The above-discussed integration mechanisms include the idea of efficiency and emphasises on the first three formal mechanisms with the idea that increased knowledge sharing will increase costs and therefore, outweigh the benefits. However, this thesis only partially supports the view of Krogh (2009) who argues that firms should incentivise the context for individual knowledge integration, by minimising the need to create costly common knowledge. Common knowledge will be discussed in this section and include language, symbolic communication, commonality of specialized knowledge, shared meaning, and recognition of individual knowledge
61 | P a g e domains. To integrate separate knowledge areas which are specialised within the individual knowledge actors, there is need for intersection in the form of common knowledge.
The work by Cowan et al. (2007) on developments in innovation networks investigated the firm level aspects that influence the selection of a partner firm. They conclude that past collaborations increase the likelihood of successful future collaboration as familiarity can build common knowledge, shared meaning and trust.
Individuals can share and integrate aspects of knowledge which is not common between them with the help of common knowledge (Grant 1996). Furthermore, Grant stated that:
“Transferring knowledge is not an efficient approach to integrating knowledge” (Grant 1996, p. 114)
The quote above refers to the discussion that if two individuals work on a task, efficiency is not maximised by the individuals trying to learn everything they know from each other, but by establishing a mode of interaction and minimising the time spent transferring knowledge between the two individuals.
The previous section discussed the more efficient means of knowledge integration within the KBV, and Grant focuses directly on how knowledge integration is conducted within organisations. However, Spender (2002) suggests that Grant is unclear if coordination requires the generation of new knowledge. Kreiner (2002) calls the challenge to cope with both, the existing knowledge and new knowledge creation the ‘double-sided concern’. Kalling and Styhre (2003) argue that the two are entangled and intertwined. This thesis views knowledge production and knowledge coordination as knowledge processes which can be interlinked and will inform each other. Knowledge processes will be further discussed in the knowledge-based value chain construct (section: 2.6.1)
62 | P a g e This thesis will consider five main types of common knowledge with different roles in knowledge integration:
(1) Language- This common knowledge type sees the source of meaning in language.
Interaction is fundamental for integration mechanisms, specifically rules and directives and group problem solving as both rely upon verbal communication (Grant 1996). Nonaka et al. (2000) argues that close physical interaction is important in shaping common language thus supporting individual members’ to have knowledge exchange through participation (Hurnonen et al. 2015) which is particularly important for group problem solving and in-line with the view that group work can be classified as integration practice (Becker 2002).
(2) Other form of symbolic communication - This common knowledge type extends
the efficiency and intensity of communication to include symbolic communication such as literacy, numeracy, familiarity with statistical models or software. This codification deals with the formalisation of crucial knowledge (Tounkara and Arduin 2014). Chwe (2013) explains that common knowledge is more than just an individual receiving a message, it also is concerned with the existence of a ‘shared symbolic system’ which allows individuals to know how the other individual understands it.
(3) Communality of specialised knowledge - This common knowledge type extends
the platform that language provides on communication and argues that the level of sophistication achieved is dependent on the individual actor’s commonality in their specialised knowledge. Hence, Grant (1996) argues that the paradox to this is that there would be not much gain in integration if two individual actors have identical knowledge. Still, entirely separate specialist knowledge of individual actors would mean that integration cannot happen beyond primitive levels.
(4) Shared meaning - This common knowledge type is based on the organisational
learning literature to integrate different experiences and understandings in which Grant (1996) points to the role of common cognitive schema (Spender 1989; Weick 1979), analogy (Nonaka and Takeuchi 1995), and stories (Brown and Duguid
63 | P a g e 1991). The KBV understanding is that knowledge conversion, especially if there is a high complexity of knowledge, will involve knowledge loss which will increase with the complexity of knowledge. In such cases, a shared understanding of a knowledge base will rectify some of this potential knowledge loss and is, therefore, an important type of common knowledge especially with increasing knowledge complexity.
(5) Recognition of individual knowledge domain - This common knowledge type is
based on the assumption that a shared understanding of different actors facilitates and increases the efficiency of coordination activities (Grant 1996). Since different actors work on a common goal, it is important to engage with the right actor for a specific task. Unnecessary knowledge creation, by neglecting other individual knowledge domains, will be costly. Also, giving specific tasks to individuals who have less knowledge or skills in particular areas is equally as costly as absorptive capacity of individuals may also be task dependent, e.g. to give a creative task to an individual with a particular strength to follow detailed processes but lacking out of the box thinking and vice versa may not give the best possible results.
2.4.4.8 - Organisational Capability
From an organisation point of view, the capabilities of a firm can be categorised into different capabilities, for instance, technological capability (Bell and Pavitt 1995) or organisational capability (Ulrich and Lake 1990; Bell and Pavitt 1995). Technological capability includes IT capability and other technical but non-IT capabilities (Sobanke et al. 2014; Li et al. 2006). There have been several studies considering organisational capability from an IT perspective somehow blurring the lines of the distinct technological capability and organisational capability categories. Some studies observe the IT capability with a resource-based perspective (Wu and Chiu 2015; Tippins and Sohi 2003; Bharadwaj 2000). The resource-based perspective emphasises advantages from internal organisational resources that are heterogeneous, unique, and difficult to imitate (Barney 1991; Prahalad and Hamel 1990). However, for the
64 | P a g e purpose of this research and for the reasons discussed in earlier sections, the IT or resource-based perspective is outside of the scope of this research.
Nelson and Winter (1982) define a firm’s capability as the:
“input-output combinations achievable with all possible mixes and levels of activities known to the firm” (pp. 63–64).
This thesis will link organisational capability to knowledge coordination and integration to make future discussions more relevant and in line with the aims and objectives of this study.
North and Kumta (2018), suggests that competitive advantage is created by developing new organisational knowledge. March (1991) supports the concept of organisational knowledge and refers to the knowledge integration mechanism as ‘knowledge exploitation’ and knowledge production as ‘knowledge exploration’, whereas Spender (1992) refers to the integration as ‘knowledge application’ and to the production as ‘knowledge generation’. However, from a KBV point of view, the organisational capability is seen as the outcome of knowledge coordination, which requires effective integration of various individuals with disparate specialist knowledge.
“If the strategically most important resource of the firm is knowledge, and if knowledge resides in specialized form among individual organizational members, then the essence of organizational capability is the integration of individuals' specialized knowledge” (Grant 1996b, p.375)
Grant further argues that organisational capability from a KBV is linked to the complexity of a capability which is critically dependent on the scope of the knowledge of many individuals. Hence, the organisational capability is limited by degree of knowledge integration rather than volume of knowledge production.
65 | P a g e Sustainable competitive advantage depends on the inimitability of the capability which is linked to specific superior performance. Grant (1996) argues that such inimitability is directly linked to broadening the knowledge scope by using many individuals:
“The broader the scope of the knowledge integrated within a capability, then the more difficult limitation becomes. The complexity of 'broad-scale' integration creates greater causal ambiguity and greater barriers to replication” (Grant 1996, p. 117)
Taking the above points into consideration, this thesis is particularly interested in how and why the complexity of capabilities depend upon the scope of knowledge coordination and integration. The literature review assumption is that wider scope integration creates greater causal ambiguity and therefore, greater barriers to replication. Hence, a focus of this thesis will be to investigate this assumption by understanding how the identified case studies use (or not use) integration scope to achieve an SCA.