspective, this article develops a better
theoretical understanding of how competences build firms competitive
advantage. The point of departure is knowledge, implying that the relevant unit
of analysis in a competence-based perspective is the individual. This is different
from the unit of analysis used both within the competitive strategy perspective
(the industry) and the resource-based perspective (the firm). Here, knowledge is
not seen as a resource in a traditional meaning, such as in financial resources
(cash flow, debt capacity, etc.), physical resources (plant, equipment, etc.),
organizational resources (planning, control and total quality systems, culture),
technology (high quality production, low cost plants, etc.), intangible resources
(goodwill, brand name, etc.) and human resources (in terms of various types of
personnel). For a more extensive discussion of a different categorization of
resources, see[2,10-13]. Knowledge differs from these types of resources in many
ways; it takes many forms and shapes at a given moment in time it may be
dynamic, it is hard to grasp theoretically and, most important for this article, it
is the underlying basis for forming competences.
From our analysis we find that the resource-based perspective is highly
appropriate for the traditional definition of resources and some types of
competences. We will demonstrate, however, that the resource-based
perspective is not sufficient for explaining how the most important of a firms
competences can build sustainable competitive advantage. Because
competences form the most important building block in the development of
competitive advantage, we believe that human resource managers should
engage actively in the strategizing processes of a firm. A sound competitive
strategy involves the discovery of potential sources of knowledge in the
organization, as well as a thematization of the competitively superior
knowledge that needs to be nurtured in the future time-frames.
The article begins with a brief review of the competitive strategy approach
and the resource-based perspectives of the firm. It should be noted that there
already exist several excellent reviews of these perspectives and the differences
between them[14,15]. The issue of imitation receives particular attention. In the
second part of the article the foundation of a competence-based perspective is
laid by constructing a concept of competence and what we call the competence
configuration. This concept is then used to discuss the evolution of
competences in a firm. The third part of the article develops three contexts for

Knowledge,
competence and
strategy
57

Personnel
Review
24,3
58

the imitation of competence. Finally, conclusions are made and implications

drawn.
The competitive strategy approach
The competitive strategy perspective[16-18] posits that competitive advantage
is derived from the firms environment, more precisely from the industry in
which it competes. In fact, the goal of competitive strategy for a company or
business unit is to
find a position in the industry where the company can best defend itself against
competitive forces (entry, threats of substitution, bargaining power of buyers, bargaining
power of suppliers, and rivalry among existing competitors) or can influence them in its
favor[18, pp. 3-4].

Thus, the competitive strategy perspective can be seen as an outside-in

approach to understanding the basis of competitive advantage. This approach
stresses that an effective competitive strategy calls for the firm to take offensive
or defensive action to create a defendable position against competitive forces.
Thus, industry conditions determine the rules of the game when it comes to the
nature of competition and the strategies available to firms.
As pointed out by Teece et al.[14], the problem for strategy researchers is that
there is no conceptual framework or underlying analytic schema behind all the
taxonomies of this competitive strategy paradigm. Much of the competitive
strategy literature has focused on the product-market scope[18,19]. The
literature specifies the particular (sub)industries or groups to which the firm
confines its product-market position, focusing the search on well-defined areas
for which common statistics and economic forecasts are generally available.
Competitive advantage is derived by isolating characteristics of unique
opportunities within the field as defined by the product-market scope.
Particular properties of individual product-markets (cost leadership or
differentiation) are identified which give the firm a strong competitive position
and even result in so-called sustainable competitive advantage.
A major assumption of this perspective is that all relevant, industry-specific
resources are distributed homogeneously and are perfectly mobile[9]. That is,
the basis for competition is not derived from the firm as such, but rather from
the characteristics of the industry. Consequently, superior performance in an
industry or strategic group results from this environmentally-derived
competitive advantage.
A second assumption of the theory which is grounded in traditional
industrial economics is that both demand and supply conditions are known,
and, consequently, market conditions are relatively stable[9,17,20,21]. In a stable
demand environment, competition is viewed as a zero-sum market share rivalry
between existing and potential firms. Also, because the demand side of the
market is known or predictable, competitive advantage stems from the supply
side[22].

Consequently, selecting the competitive advantage that yields the highest

levels of economic performance requires intensive analysis of the industry
structure, of suppliers, buyers, new entrants, and threats from substitutes, as
discussed in depth by Porter[18] and other authors within the industrial
organization paradigm. Ghemawat[5], for instance, found that sustainability of
a competitive advantage is determined by the source of the advantage, the
industry and the degree of competition. Thus, the essence of formulating a
competitive strategy is to relate a company to its environment, analogous to the
opportunities and threats part of the classical SWOT-analysis[23]. The essence
of this approach was expressed by Porter[24]: Worship the environment not
the inside [of the firm].
The resource-based approach
From the resource-based perspective, on the other hand, the firm is seen as a
portfolio of resources. What a firm can do to create competitive advantage is not
simply a function of the opportunities in the environment (industry) but also of
what resources the firm can assemble[9,10,25]. Thus, the resource-based
perspective is an inside-out approach to understanding the basis of
competitive advantage.
The resource-based perspective has gone far beyond the basic neoclassical
assumptions of economic activity, that all parties have perfect and complete
information, and that resources are completely mobile and divisible and,
therefore, flow freely between companies. Rooted in evolutionary economics
theory, the resource-based approach has re-established the importance of the
individual firm, as opposed to the industry, as the relevant unit of analysis[26].
This perspective focuses on the firms internal resources as the basis for
creating competitive advantage[9,10,25,27]. The core of this perspective was
formulated by Rummelt[28, p. 557]: a firms competitive position is defined
by a bundle of unique resources and relationships.
Although resources may be subdivided, depending on the situation at
hand[10], it is difficult to imagine an industry where firms possess exactly the
same resources, one of the basic assumptions of the competitive strategy
perspective. This means that firms would have the same relevant physical
capital resources[29], organizational capital resources[30] and human capital
resources[31]. If this were the case, the strategies pursued by one of the firms in
the industry could, by definition, be conceived and subsequently implemented
by other firms in the same industry. It would simply be a matter of time before
other firms created the same competitive advantage as the first one, thus
quickly eroding the originators position. The only possible competitive
advantage would come from moving first[9].
The assumption that all firms within an industry are homogeneous also
contradicts the notion of creating sustainable competitive advantage. Barriers
to entry[16,32] only exist when competing firms are heterogeneous from a
resource perspective. Such barriers only become sources of sustainable
competitive advantage if the competing firms resources are heterogeneous and

