Knowledge Transfer: A Basis for Competitive Advantage in Firms

Abstract

This concluding article in the special issue of Organizational Behavior and Human Decision Processes on the foundations of knowledge transfer in organizations argues that the creation and transfer of knowledge are a basis for competitive advantage in firms. The article builds on a framework of knowledge reservoirs to show why knowledge transfer can be difficult and to identify the kinds of knowledge that are most difficult to transfer to different contexts. The article develops the proposition that interactions among people, tasks, and tools are least likely to fit the new context and hence are the most difficult to transfer. This theoretical result illuminates how organizations can derive competitive advantage by transferring knowledge internally while preventing its external transfer to competitors. Because people are more similar within than between organizations, interactions involving people transfer more readily within than between firms. By embedding knowledge in interactions involving people, organizations can both effect knowledge transfer internally and impede knowledge transfer externally. Thus, knowledge embedded in the interactions of people, tools, and tasks provides a basis for competitive advantage in firms.