Building upon and extending the RBV, the Knowledge-based View of Firm (KBV) argues that knowledge implies sustainable heterogeneous resource distribution, and is deeply idiosyncratic, hard to transfer and imitate (Venzin et al., 1998), and consequently posits that the knowledge-based asset may produce long term sustainable competitive advantage (Alavi and Leidner, 2001; Kalling, 2003). Accordingly, knowledge is considered a type of intangible asset which an organisation should utilise to obtain competitive advantage (Zhou and Fink, 2003). Thus, from a strategic perspective, knowledge is defined as a justified belief that increases an entity’s capacity for effective action (Nonaka and Takeuchi, 2004), and can be viewed as a valuable strategic asset in a form of organisational capability with potential for influencing future actions (Alavi and Leidner, 2001; Chou, 2005; Kakabadse et al., 2003).
Knowledge is typically classified as either tacit or explicit. Tacit knowledge, which draws on the accumulated experience and learning of a person (Debowski, 2006: 18), is personal and, therefore, difficult to formalise, communicate and share with others (Nonaka and Takeuchi, 2004). Although tacit knowledge is hard to document, categorise and share, organisations depend on it to ensure good-quality choice and judgements. Within an organisational setting, a high level of tacit knowledge, which is developed by staff through their experience, learning and ongoing investigation of sources, is difficult to be translated into a tangible product or process. This raises two key issues for KM: how to identify who holds such knowledge; and how to enable others to access it when they need it (Debowski, 2006: 18). Articulation of tacit knowledge is a key factor in the process of creating new knowledge, which is usually driven by organisational intention to develop its internal capabilities to meet both current and future needs (McCann and Buckner, 2004).