Knowledge,
competence and
strategy
59

Personnel
Review
24,3
60

imperfectly mobile[9]. In fact, valuable and rare organizational resources

can only be a source of sustained competitive advantage if firms that do not
possess these resources cannot obtain them[9, p. 107].
By assuming that the firms resources may be distributed heterogeneously
throughout the industry, that these resources may be immobile between firms,
and that demand conditions are more dynamic than the static environments of
the competitive strategy model, a different picture of the basis for competitive
advantage emerges[4,9,22]. The critical task of a firm thus becomes one of
maintaining the uniqueness of its products and services, or, in the case of
similar products, the firms low cost position. The challenge lies in balancing
the costs of obtaining this difference with performance[4].
Unique capabilities or otherwise costly-to-copy inputs[20] are particular
types of resources. In the literature, such resources are discussed under a
variety of names, e.g. distinctive competences[2,19,23]; invisible assets[33];
core competences[34]; core capabilities[35]; internal capabilities[4];
skill and capability accumulation[14]; embedded knowledge[36];
absorptive capacity[37]; underlying capabilities[5]; unique combinations of
business experience[38,39]; corporate culture[40]; valuable heuristics and
processes[41]; and unique managerial talent[10].
The resource-based perspective focuses on exploiting these types of firmspecific resources and/or capabilities as well as the strategies for acquiring and
developing new ones[10,25,27,42,43]. Such a skill-acquisition and learning
orientation is what Teece et al.[14] labelled the dynamic capabilities approach.
The problem is that firms often lack the organizational capacity to develop
these resources (capabilities) quickly[27]. Some resources, like know-how and
goodwill, are not even tradable[27,42]. Again, this shows the variety of concepts
in the literature[44-46].
In the resource-based perspective, creating a sustainable competitive
advantage implies that a firms resource must have four characteristics:
(1) they must be valuable;
(2) there cannot be strategically equivalent substitutes;
(3) they must be imperfectly imitable; and
(4) they must be rare among competitors[9].
This points to the strategic value of resources for the firm and to their potential
strategic value for competing firms. Thus, the resource-based perspective leads
inevitably to a focus on imitability of non-purchasable, intangible, firm-specific,
and embedded types of resources[8].
The unclear process of imitation
Several authors have tried to penetrate the imitability challenge. Even those
who have tried to understand imitability have never arrived at models which
lend themselves to empirical studies. Nor do the findings conceptually develop
the strategic management field. Reed and DeFillippi[8, p. 97], for instance,

argued that low ambiguity allows competitors to observe and understand

the source of competitive advantage. It is hard to see how this finding can help
us to understand the imitability process better. Similarly, little help is provided
by Conner[20, p. 144], who underscored that in a resource-based view of the
firm, team-specific assets within the firm will be more specific to other teams
inside the firm than to teams outside the firm, and hence more productive.
Because valuable and unique resources, according to the resource-based
perspective, are often imperfectly imitable and not substitutable, the
sustainability of competitive advantage is a function of various barriers to
imitation. These can be seen as isolating mechanisms[47], or even
organizational routines[48] and are comparable to the notion of entry
barriers as discussed in the competitive strategy literature[17,32,49]. They are
also analogous to what Teece[50] labels complementary assets and
appropriability regime, resources which allow a firm to capture profits from
an innovation.
Although some barriers to imitation are higher than others, Porter[3] argued
that these barriers are never insurmountable. In fact, both he and Ghemawat[5]
found that the potential for competitive advantage is greatest in industries
where firms need large investments in specialized activities, skills and assets
a form of organizational commitment.
The more vigorous the barriers of imitation the slower competitors imitate
the competitive advantage. Thus, it is obvious that understanding imitability is
perhaps the most critical issue, not only in the resource-based perspective, but
within the whole strategic management dialogue. Still, to a large extent, the
question of how various resources, skills and competences are imitated remains
unanswered. It seems that many authors have focused on the requirement for
imitation not to take place rather than understanding the processes involved in
successful imitation. The imitation process is clearly an extremely complex
process which is not understood completely. Williams[6] and Dietrickx and
Cool[27] may provide examples of the lack of suitable explanations thus far.
The former outlined a model of distinct and predictable resource-imitation
forces[6, p. 32] consisting of existing concepts. The latter claimed that:
Sustainability of a firms competitive advantage hinges on how easy it is to
replicatethe imitability of a resource (asset) is related to the characteristics of
the process by which it may be accumulated (emphasis added)[27, p. 1507].
Again, it is hard to see how these claims/findings provide us with a better
understanding of the imitation process.
In their attempt to discuss the conditions under which imitation may or may
not occur, Reed and DeFillippi[8] introduced the concept of causal ambiguity
to explain the imitability-sustainability process better. Causal ambiguity was
suggested as the main determinant of imitation and was defined in terms of the
tacitness, complexity and specificity of a firms skills and resources,
where
tacitness refers to the implicit and noncodifiable accumulation of skills that results from
learning by doing (p. 89)[it] is embodied within the skill[emphasis added] component of

Knowledge,
competence and
strategy
61

Personnel
Review
24,3
62

competences (p. 91)Complexity results from having a large number of interdependent skills
and assets. Specificity refers to the transaction-specific skills and assets that are utilized in the
production processes and provisions of services for particular customers (p. 89).

Still, according to the authors, tacitness remains an unobservable and

noncodifiable concept[8, p. 100]. Because it is possible to interpret the above
concepts relatively freely, it is difficult to see how they can be studied
empirically and provide conceptual development in the field.
An important conclusion can be drawn from these attempts, namely that
purchasable resources can never be sources of sustainable competitive
advantage, because they can be traded in the market. A better understanding of
the very nature of such resources should make it possible to extend further the
emerging resource-based theory of the firm.
In this article we have chosen to focus on one particular type of resource
and/or capability, namely competences, and its processes of imitation. To help
us enter into the obviously ambiguous and, in strategic management, relatively
unexplored world of competences we have combined theories of strategic
management with the sociology of knowledge.
A concept of competence
The term competence has been used by several authors to denote the ability
of the firm to act[34,51-54]. Because of its strong action focus, the term
competence is often used similarly to the way it is used in our daily speech; to
code a broad range of our experiences related to craftsmanship, specialization,
intelligence, and problem solving. As such, competence remains an
experience-near concept[55] which needs further conceptual clarification if it is
to serve the purpose of theory building[56,57].
Webster[58, p. 63] defines competence as, The quality or state of being
functionally adequate or of having sufficient knowledge, judgment, skill or
strength for a particular duty. This definition of competence presupposes a
particular knowledge and a particular task. The term competence is derived
from competentia (Latin) which literally means agreement. Only where there
exists an agreement or fit between knowledge (or subject) and task may we
speak of competence. Thus, it is only meaningful to discuss competence in a
specific knowledge-task context or, put another way, competence is both
knowledge specific and task specific[59]. In the following we build up a concept
of competence by investigating further its two main components knowledge
and tasks.
The knowledge system of the firm
Historically, knowledge has been studied on different levels[60]. In
anthropological, socio-psychological, and sociological works[61-64], knowledge
is seen as a social product what members of the social system need to
understand in order to function in that system. Works in cognitive psychology,
emphasizing perceptual and representational knowledge and thought
processes[65,66], focus on the individual decision makers knowledge. Since the

