Unicaf University Zambia

UU-MBA-712-ZM

An examination of the extent to which the creation, sharing, and utilization of knowledge is
central to the resources-based view of competitive advantage.

Dhanpaul Oodith

R2109D12788001
Abstract

This paper uses literature evidence to demonstrate the extent to which the knowledge
creation, sharing, and utilization are central to the resource-based view of competitive
advantage. The main driver of competitive advantage are a firm’s resources according to the
resources-based perspective. Within this framework, the knowledge creation, sharing, and
utilization are critical for an organization to maintain and improve its competitive advantage.
The collection and production of new information and ideas that may be utilized to improve a
company's goods, processes, and strategies is what knowledge creation entails. Knowledge
sharing enables a company to capitalize on the skills and ideas of its workers and partners in
order to develop new possibilities and handle challenges more efficiently. The utilization of
knowledge entails putting these new ideas and insights into action to add value to the
organization and its consumers. Ultimately, the extent to which a firm can create, share, and
utilize knowledge effectively is a key determinant of its ability to maintain a sustainable
competitive advantage.

This paper is divided into three (3) sections, with the first examining aspects of
innovation and knowledge management which improve an organization’s competitive
advantage. Secondly, the literature evidence is reviewed on knowledge sharing and how this
gives organizations a competitive edge. The third section reviews literature evidence on the
utilization of knowledge in planning to gain a sustainable competitive advantage. This paper
concludes by placing emphasis on knowledge management as an important factor in the
resource-based view of competitive advantage and the implications for companies to improve
their competitiveness in the market.
Introduction

Since every business wants to succeed, earn more money, and dominate its market, it
seeks a competitive advantage over its rivals. A company's competitive advantage is the main
edge it has over competitors that allows it to surpass them and dominate that industry. Based
on the resource-based perspective on competitive advantage, an organization‘s capabilities
and resources serve as the primary sources of its competitive advantage. According to this
perspective, knowledge is viewed as a special and valuable resource that can be used to gain
a competitive advantage over competitors. The goal of this research is to examine the extent
to which this resource-based view of competitive advantage places a value on the creation,
sharing, and utilization of knowledge.
The creation of knowledge involves the generation of new ideas and insights that can
be used to improve a firm's products, services, and processes. Sharing knowledge within the
organization can help to spread best practices and improve collaboration and communication.
Utilizing knowledge involves applying it to make better decisions, improve performance and
gain a competitive edge. The analysis of these aspects will explore the significance of
knowledge management in gaining and maintaining a competitive advantage.
The most significant source of a company's sustained competitive advantage is seen to
be knowledge and the capacity to create and use knowledge (Nonaka, 1990, 1991, 1994;
Nelson, 1991; Leonard-Barton, 1992, 1995; Quinn, 1992; Drucker, 1993; Nonaka &
Takeuchi, 1995; Grant, 1996; Sveiby, 1997). Similarly, a study by Grant (1991) found that a
firm's knowledge-based resources, such as its intellectual capital, are positively associated
with its competitiveness.
A study by Teece (1998) argues that a firm's ability to effectively utilize its
knowledge-based resources is crucial for creating and sustaining a competitive advantage.
Similarly, a study by Spender (1996) suggests that a firm's capability to effectively manage
and leverage its intellectual capital is a key determinant of its competitiveness.
A company's ability to effectively create, share, and utilize knowledge increases its
likelihood of establishing and maintaining a long-term competitive advantage. As a result,
organizations ought to establish a foundation that will enable them to conduct in-depth and
ongoing quality assessments and provide opportunities for growth.
Literature Review

The resource-based view of competitive advantage suggests that a firm's unique

resources and capabilities can be a source of sustained competitive advantage. Knowledge is
considered a key resource in this perspective. Knowledge can be seen as a unique and
valuable resource that can help a firm to innovate, improve processes, and gain a deeper
understanding of its customers and markets. The creation, sharing, and utilization of
knowledge are central to this view as they can enable a firm to develop and maintain unique
resources and capabilities.

