Knowledge Management and Resource-Based View of the Firm

Vocabulary terms and definitions covering the Resource-Based View of the Firm, types of resources, inimitability, and the role of knowledge and capital in modern business.

Resource-based view of the firm

A perspective that firms’ competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

Tangible resources

Organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources.

Intangible resources

Organizational assets that are difficult to identify and account for and are typically embedded in unique routines and practices, including human resources, innovation resources, and reputation resources.

Valuable (Resource criteria)

A resource that exploits opportunities and/or neutralizes threats in the firm’s environment.

Rare (Resource criteria)

A resource that is not common among the firm’s current and potential competitors.

Sources of Inimitability

Factors that make it difficult for competitors to copy resources, including physical uniqueness, path dependency, causal ambiguity, and social complexity.

Knowledge Economy

An economy where wealth is increasingly created by effective management of knowledge workers instead of by the efficient control of physical and financial assets.

Intellectual capital

The difference between a firm’s market value and book value, serving as a measure of the value of a firm’s intangible assets.

Explicit knowledge

Knowledge that is codified, documented, easily reproduced, and widely distributed.

Tacit knowledge

Knowledge that is in the minds of employees and is based on their experiences and backgrounds.

Human capital

Individual capabilities, knowledge, skills, and experience of the company’s employees and managers.

Social capital

The network of relationships that individuals have throughout the organization.

Knowledge worker loyalty trend

The observation that loyalty to an employing firm has decreased compared to loyalty to a profession and colleagues.