unit of analysis in developing a concept of competence is mainly the firm, its

resources and social processes, a micro-level concept of knowledge (individuals)
needs to be merged with a macro level concept of knowledge (firms). According
to Berger and Luckman[67] and Schutz and Luckman[68,69], the sociology of
knowledge, based on the phenomenology of Schutz[70], accomplishes precisely
this merger.
Berger and Luckmans constructivist theories of knowledge development are
in sharp contrast to the more objectivist perspective. The point of disagreement
is whether knowledge is dependent on the knowing subject, a person, a group
or a firm[45,46,67,71], or independent of it[72,73]. The theory of constructed
knowledge assumes that knowledge within a group, a firm or an individual is
dependent on the knowing subject transmitting knowledge through social or
cognitive processes. Knowledge about true reality is always questionable
across different firms and groups[40,62,74,75]. According to Berger and
Luckman[67] it is not meaningful to distinguish between a constructed reality
and constructed knowledge. The two are intertwined and difficult to
distinguish in empirical analysis. Therefore, to apply a theory of constructed
knowledge in a formal analysis of firms one must address the question of
subjects and levels of analysis, in short who knows what. The objectivist
direction describes the case of a subject (person or group) whose knowledge
about a true reality, unbiased by personal interpretations, can be transferred
to others through, for instance, written texts or speech[76].
A stock of knowledge on the subjective level is tied to individuals[67] and
allows the individual to observe, understand, and act in everyday life.
Subjective knowledge may be bound to time and circumstances[77,78] since the
individual continuously acquires new experiences through facing new events.
Yet, an individual also has a more or less fixed subjective knowledge, what
Schutz and Luckman[68] term habitual knowledge. A particular kind of
habitual knowledge, skill, is the habitual functioning of bodily movement[68,
p. 107]. Skill is central to a concept of competence because the resolution of a
task involves various forms of bodily movement (e.g. writing). A person may
have acquired a good theoretical understanding of carpentry, but the building
of a house requires yet another knowledge, namely the skill of moving a
hammer.
The individuals stock of knowledge contains both a subjective and a social
component. In order to keep subjective knowledge clearly distinguished from
social knowledge, Habermas[79] suggests that subjective knowledge is not
shared by other individuals. For a stock of knowledge to evolve at the social
level, however, the individual must share subjective knowledge with others.
Schutz and Luckman[68] called this process objectivation[67,80].
Objectivation is a complex and continuously ongoing process in which
individuals account for the experiences of the other members of a group or firm
(interpretation) and share their own experiences with others.
The objectivation process covers more than just communication. In firms, it
generally makes use of at least three channels; language and signs, tools, and

Knowledge,
competence and
strategy
63

Personnel
Review
24,3
64

marks[68]. First, individuals convey their subjective knowledge by talking,

writing; using language. However, part of an individuals stock of knowledge is
more or less tacit. Polanyi[81,82] suggests that an individuals knowledge may
be impossible to convey linguistically. Individuals may not be aware of their
knowledge, nor possess an appropriate repertoire of words to express their
knowledge and feelings[83,84]. However, lacking a language, or to complement
linguistic expressions, the individual may convey knowledge by other signs:
gesturing, playing, evoking facial expressions, drawing, etc.
Second, individuals may also convey subjective knowledge to others through
creating and applying tools to solve tasks. As individuals struggle to resolve
a particular task they may attempt many different solutions using different
tools at hand. The successful resolution of a task may be obtained by one tool in
particular, with all other tools discarded in favour of the successful tool. In the
process of completing the task, as well as on task completion, the tool has
helped to objectivate subjective knowledge (tools that work or do not work) to a
possible observer.
Third, marks are the results of acts established by the one acting in order to
hold onto a definite element of knowledge and to remind one of this[68, p. 274].
As such, marks, akin to ribbons marking a path through a forest, may also
objectivate subjective knowledge, as in knowledge acquired of the particular
forest.
By speaking, acting, writing, playing, producing and using tools and marks,
individuals continuously participate in the creation of the social knowledge of a
firm. This knowledge allows people to observe and make a shared sense of
organizational events as well as to act in a co-ordinated manner[62,85-93]. As in
the case of an individuals stock of knowledge, social knowledge may be of a
habitual kind as well as being dependent on the time and circumstances of
individuals conveyance of subjective knowledge. Also, skills may be
socialized[68], and they may be transferred to others without presupposing a
linguistic knowledge acquisition.
Yet, the objectivation of an individuals knowledge may be affected by the
process of legitimation[64,67,94-96]. Drawing on Berger and Luckmans[67]
work we propose that subjective knowledge must be made legitimate on at least
four levels in order to contribute to the creation of new social knowledge. First,
subjective knowledge must be conveyed by using language and signs, marks
and tools that are commonly acceptable to a group[68,97]. The means used may
not necessarily be commonly known, however, as when introducing new words
and concepts to facilitate a frame-breaking process[69]. Second, subjective
knowledge can be made legitimate by referring to or evoking organizational
stories, myths, proverbs, or maxims. Third, firms have a set of standard
operating procedures and other more or less formally espoused theories, like
forecasting techniques, accounting principles, quality control statistics, etc.
Individual knowledge may be made legitimate by making a reference to these
theories or made concrete by them using or supporting. Fourth, firms, like all
institutions, also have some continuity of paradigms which give meaning to