Dasgupta and Gupta (2009) in their article "Innovation in organizations: A review of

the role of organizational learning and knowledge management" argue that knowledge
management is a critical aspect of organizational learning, which in turn is a key driver of
innovation. Innovation can take many forms, including new products, processes, and business
models. It can also involve improving existing products or services, or finding new ways to
use existing technologies. One of the key benefits of innovation is that it can lead to increased
efficiency and cost savings. This can be achieved through the development of new
technologies or the introduction of new processes that are more efficient than existing ones.
Innovation can also lead to new revenue streams and market opportunities. For example, a
company that develops a new product or service may be able to expand into new markets, or
increase its market share in existing markets. In addition, innovation can help companies to
stay ahead of their competitors. By constantly innovating and improving their products and
services, companies can maintain a competitive edge, attract new customers, allow
companies to improve their performance, and create new opportunities for growth and
success.

Dasgupta and Gutpa (2009) also noted that the sharing and dissemination of
knowledge within an organization can lead to the creation of new knowledge and the
improvement of existing knowledge. The creation of knowledge involves the generation of
new ideas and insights that can be used to improve the firm's products, services, and
processes. This can lead to increased innovation and the development of the organization’s
resources. Sharing knowledge within the organization can help to spread best practices and
improve collaboration and communication. They suggest that knowledge sharing can be
facilitated through the use of formal and informal networks, and that a culture that
encourages the sharing of knowledge is critical for the effective management of knowledge.
Utilizing knowledge involves applying it to make better decisions, improve performance, and
gain a competitive edge. When a company implements its strategy and none of its rivals or
potential rivals have done the same, it is said to have a competitive edge. Gaining a
competitive edge can also refer to being able to respond more quickly or effectively to
changes in the market or industry.

Farwa Muqadas et al., 2016, suggest that knowledge is viewed as a valuable asset that
can provide a competitive advantage. This aligns with the idea that knowledge and
intellectual property can be used to differentiate a company or organization from its
competitors, and can be leveraged to create new products, services, or processes. This idea
has been supported by various studies in the fields of management, economics, and strategy.

A sustainable competitive advantage as opined by Barney (1991), is one that derives

exceptional performance levels from implementing effective strategies and is not imitated
and put into action by competitors due to their inability to recreate the advantage of this
system. Pandian and Mahoney (1992) argued that a company's competitive edge is rooted in
its ability to create a resource advantage through effective planning. They suggested that this
resource advantage is created through the alignment of industry strategies, corporate rules,
and organizational impacts, and that it is this alignment that enables a company to create a
sustainable competitive advantage. They also argued that the ability to create a resource
advantage through planning is a key driver of a company's ability to achieve a sustainable
competitive edge. Smith and Meso (2000) claimed that competitive edge is sustainable from
just cardinal assets. Cardinal assets are those resources and capabilities that are unique to a
particular company and provide a significant advantage over competitors. This theory
suggests that a company's competitive edge is not dependent on its ability to imitate or
replicate the resources and capabilities of other companies, but rather on its ability to
leverage its own unique assets.
Conclusion

In conclusion, the resource-based view of competitive advantage emphasizes the

significance of a firm's internal resources and capabilities as key determinants of its
competitiveness. Knowledge, as a specific type of resource, plays a crucial role in this
perspective. It allows a firm to develop and maintain unique capabilities that are difficult for
competitors to imitate, thus providing a sustainable source of competitive advantage in the
turbulent external business environment.

Implications

Therefore, companies should actively invest in developing and acquiring knowledge-

based resources to improve their competitiveness in the market taking into consideration but
not limited to the following:

 Emphasis on internal resources: The resource-based perspective on competitive

advantage emphasizes the relevance of a firm's own resources and competencies
above external variables such as market conditions or competitors. To acquire a
competitive edge, firms must identify and develop their distinctive resources and
competencies.
 Importance of knowledge management: Emphasis should be placed on the
significance of good knowledge management strategies for firms, such as knowledge
production, sharing, and transfer.
 Long-term focus: A firm's resources and competencies are difficult to mimic or
reproduce, which can result in a durable competitive advantage. As a result, there is a
need for companies to have a long-term focus in order to establish and retain their
distinct resources and skills.
 Organizational culture: There is a need for businesses to cultivate a culture that fosters
creativity, innovation, and learning in order to enable the development of unique
resources and skills.
 Strategic management: The resource-based perspective of competitive advantage says
that in order to obtain and retain a competitive edge, businesses must carefully
manage and develop their resources and skills. Additionally, emphasis should be
placed on having strong strategic management procedures in place to retain and share
knowledge.
References

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