Making knowledge the basis of a dynamic theory of the firm

TLDR

Knowledge is a problematic concept for building a dynamic theory of the firm, and existing resource‑based and evolutionary views do not explain how it is contained; scholars such as Nelson and Winter, Nonaka and Takeuchi, and Callon and Latour have highlighted its dynamic, process‑oriented nature within actor networks. The study aims to simplify the theory by revisiting sociotechnical systems theory, adopting three social‑constructionist heuristics, and distinguishing systemic from component attributes of actor networks. The authors construct a multitype epistemology that includes pre‑ and subconscious knowing and collective social knowledge, then simplify the approach by revisiting sociotechnical systems theory, adopting three social‑constructionist heuristics, and distinguishing systemic from component attributes of actor networks. The resulting theory offers a different mode of theorizing that serves as a tool for managers to locate their role within the firm as a dynamic knowledge‑based activity system rather than an objective description of firms.

Abstract

Abstract Knowledge is too problematic a concept to make the task of building a dynamic knowledge‐based theory of the firm easy. We must also distinguish the theory from the resource‐based and evolutionary views. The paper begins with a multitype epistemology which admits both the pre‐ and subconscious modes of human knowing and, reframing the concept of the cognizing individual, the collective knowledge of social groups. While both Nelson and Winter, and Nonaka and Takeuchi, successfully sketch theories of the dynamic interactions of these types of organizational knowledge, neither indicates how they are to be contained. Callon and Latour suggest knowledge itself is dynamic and contained within actor networks, so moving us from knowledge as a resource toward knowledge as a process. To simplify this approach, we revisit sociotechnical systems theory, adopt three heuristics from the social constructionist literature, and make a distinction between the systemic and component attributes of the actor network. The result is a very different mode of theorizing, less an objective statement about the nature of firms ‘out there’ than a tool to help managers discover their place in the firm as a dynamic knowledge‐based activity system.