everyday activity and experience[98-100]. Such paradigms put everything in

its right place[67, p. 116]. For example, they function as industry-specific
recipes for acceptable firm behaviour[101], or they put the firm in a context of
neoclassical economy where intra-firm competition is acceptable[102-103].
The process of legitimation is needed in order for the firm to prevent an
individuals stock of knowledge from disturbing the continuity and regularity
of its operation, and provide a context in which to convey knowledge[67].
As such, legitimation becomes a restrictive factor on the development of new
social knowledge. For example, Brown and Duguid[104], building on Orr[105],
describe how service technicians maintaining a complex machine are
constrained by corporate maintenance procedures in their search for new
information. According to the management, their (legitimate) knowledge
should be captured in corporate documents (third legitimation level) and
experimental behaviour may be perceived as counterproductive.
Firm members seldom have access through organizational memory[106] to
the historical grounds for legitimation[67]. Thus, the four levels of legitimation
may very seldom be questioned. For example, the service technicians may find
it impossible to ask why the current maintenance procedures were installed in
the first place.
The task system of the firm
The task system of the firm is composed of all value creating tasks and their
relationships. When analysing a task system it is the nature of the task rather
than the roles and division of labour that is in focus.
Campbell[107], in support, of among others, March and Simon[108], proposes
that tasks vary in degree of complexity. Tasks are bearers of information and as
such they are subject to four sources of complexity. First, there may be multiple
resolution paths leading to the desired end. Second, a task may have multiple
desired end states. Third, there may be conflicting interdependencies between
these end states. Fourth, there may be uncertainty of probabilistic linkages
between the resolution process and the desired end state[107,109]. These
sources of complexity shape each single task as well as the task system that
confronts the individual, group or firm.
When addressing the task system of the firm in the view of the four
complexity sources, we may think of the principles of bureaucracy and rational
administration of Max Weber. Weber[110] proposed that the effective
bureaucracy is typically characterized by a stable temporal horizon: continuity
and regularity in task resolution, a hierarchy, and files of information and
communication between members of the firm. From the criticism of this
view[111,112], an emerging conclusion is that some firms cannot function
effectively as bureaucracies due to the number of exceptions in their task
system[113,114]. A conception of the task system should thus be complemented
by a temporal dimension in order to capture the various degrees of dynamism.
In a longitudinal perspective, tasks differ in their variability. Task variability
characterizes a string of tasks which face an individual, a group, or a firm. It is

Knowledge,
competence and
strategy
65

Personnel
Review
24,3
66

defined as the number of exceptions encountered in the characteristic of the

work[115, p. 160]. Complex tasks may or may not endure over time. If they
endure, repetitive attempts to resolve the task are allowed for, and the
increasing information from these repetitive attempts may reduce task
complexity. Information is gained on the various end states and the link
between various resolution paths and end states. This may gradually allow for
recognition of the possible and desired task resolution paths and end states, as
well as the evolution of principles for resolving conflicts between
interdependent end states[116]. If task variability is high, however, by definition
task complexity will not be reduced in the course of time.
Competence configuration
The firm can be understood as a portfolio of competences. Taking as a starting
point the two dimensions of competence, knowledge (including skills) and tasks,
a matrix can be constructed as in Figure 1. We call this the competence
configuration of a firm.
The firm has a set of tasks with varying degrees of complexity. These tasks
are attended to by individual members of the firm or by various co-operative
arrangements where tasks are given to a group, department, or division. In
many instances, firm tasks are so complex that such co-operative arrangements
are necessary for their satisfactory solution[117].
Competence on the subjective level requires that a task is identified, observed,
perhaps analysed and understood by using subjective knowledge; and that the
individual uses certain skills to resolve it. On the social level a task is attended to
by using social knowledge, shared on a group, departmental or firm level, or it
may be public. The task can be resolved physically using skills commonly
available throughout a group, firm, or community of firms.
The competence configuration provides a snapshot of a firm in that it shows
the various forms of knowledge and skills employed in task resolution and where
they are located. But the matrix also has another and more important purpose.
It gives a basis for discussing the creation and evolution of competences in a firm
and how the firm sustains or shares these with other firms. Before attending to

Tasks

High
complexity

Figure 1.
Competence
configuration

Low
complexity

Subjective
knowledge

Social knowledge
Group

Department

Firm

Public

Knowledge,

the strategic issues related to competence, we would first like to draw attention
competence and
to the evolution of competences as illustrated in Figure 2.
strategy
Competence evolves through an interplay between task execution and
knowledge acquisition. As they engage in task resolution, individuals may
gradually acquire knowledge about the task (belonging to the individual, group,
etc.). If the task is repetitive, knowledge acquisition may gradually reduce task
67
complexity for the task performer. Further, an individuals knowledge of the
task and how to solve it can be conveyed to other firm members. The knowledge
can be conveyed through various means of objectivation and, following the
previous discussion, it has to be legitimate in the firm context. Knowledge made
social enters into the stock of knowledge of other individuals and may
contribute to their own (or the groups) task resolution process. In the case of
repetitive tasks (e.g. the same tasks given to several individuals), the emerging
social knowledge may reduce task complexity for the task performers.
At this point, a new question emerges. Does the kind of interactional or social
context play a role for the evolution of a firms competences into a particular
configuration? We believe it does. Consider the following example:
Harold Geneen, the former head of ITT, discovered that his response to the European
subsidiaries of ITT was different if they made their request by teltype to him in New York
versus talking face to face with him in Europe. In New York, I might read a request and say
no. But in Europe, I could see that the answer to the same question might be yes[118].

Geneens knowledge clearly changed when knowledge was conveyed to him in

personal interaction versus an information system. In order to capture the role
of social context, we propose that there are at least three generic contexts of
competence evolution:
(1) the co-evolutionary context (we could also term this to learn from
learners);
(2) the differentiated context; and
(3) the detached context.
In the co-evolutionary context, a firm member, A, observes the task resolution
process of another, B, including trials and errors. B may convey immediate

Tasks

Subjective
knowledge

Social knowledge
Group

Department

Firm

Public

High
complexity

Knowledge objectivation
Knowledge legitimation
Low
complexity

Task variability

Figure 2.
Competence evolution

Personnel
Review
24,3
68

experiences, more stable knowledge and skills, through speech, body

movement, or by using and producing tools and marks. In the differentiated
context, knowledge is still conveyed from one firm member to another through
a process of personal interaction, but via a temporal differentiation. A no longer
observes the task and the task resolution process (including trials and errors) of
B. Finally, in the detached context, the firm members are temporally and
spatially differentiated in the competence evolution. Knowledge is conveyed in
books, drawings, photographs, telefaxes, tools, marks, recorded tapes, etc. and
in their subsequent use they are detached spatially and temporally from their
source of origin.
Implications
The obvious implications from this article for personnel management research
stem from the theoretical development of the concept of a firms competences
and how they evolve, as well as the process by which they can be imitated. First,
competence is critical to a firms performance and survival because it provides
perhaps the best basis for developing competitive advantage; it is difficult to
imitate. The strategic management literature discusses firm performance in
terms of the firms ability to cope with its strategic issues, including threats,
opportunities, and stakeholder demands[119-120]. In this sense, competence,
synthesizing the strategic issue (task) and the managerial skills and other parts
of managerial stock of knowledge, can have a particular strategic value.
Inspired by the competence-based perspective, subsequent studies would have
the potential of uncovering:
(1) the role of subjective versus social knowledge in resolving strategic
issues;
(2) the type of legitimation that would constrain sharing managerial
experiences valuable to the strategic process; and
(3) the most effective and/or most frequent means of conveying managerial
experiences (in particular the role of face-to-face conversations on
strategy) in creating social knowledge[121-124].
Furthermore, Barney[9] discusses emergent strategy and formal planning
systems as corporate resources. The competence-based perspective would
support that emergent strategy[125], in the sense of being a stream in a pattern
of actions[126], may be a response to threats and opportunities at the grass
roots level of the firm. Emergent strategy may indicate a local competence in
the conveyance of some subjective knowledge, e.g. a worker developing and
sharing a commercially viable innovation in the production process. The further
dissemination of knowledge and thus, the evolution of an emergent strategy,
must be analysed in terms of the legitimation processes of the firm. In his
normative efforts, Mintzberg[127] suggests that management should allow for
emergent strategies to evolve. The competence-based perspective would
complement this by suggesting that management should assess, and if

