A CRITICAL EVALUATION: THE EXTENT TO WHICH THE CREATION, SHARING AND

UTILIZATION OF KNOWLEDGE IS CENTRAL TO THIS RESOURCE-BASED VIEW OF

COMPETITIVE ADVANTAGE

Othusitse S. D. Phefo

R2005D10861356

Theories of Management

UU-MBA-712-ZM-25297

21 June 2021
Due to the raging business environment, organizations must adapt and accept demands for change to have
a competitive advantage and remain relevant in this fast-growing era. Higher consumer demands and
organizations are reinforcing by realizing the need to be unique, exploit the advantages derived from their
core competitors, and leverage tangible assets. Though this turbulence is increasing drastically, the level of
success in organizations can increase effectively when their learning ability is higher. As much said
creation, sharing, and utilization of knowledge create a structure of an effective organization.
Organizations must do market research, learn about practices and technologies, constantly evaluate their
environment, their performance, and ensure that they are committed to the consistent growth in their
performance.

Dasgupta and Gupta (2009) attest to these sentiments as they state that “The increasing turbulence in the
external business environment has focused attention on the resources and organizational capabilities as the
principal source of competitive advantage.” According to the two authors, organizations can only adapt to
change and meet the demands of today’s business environment through continuous learning (cite).
Organizations will not only be relevant but also increase their completeness, innovativeness and increase
production leading to higher profit margins. Their strategies, reward scheme, and communication protocols
will encourage innovation and change hence, becoming more competitive. Where there is change there is
the challenge: social and economic challenges arise as stumbling blocks for organizations. Knowledge
Management being a major challenge, captures and enables knowledge sharing, promotes the evolution of
knowledge, and avail measures and processes the organization needs to accomplish defined objectives.
However, the organization should have must have an extensive spectrum of competencies including
knowledge to combat these challenges. As Dasgupta and Gupta (2009) have stated, this range of knowledge
can be acquired through consistent and continuous learning.
Nevertheless, this study accentuates the creation, sharing, and utilization of knowledge that creates a
structure of an effective organization and their contributions in learning and knowledge management
regarding the past research and literature. Subsequently, in a resource-based competitive advantage review,
each of the above factors will be evaluated, as well as organizational culture, technology, organizational
structure, and leadership. When the term knowledge management is mentioned, our common sense reflects
the ability to knowledge reuse.

However, in the context of a resource-based view of knowledge management and competitive advantage,
the key objective is to be able to use the acquired information to create the evolution of knowledge, which
is created, shared, and stored for future use. Due to this fact, knowledge management is a critical aspect of
any organization aiming for success (Dasgupta & Gupta, 2009).

An organization's ability to leverage knowledge management and consistent learning in an external

environment is critical to achieving a sustained competitive advantage. It is the intangible nature of
knowledge, its scarcity, value, and inimitable nature that can produce differentiated satisfaction in the
marketplace as products and services become more alike (J. Barney, 1991; J. B. Barney, 2001; Chiang,
2004). This shift is contributing to the foundation of the knowledge revolution as it places less emphasis on
tangible assets and more on intangibles (Chiang, 2004). Hussi (2004) describes the knowledge revolution
as the "new" source of wealth in organizations responding to the growing dominance of informed
consumers in markets when Silvi and Cuganisan (2006) defines it as the course of controlling and
coordinating the intellectual capital of an organization. Respectively, “Knowledge management is a set of
processes that seek to change the organization`s present pattern of knowledge processing to enhance both
it and its knowledge outcomes” (J. B. Barney, 2001; Dasgupta & Gupta, 2009). The system expedites an
interactive environment for creating and sharing existing knowledge of and installing methods to generate
new knowledge and to apply newly acquired knowledge to accomplish strategic objectives. In an
organization, it is the knowledge of production processes, service or product, faults and performance, and
consumers.

Further, knowledge management is classified into two approaches. Personalization Strategies and
Classification Strategies. As per personalization strategies, the newly created knowledge is closely related
to its owner while as per classification strategy, knowledge is accumulated in a carefully structured
database, which is immediately available for use and consumption by everyone within the organization.
These facts, define a streamlined management strategy for managers to foresee and investigate problems,
challenges, and knowledge for innovation. The efficiency of the knowledge management system is openly
correlated to the performance of the organization's ability to innovate through its excellent products or
excellent processes. (Chiang, 2004).

On the other hand, Michael Porter has greatly contributed to the competitive advantage since the 1970s. It
has been used by businesses from all walks of life to gain an edge over competitors and is increasingly
viewed as one of the primary drivers of long-term success for organizations in today's highly competitive
business environment. In this regard, the effect of competitive advantage on performance has attracted
several studies that provide evidence of a positive effect. Hence, considering the importance of competitive
advantage to an organization's competitive position, some studies have tried to identify the key determinants
and consequences of an organization's competitive advantage.

