According to Dasgupta and Gupta “The increasing turbulence in the external business environment has focused attention on the resources and organizational capabilities as the principal source of competitive advantage.” (2009, p.204).
Discuss with reference to appropriate literature sources, the...
UU-MBA712 Theories of Management
Assessment 2
Student Number: R1811D6833581
March 2019
1
, How the creation and management of knowledge is central to the resource-based
view of competitive advantage
In today’s competitive environment, where many organisations are striving to be
superior to their rivals, it has been discovered that the creation, sharing and
application of knowledge is essential when striving to achieve a competitive
advantage. One way to determine if an organisation has a competitive advantage is
to use the resource-based view and the VRIO framework developed by Professor
Jay Barney. Another framework which is useful for investigating the nature of
competition within an industry is the Five Forces Model devised by Professor
Michael Porter. The aim of this paper is to discuss these frameworks and to identify
the degree to which knowledge, the management of knowledge, and the
encouragement of creativity is crucial to building a competitive advantage in the
marketplace.
Many industries accept that knowledge is a valuable asset in their organisations.
Predicting how successful and sustainable an organisation will become depends on
how knowledge is shared, obtained and managed over time. In recent years there
has been an enormous expansion of knowledge management principles, practices
and procedures. This expansion has also influenced the development of knowledge
management systems in its many different forms. Essentially, knowledge
management involves generating value from an organisations intellectual property
and knowledge-based assets, and can be referred to as the intersection where
people, processes and technology meet. Knowledge management is about enabling
organisations to become more effective by making the best use of what they know.
Every business relies on knowledge to make good decisions, to be innovative, and to
be creative, including learning from past experiences and avoiding making the same
mistakes in the future.
From the early 1990s through 2015, most research concerned with the field of
strategic management was dominated by the resource-based theory. Many other
fields such as human resource management, information technology and supply
chain management were also influenced by this concept (Barney & Wright, 1998).
2
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