necessary attempt to change legitimation on the four levels discussed in this

article.
The competence-based perspective also suggests that the formal planning
systems of a firm are important in the evolution of competences. Moreover,
these systems may be a source of sustainable competitive advantage if they
disseminate social knowledge thoroughly to where it is needed; for example,
channelling knowledge about changes in industry from corporate planners to
heads of divisions. Research shows that many firms engage in strategic
planning exercises[128,129] which are commonly available and that resemble
each other[9,130]. An implication from the perspective presented here is that
such systems can be difficult to imitate in local use. The strategic planning
system can provide legitimation and means of objectivation dependent on the
competences of the firm, and it is associated with particular skills of carrying
out planning.
Following the competence-based perspective, personnel management theory
and research should also be supplemented with a more precise outline of the
context of imitation. For example, in the studies of strategic intra-firm cooperation, such as franchising, joint ventures, equity agreements, co-operative
ventures, alliances[131] and acquisitions, an emerging issue is whether or not it
is possible to lose proprietary competences to a partner[36,54]. The competencebased perspective implies that intra-firm co-operation and competition must be
studied in three contexts of imitation (see the section on the imitation process),
each having its own significance when it comes to certain opportunities and
threats surrounding the protection of proprietary competences. Future work
should identify firms modes of co-operating and/or competing in these three
contexts, and then proceed to investigate how competence co-evolves or evolves
at different paces in the dyad of the two firms. The legitimation processes of
each firm, mutual access to task resolution processes, personal interaction
among firm members, the available means of conveying knowledge, and task
complexity and variability should all play an important role in these
investigations. The emergence of an increasingly robust theory of dyadic
intra-firm co-operation and competition must pay attention to these contextual
factors.
Space allows for only a short treatment of empirical research tactics. It is
sufficient to note that an empirical research programme with the ambition of
verifying or improving the propositions of this work should first of all study the
practices of some selected firms[132,133], on the constant comparative method.
Starting from the recognition that social knowledge, even public, has its roots in
individual thinking and actions[134], such studies may allow for longitudinal
mapping of individually and socially-based competences, including
deliberating and inhibiting factors on competence evolution. A major research
output may be a list of indicators of latent constructs, such as objectivation,
legitimation, task variability, and social context for the evolution and imitation
of competences. Based on such indicators, then, the research programme should
proceed to verify the relative importance of such latent constructs empirically.

Knowledge,
competence and
strategy
69

Personnel
Review
24,3
70

Appropriate methodologies for studying relationships between latent variables

are some of the second generation multivariate statistics methods[135-138],
for instance, maximum likelihood or partial least squares estimation of latent
variables. See Fornell et al.[139] for an example of the use of PLS estimation in
the context of strategic management.
Finally, it should also be noted that an in-depth empirical examination of the
concepts of this article, due to the volatility and the latency of subjective and
possible social knowledge and possible differences in task conceptions,
introduces measurement problems not easily handled by the above described
methods[8,40,140]. A methodology which takes seriously the challenge of
studying the process of social knowledge construction and, thus, the
phenomenon of drifting competences, is the interpretive interactionist
approach[141-143]. This approach attempts to join traditional symbolic
interactionist thought with participant observation, naturalistic studies,
creative interviewing, and the case study method. In combining several
research perspectives it gives the advantage of studying (and interpreting) the
role of personal interaction and forms of expression in competence evolution
and the interpretation processes of those observed, as well as the structures to
competence development given by legitimation.
As we argue in this article, competence development and competitive
advantage are closely related, personnel managers need to be actively involved
in the strategy formation. Above all, issues of expertise development,
management training, staffing, internal job markets, job rotation and career
development should be seen in a strategic perspective. Perhaps the knowledge
base of a firm should give premisses for the development of the competitive
strategy, rather than let human resource management follow simply the
strategic decree.
Notes and references
1. Chamberlin, E., The Theory of Monopolistic Competition, Harvard University Press,
Cambridge, MA, 1939.
2. Hofer, C.W. and Schendel, D., Strategy Formulation: Analytical Concepts, West, St. Paul,
MN, 1978.
3. Porter, M.E., Competitive Strategy, Free Press, New York, NY, 1985.
4. Barney, J., Types of competition and the theory of strategy: toward an integrative
framework, Academy of Management Review, Vol. 11 No. 4, pp. 791-800.
5. Ghemawat, P., Sustainable advantage, Harvard Business Review, September-October
1986.
6. Williams, J.R., How sustainable is your competitive advantage?, California Management
Review, Vol. 34 No. 3, Spring 1992, pp. 29-51.
7. Lippman, S. and Rummelt, R., Uncertain imitability: an analysis of interfirm differences
in efficiency under competition, Bell Journal of Economics, Vol. 13 No. 2, 1982, pp. 418-38.
8. Reed, R. and DeFillippi, R., Casual ambiguity, barriers to imitation, and sustainable
competitive advantage, Academy of Management Review, Vol. 15 No. 1, 1990, pp. 88-102.
9. Barney, J., Firm resources and sustained competitive advantage, Journal of
Management, Vol. 17 No. 1, 1991, pp. 99-120.

10.
11.
12.
13.
14.
15.
16.
17.

18.
19.
20.

21.
22.

23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.

