Transactive Memory Systems: A Microfoundation of Dynamic Capabilities

Abstract

A persistent puzzle in management research is competitive advantage and why certain firms excel in getting ahead while others falter (Knott, 2003). One explanation is the dynamic capability argument, which emphasizes a firm’s superior ability in sensing new opportunities in its environment and seeking those opportunities by continuously adapting, integrating, and reconfiguring its key assets and competences (Teece et al., 1997). Researchers have called for more work to identify the micro-processes or mechanisms through which firms develop dynamic capabilities (Argote and Ingram, 2000; Spender and Grant, 1996; Teece, 2007). In this paper, we present transactive memory as a microfoundation of dynamic capabilities and describe how an organizational system for collectively encoding, storing, and retrieving knowledge can facilitate the combinative integration and renovation of an organization’s knowledge assets.