SM_L5

Question 1

What is knowledge according to the Knowledge‑Based View?

Answer 1

• Justified true belief that confers the capacity to act.
• Enables transformation of data & information into ideas and decisions.
• Can be explicit or tacit, individual or social.

Question 2

Differentiate data, information and knowledge.

Answer 2

• Data: basic building blocks (e.g., sales, industry figures).
• Information: data arranged into meaningful patterns.
• Knowledge: justified true belief that powers decision‑making.

Question 3

Why is knowledge considered the key economic resource?

Answer 3

• Peter F. Drucker (1997): “The basic economic resource … is and will be knowledge.”

Question 4

Contrast tacit and explicit knowledge.

Answer 4

• Tacit: personal, hard to articulate, revealed through application.
• Explicit: documented, easily communicated & stored.

Question 5

Identify the three core knowledge processes in a firm.

Answer 5

• Capturing & locating existing knowledge.
• Sharing (transfer/exchange) of tacit & explicit knowledge.
• Creating new knowledge individually or collectively.

Question 6

Define combinative capabilities.

Answer 6

• Ability to recombine existing knowledge in new ways to create value.
• Schumpeter (1934): development is the “carrying‑out of new combinations.”

Question 7

Which two learning types fuel combinative capabilities’ growth?

Answer 7

• Internal learning
• External learning

Question 8

What are the key principles underlying integrative capabilities?

Answer 8

• Transferability of knowledge (explicit vs tacit).
• Aggregation – grouping knowledge efficiently.
• Appropriability – capturing returns from knowledge.

Question 9

Why is specialisation central to knowledge integration?

Answer 9

• Humans have limited capacity to process knowledge.
• Efficient production therefore relies on specialists whose expertise is integrated rather than fully transferred.

Question 10

Explain why transferring knowledge is not always efficient for integration.

Answer 10

• Effective integration can be achieved while minimising cross‑learning, avoiding costly, slow transfers of tacit knowledge.

Question 11

Describe protective capabilities and their strategic role.

Answer 11

• Organisational arrangements that shield knowledge from imitation.
• Sustain resource heterogeneity and encourage investment in innovation.

Question 12

List common legal mechanisms to protect knowledge and their limitations.

Answer 12

• Patents → costly, limited scope & lifetime, no guard against observation.
• Copyrights → cover expression, not tacit know‑how.
• Trade secrets → protection lost once disclosed.

Question 13

How do the three capability types link to economic performance?

Answer 13

• Combinative → create value.
• Integrative → drive cost efficiency.
• Protective → secure returns appropriation.

Question 14

State Peter F. Drucker’s view on managing knowledge.

Answer 14

• “You can’t manage knowledge… but you can enable knowledge creation by providing the right context.”

Question 15

What does the Knowledge‑Based View conclude about leveraging capabilities?

Answer 15

• Leveraging combinative, integrative & protective capabilities opens strategic opportunities.
• Competitive implications demand a solid understanding of these capabilities.