Penrose, E., The Theory of the Growth of the Firm, Wiley, New York, NY, 1958.
Ackoff, R., A Concept of Corporate Planning, John Wiley, New York, NY, 1970.
Daft, R., Organization Theory and Design, West, New York, NY, 1983.
Grant, R.M., The resource-based theory of competitive advantage: implications for
strategy formulation, California Management Review, Spring 1991, pp. 114-35.
Teece, D.J., Pisano, G. and Shuen, A., Firm capabilities, resources and the concept of
strategy, working paper, University of California at Berkeley, CA, 1990.
Mahoney, J.T. and Pandian, R., The resource-based view within the conversation of
strategic management, Strategic Management Journal, Vol. 13 No. 5, 1992, pp. 363-80.
Bain, J., Barriers to New Competition, Harvard University Press, Cambridge, MA, 1956.
Caves, R.E. and Porter, M.E., From entry barriers to mobility barriers: conjectural
decisions and contrived deterrence to new competition, Quarterly Journal of Economics,
Vol. 91, 1977, pp. 241-62.
Porter, M.E., Competitive Strategy, Free Press, New York, NY, 1980.
Ansoff, H.I., Corporate Strategy, McGraw-Hill, New York, NY, 1965.
Conner, K., A historical comparison of resource-based theory and five schools of thought
within industrial organizational economics: do we have a new theory of the firm?,
Journal of Management, Vol. 17 No. 1, 1991, pp. 121-54.
Day, G.S., Strategic Market Planning: The Pursuit of Competitive Advantage, West, St.
Paul, MN, 1984.
McWilliams, A. and Smart, D., Incorporating demand dynamics into our theory of
competitive advantage: an extension of the resource-based view of the firm, Working
paper, Graduate School of Business Administration, Texas A&M University, College
Statatown, TX, 1992.
Andrews, K.R., The Concept of Corporate Strategy, Dow Jones Irwin, Homewood, IL, 1971.
Porter, M.E., statement made during a plenary session at the 11th annual Strategic
Management Society conference, Toronto, 23-26 October 1991.
Wernerfelt, B., A resource-based view of the firm, Strategic Management Journal, Vol. 5
No. 12, 1984, pp. 171-80.
Barney, J. and Ouchi, W.G., Organizational Economics, Jossey-Bass, San Francisco, CA,
1986.
Dietrickx, L. and Cool, K., Asset stock accumulation and sustainability of competitive
advantage, Management Science, Vol. 35 No. 12, 1989, pp. 1514-30.
Rummelt, R.P., Strategy, Structure, and Economic Performance, Harvard University Press,
Cambridge, MA, 1974.
Williamson, O.E., Markets and Hierarchies, Free Press, New York, NY, 1975.
Tomer, J.F., Organizational Capital: The Path to Higher Profitability and Well-being,
Praeger, New York, NY, 1987.
Becker, G.S., Human Capital, Columbia, New York, NY, 1964.
Yip, G., Barriers to Entry: A Corporate Strategy Perspective, Lexington, Lexington, MA,
1982.
Itami, H., Mobilizing Invisible Assets, Harvard University Press, Cambridge, MA, 1987.
Hamel, G. and Prahalad, S., The core competence of the corporation, Harvard Business
Review, May-June 1990, pp. 79-91.
Stalk, G., Evans, P. and Schulman, L.E., Competing on capabilities: the new rules of
corporate strategy, Harvard Business Review, March-April 1992, pp. 57-69.
Badaracco, J.L., Knowledge Link: How Firms Compete through Strategic Alliances,
Harvard Business School Press, Boston, MA, 1991.

Knowledge,
competence and
strategy
71

Personnel
Review
24,3
72

37. Cohen, M. and Levinthal, D., Absorptive capacity: a perspective on learning and
innovation, Administrative Science Quarterly, Vol. 35 No. 1, 1990, pp. 128-52.
38. Huff, A.S., Industry influence on strategy reformulation, Strategic Management Journal,
Vol. 3 No. 2, 1982, pp. 119-31.
39. Prahalad, C.K. and Bettis, R., The dominant logic: a new linkage between diversity and
performance, Strategic Management Journal, Vol. 7 No. 6, 1986, pp. 485-501.
40. Fiol, C.M., Managing culture as a competitive resource: an identity-based view of
sustainable competitive advantage, Journal of Management, Vol. 17 No. 1, 1991, pp. 191-211.
41. Shoemaker, P.J.H., Strategy, complexity and economic rent, Management Science, Vol. 36
No. 10, 1990, pp. 1178-92.
42. Teece, D.J., Economics of scope and the scope of the enterprize, Journal of Economic
Behavior and Organization, Vol. 1 No. 3, 1980, pp. 223-47.
43. Castanias, R.P. and Helfat, C.E., Managerial resources and rents, Journal of
Management, Vol. 7 No. 1, 1991, pp. 155-71.
44. The debate in the letters to the editor section of the May-June issue of the Harvard
Business Review, 1992, illustrates the apparent confusion regarding the meaning of some
of the most frequently used concepts. Triggered by the frustration of three practitioners,
Hamel and Prahalad, on the one hand, claimed that the distinction between competences
and capabilities is purely semantic. In their reply, on the other hand, Stalk et al.[35]
provided a number of examples and argued that there is a real difference between these
concepts! This discourse resembles a transition from one paradigm in crisis to a new one.
As pointed out by Kuhn[45, p. 85], such reconstruction changes some of the fields most
elementary theoretical generalizations. Perhaps the use of many words indicates that there
are no major differences because it all originates from economics. As Feyerabend[46, p. 24]
stated: where the arguments do seem to have an effect, this is more often due to their
physical repetition then their semantic content.
45. Kuhn, T.S., The structure of scientific revolutions, University of Chicago, Chicago, IL,
1972.
46. Feyerabend, P.K., Against Method, Verso, London, 1975.
47. Rummelt, R.P., Toward a strategic theory of the firm, in Lanb, R. (Ed.), Competitive
Strategic Management, Prentice-Hall, Englewood Cliffs, NJ, 1984, pp. 137-58.
48. Nelson, R. and Winter, S., An Evolutionary Theory of Economic Change, Belknap Press,
Cambridge, MA, 1982.
49. Slvell, ., Entry barriers and foreign penetration, doctoral dissertation, Institute of
International Business/Stockholm School of Economics, Stockholm, 1987.
50. Teece, D.J., Profiting from technological innovation: implications for integration,
collaboration, licensing, and public-policy, Research Policy, Vol. 15 No. 16, 1986, pp. 285305.
51. Hitt, M.A. and Ireland, R.D., Corporate distinctive competence, strategy, industry, and
performance, Strategic Management Journal, Vol. 6 No. 13, 1985, pp. 273-93.
52. Herriot, S., March, J. and Levithal, D., Learning from experience in organizations, in
March, J.G. (Ed.), Decision and Organizations, Blackwell, London, 1988, pp. 187-219.
53. Winter, S., Knowledge and competence as strategic assets, in Teece, D., The Competitive
Challenge, Ballinger, Cambridge, MA, 1988, pp. 158-84.
54. Hamel, G., Competitive for competence and interpartner learning within international
alliances, Strategic Management Journal, Vol. 12, Summer, 1991, pp. 83-103.
55. Geertz, C., Local Knowledge, Basic Books, New York, NY, 1983.
56. There is always a risk of making ambiguous theorizing and interpretations of empirical
material by applying an experience-near concept. Bittner[57] discusses the danger
involved in using experience-near concepts in organizational analysis. In his view, there

57.
58.
59.
60.

61.
62.
63.

64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.

75.
76.
77.
78.
79.
80.

is nothing wrong with borrowing a common sense concept for the purpose of (theory
building). The point at which the use of common sense concepts becomes a transgression
is where such concepts are expected to do the analytical work for theoretical concepts
(p. 70). To avoid using tools for analysis which lead to flawed explanations, we feel that it
is necessary to let concepts like competence and knowledge be subject to some further
theoretical inquiry.
Bittner, E., The concept of organization, in Turner, R. (Ed.), Ethomethodology: Selected
Readings, Penguin, Harmondsworth, 1974, pp. 267-311.
Websters Third New International Dictionary, Meriam-Webster, Chicago, IL, 1981.
Roos, J. and von Krogh, G., Figuring out your competenence configuration, European
Management Journal, Vol. 10 No. 4, December 1992, pp. 171-8.
Stubbart, C.I. and Ramaprasad, A., Comments on the empirical articles and
recommendations for future research, in Huff, A. (Ed.), Mapping Strategic Thought,
Wiley, New York, NY, 1990, pp. 251-91.
Goodenough, W.H., Componential analysis and the study of meaning, Language, Vol. 32,
1957, pp. 195-226.
Weick, K.E., The Social Psychology of Organizing, Random House, New York, NY, 1979.
Weick, K.E., Organizational communication: towards a research agenda, in Putnam, L.
and Pacanowsky, M.E. (Eds), Communication and Organizations: An Interpretive
Approach, Sage, Beverley Hills, CA, 1983, pp. 13-31.
Habermas, J., Knowledge and Human Interest, Heinemann, London, 1971.
Simon, H., Administrative Behavior, Macmillan, New York, NY, 1957.
Anderson, J.R., The Architecture of Cognition, Harvard University Press, Cambridge, MA,
1983.
Berger, P. and Luckman, T., The Social Construction of Reality, Penguin, New York, NY,
1967.
Schutz, A. and Luckman, T., The Structures of the Life-world, Northwestern University
Press, Evanston, 1985 (reprint from 1973).
Schutz, A. and Luckman, T., The Structures of the Life-world, Volume II, Northwestern
University Press, Evanston, IL, 1989.
Schutz, A., On Phenomenology and Social Relations, University of Chicago Press, Chicago,
IL, 1970.
Habermas, J., Theory and Practice, Beacon, Boston, MA, 1973.
Popper, K., Objective Knowledge: An Evolutionary Approach, Clarendon, Oxford, 1972.
Popper, K. and Eccles, J.C., The Self and Its Brain: An Argument for Interactionism,
Springer, New York, NY, 1984.
Hedberg, B., Starbuck, W. and Nystrom, P., Camping on the seesaws: prescriptions for
designing self-designing organizations, Administrative Science Quarterly, Vol. 21 No. 1,
1976, pp. 41-65.
Smircich, L., Concepts of culture and organizational analysis, Administrative Science
Quarterly, Vol. 28 No. 3, 1983, pp. 339-58.
McCarthy, T., The Critical Theory of Jurgen Habermas, MIT, Boston, MA, 1981.
Hayek, F.A., The use of knowledge in society, American Economic Review, Vol. 25, 1945,
pp. 519-30.
Hayek, F.A., Nobel memorial lecture: the pretence of knowledge, Swedish Journal of
Economics, Vol. 77 No. 4, 1975, pp. 432-42.
Habermas, J., The Theory of Communicative Action, Beacon, Boston, MA, 1984.
Berger, P., The Sacred Canopy, Doubleday, Garden City, NY, 1967.

Knowledge,
competence and
strategy
73

Personnel
Review
24,3
74

81. Polanyi, M., Personal Knowledge: Towards a Post Critical Philosophy, Routledge, London,
1962.
82. Polanyi, M., The Tacit Dimension, Anchor, Garden City, NY, 1967.
83. This may be partly rooted in psychological processes. For instance Gedo[84] describes
how extremely talented musicians and novelists are unable to perform due to difficult
experiences in their childhood in which their attempts to perform were aborted by
authoritative figures.
84. Gedo, J.E., More on creativity and its vicissitudes, in Runco, M.A. and Albert, R.S. (Eds),
Theories of Creativity, Sage, Newbury Park, CA 1990, pp. 35-46.
85. Hedberg, B., How organizations learn and unlearn, in Nystrom, P.C. and Starbuck, W.
(Eds), Handbook of Organizational Design, Volume I, Oxford University Press, New York,
NY, 1981.
86. Sackman, S.A., Cultural Knowledge in Organizations: Exploring the Collective Mind, Sage,
Newbury Park, CA, 1991.
87. Daft, R. and Weick, K.E., Toward a model of organizations as interpretation systems,
Academy of Management Review, Vol. 9 No. 2, 1984, pp. 284-95.
88. This consensus-oriented view is analogous to the so-called integration perspective in
studies of organizational culture[89], for example represented by Deal and Kennedy[90]
and Schein[91]. Alternative conceptions of organizational culture emphasize the role of
cultural fragmentation where consensus is lacking and organizational history is
ambiguous, for example represented by Van Maanen and Barley[92] and Weick[93].
Analogously, one could conceive of knowledge fragmentation in organizations where
individuals and groups represent highly differentiated stocks of knowledge. For more on
this see Sackman[85].
89. Frost, P.J., Moore, L.F., Louis, M.R., Lundberg, C.C. and Martin, J. (Eds), Reframing
Organizational Culture, Sage, Newbury Park, CA, 1991.
90. Deal, T. and Kennedy, A., Corporate Cultures, Addison-Wesley, Reading, MA, 1982.
91. Schein, E.H., Organizational Culture and Leadership: A Dynamic View, Jossey-Bass, San
Francisco, CA, 1985.
92. Van Maanen, J. and Barley, S., Cultural organization: fragments of a theory, in Frost, P.J.,
Moore, L.F., Louis, M.R., Lundberg, C.C. and Martin, J. (Eds), Organizational Culture, Sage,
Beverly Hills, CA, 1986.
93. Weick, K.E., The vulnerable system: an analysis of the Tenerife air disaster, Journal of
Management, Vol. 16 No. 13, 1990, pp. 571-93.
94. Crozier, M., The Bureaucratic Phenomenon, Tavistock, London, 1964.
95. Morgan, G., Images of Organization, Sage, Beverly Hills, CA, 1986.
96. Forester, J., Critical ethnography: on fieldwork in a Habermasian way, in Alvesson, M.
and Willmott, H. (Eds), Critical Management Studies, Sage, London, 1992, pp. 46-66.
97. Walker, T., Whose discourse?, in Woolgar, S. (Ed.), Knowledge and Reflexivity: New
Frontiers in the Sociology of Knowledge, Sage, London, 1991, pp. 55-80.
98. Pfeffer, J. and Salancik, G., The External Control of Organizations: A Resource Dependence
Perspective, Harper & Row, New York, NY, 1978.
99. Parsons, T., Suggestions for a sociological approach to the theory of organizations,
Administrative Science Quarterly, Vol. 1, 1956, pp. 63-85.
100. Parsons, T., Structures and Process in Modern Societies, Free Press, Glencoe, IL, 1960.
101. Spender, J., Industry Recipes, Wiley, New York, NY, 1990.
102. See DeLacroix et al.s[103] assertion that most business organizations need not concern
themselves with the legitimacy of their activities and their place in modern society.

103. Delacroix, J., Swaminathan, A. and Solt, M., Density dependence versus population
dynamics: an ecological study of failings in the Californian wine industry, American
Sociological Review, Vol. 54 No. 2, 1989, pp. 245-62.
104. Brown, J.S. and Duguid, P., Organizational learning and communities-of-practice: toward
a unified view of working, learning, and innovation, Organization Science, Vol. 2, 1991,
pp. 40-57.
105. Orr, J., Sharing knowledge, celebrating identity: war stories and community memory in a
service culture, in Middleton, D.S. and Edwards, D. (Eds), Collective Remembering:
Memory in Society, Sage, Beverly Hills, CA, 1990.
106. Walsh, J.P. and Ungston, G.R., Organizational memory, Academy of Management
Review, Vol. 16 No. 1, 1991, pp. 57-91.
107. Campbell, D.J., Task complexity: a review and analysis, Academy of Management
Review, Vol. 13 No. 1, 1988, pp. 40-52.
108. March, J.G. and Simon, H.A., Organizations, Wiley, New York, NY, 1958.
109. Thompson, J., Organizations in Action, McGraw-Hill, New York, NY, 1967.
110. Weber, M., The Theory of Social and Economic Organization, Oxford University Press,
New York, NY, 1946.
111. Stinchcombe, A., Stratification and Organization, Norwegian University Press, Oslo,
1986.
112. Perrow, C., Complex Organizations: A Critical Essay, Random House, New York, NY, 1972.
113. Perrow, C., Organizational Analysis: A Sociological View, Wadsworth, Belmont, CA, 1970.
114. Lynch, B.P., An empirical assessment of Perrows technology construct, Administrative
Science Quarterly, Vol. 19 No. 3, 1974, pp. 338-56.
115. Van de Ven, A. and Ferry, D.L., Measuring and Assessing Organizations, Wiley, New York,
NY, 1980.
116. Unfortunately, research shows that this is not always so. Many organizations try to
capture successful resolution of complex tasks in formal procedures. These in turn may
reduce the amount of information given to task performers, and thereby prevent flexibility
in coping with unexpected changes in the tasks[104].
117. Ginsberg, A., Connecting diversification to performance: a socio-cognitive approach,
Academy of Management Review, Vol. 15 No. 13, 1990, pp. 514-35.
118. Sproull, L. and Kiesler, S., Connections: New Ways of Working in the Networked
Organization, MIT Press, Cambridge, MA, 1991.
119. Ansoff, H.I., Strategic issue management, Strategic Management Journal, Vol. 1 No. 2,
1980, pp. 131-48.
120. Dutton, J.E. and Jackson, S.E., Categorizing strategic issues, Academy of Management
Review, Vol. 12 No. 1, 1987, pp. 76-90.
121. Priem, R., Top management team group factors, consensus, and firm performance,
Strategic Management Journal, Vol. 11 No. 6, 1990, pp. 478-96.
122. Westley, F.R., Middle managers and strategy: microdynamics of inclusion, Strategic
Management Journal, Vol. 11 No. 5, 1990, pp. 337-51.
123. Bowman, C., Shared understanding of strategic priorities, paper presented at the
Strategic Management Society Conference, Stockholm, 1990.
124. Schilit, W.K., A comparative analysis of strategic decisions, Journal of Management
Studies, Vol. 27 No. 5, 1990, pp. 435-61.
125. Mintzberg, H., Strategy making in three modes, California Management Review, Vol.
XVI No. 2, 1973, pp. 44-53.
126. Mintzberg, H. and Waters, J., Of strategies, deliberate and emergent, Strategic
Management Journal, Vol. 6 No. 13, 1985, pp. 257-72.

Knowledge,
competence and
strategy
75

Personnel
Review
24,3
76

127. Mintzberg, H., The design school: reconsidering the basic premises of strategic
management, Strategic Management Journal, Vol. 11, pp. 171-95.
128. Lorange, P., Corporate Planning: An Executive Viewpoint, Prentice-Hall, Englewood Cliffs,
NJ, 1980.
129. Kudla, R.J., The effects of strategic planning on common stock returns, Academy of
Management Journal, Vol. 23 No. 1, 1980, pp. 5-20.
130. Bourgeois, L.J. and Brodwin, D.R., Strategic implementation: five approaches to an
elusive phenomenon, Strategic Management Journal, Vol. 5 No. 3, 1984, pp. 241-64.
131. Contractor, F. and Lorange, P., Cooperative Strategies in International Business, Lexington
Books, MA, 1988.
132. Yin, R.K., Case Study Research, Sage, Beverly Hills, CA, 1984.
133. Glaser, B.G. and Strauss, A.L., The Discovery of Grounded Theory, Aldine, Chicago, IL,
1967.
134. Holmes, R., Person, role and organization: some constructive notes, in Hassard, J. and
Pym, D. (Eds), Theory and Philosophy of Organizations, Routledge, London, 1990, pp. 198219.
135. Bollen, K.A., Structural Equations with Latent Variables, John Wiley, New York, NY, 1989.
136. Fornell, C. (Ed.), A Second Generation of Multivariate Analysis, Vols. 1-2, Praeger, New
York, NY, 1982.
137. Jreskog, K.G. and Wold, H., Systems under indirect observation, Causality Structure
Prediction (Part I-II), North Holland, Amsterdam, 1982.
138. Wold, H. (Ed.), Theoretical Empiricism, Paragon House, New York, NY, 1989.
139. Fornell, C., Lorange, P. and Roos, J., The cooperative venture formation process: a latent
variable structure modeling approach, Management Science, Vol. 36 No. 10, 1990,
pp. 1246-55.
140. Donaldson, L., A rational basis for criticism of organization economics: a reply to
Barney, Academy of Management Review, Vol. 15 No. 3, 1990, pp. 394-401.
141. Denzin, N.K., Interpretive Interactionism, Sage, Newbury Park, CA, 1989.
142. Denzin, N.K., Interpretive interactionism, in Morgan, G. (Ed.), Beyond Method: Strategies
for Social Research, Sage, Newbury Park, CA, 1983, pp. 129-47.
143. Denzin, N.K. and Keller, C.M., Frame analysis reconsidered, Contemporary Sociology,
Vol. 10, 1981, pp. 52-60.