In addition, Porter (2011) refers to competitiveness as a strategy used by organizations to gain a competitive
advantage over competitors. It further states that the decisive goal of competitive strategy is to strive for
and where possible change the rules of good organizational performance. Porter also introduced the Five
Forces Model of Competitive Analysis, which improves the organization's ability to ensure profitability
and return on investment, not just inject capital into the industry (Porter, 2011). Porter believes that the five
forces shaping an organization's competitive advantage are the opposition between competing companies,
the possibility of new competitors entering, the negotiation of supplier influence, the possibility of
consumer power negotiation, and the expansion of alternative products (Porter, 2011). Each of these forces
affects the operation and competitiveness of organizations in the essence of making a profit. The fight is
mainly where organizations can do it better and others having an advantage over others. David (2011)
places more emphasis on analyzing competitive strategies that; organizations miss opportunities and
implement erroneous strategies and cause problems due to tier their disorganization. As much said, this
study affirms, that adaptation and implementation of competitive strategies is essential for the survival of
any organization.

Concerning the above, a framework is provided to realize the potential source of competitive advantage
when analyzing resource-based views (RBV) of competitive advantage. In its context, organizations'
internal resources are a foundation of competitive advantage such that they are valuable and irreplaceable
on a rare and unprecedented basis (Barney, 2007). In this respect, competitive advantages are deriving from
the development and distribution of resources define the value add for customers. Researchers have shown
that knowledge management, organizational learning, and market orientation can help organizations
develop abilities that increase competitive advantage and lead to higher market performance. These factors
enable an organization to consistently develop internal resources that lead to higher performance as their
major objective.

Also, knowledge is transitioning from traditional industrial society to knowledge society and it has become
increasingly associated with higher competitiveness due to its invisibility and inviolability. In this regard,
knowledge-oriented organizations are constantly seeking new knowledge that must be managed and used
effectively to deliver higher customer value than their competitors. Respectively, this means that as
organizations advance knowledge management into their capabilities, they are expected to serve as a
precedent for high competitiveness in today's business environment. It is this ability to systematize
personalized knowledge for use in liberating organizations. Chiang (2004), Dasgupta and Gupta (2009)
state that “knowledge management is viewed as a means of organizational effectiveness and
competitiveness when Grandy and Wicks (2008) speculate that competitive advantage is the root of the
development and distribution of resources that create customer value.

Generally, It is difficult to mobilize knowledge in the activities of the organization, and therefore, it is also
difficult to create value. Therefore, the extent to which knowledge management provides a competitive
advantage depends on the type of knowledge involved in the organization's activities (Silvi & Cuganesan,
2006). Therefore, the extent to which knowledge is used to create a competitive advantage depends on the
particularity and type of knowledge. Therefore, the effectiveness and effectiveness of knowledge
management have been questioned (Silvi & Cuganesan, 2006). From a resource-based perspective, the
resources related to knowledge management are designated by various knowledge management researchers.
These resources are potential sources of competitive advantage (Chiang, 2004). Researchers divide these
resources into different categories. According to Dasgupta and Gupta, they fall into four categories:
organizational culture, technology, organizational structure, and leadership. They are discussed as follows.

According to Ndlela, Culture is the backbone for cultivating better organizational learning to create a better
environment. In addition, the author also evaluated the importance of organizational culture in establishing
a knowledge management plan in the organization (Ndlela & Du Toit, 2001). According to the definition
of Dasgupta and Gupta, the organizational culture is a set of beliefs and values that will be shared by the
employees of the organization (Dasgupta & Gupta, 2009).

While culture is important, if it is not established and managed in a way that promotes organizational
change, it can become an obstacle to the organization (Ndlela and Du Toit, 2001). Furthermore,
organizations are starting to ignore their employees and their culture, which is one of the main challenges
that knowledge management faces. When personal knowledge is valued and rewarded, this encourages
employees to share their critical knowledge. Organizations must clearly understand the relationship
between employee productivity and working conditions. In other words, if the organization pays sufficient
attention to employee needs including their wellbeing and fair salary structures, their performance can
efficiently improve. Dasgupta and Gupta explain how much knowledge management can be improved
through a better organizational culture (Dasgupta & Gupta, 2009).

From the perspective of Dasgupta and Gupta, the educational background, training, innovation capabilities,
experience, personal development, and passion of employees within the organization are core intellectual
capital. They strengthen the innovation capacity to build these capabilities of the organization's human
capital, allowing the organization to better respond to rapid changes in the competitive environment. These
core intellectual capitals have also improved the problem-solving abilities of knowledge workers. New
knowledge can be gained through authority and emphasized education, which leads to innovation and
management of change. The will to share knowledge comes with the self-efficacy of knowledge and the
joy of helping others. To create a sense of self-efficacy and a willingness to share knowledge, organizations
must build trust and competence among their employees.

This supports and promotes an environment that encourages employees to communicate with each other
to build internal trust and competence. Motivation for employees to communicate with each other is
achieved through incentive and reward programs. Communication between employees also improves team
spirit and helps employees determine the right position. They create a learning environment that promotes
the creation, sharing, and application of knowledge to work procedures and processes. In general, to
generate values and beliefs through innovation, organizations need to invest sufficient time in their
employees to publish and impart the relevant knowledge needed for appropriate innovation. There is.
Dasgupta and Gupta (2009) believe that combining existing knowledge and reflecting it in practice is a
deep-rooted way of forming knowledge.

The world is evolving and technology is transforming the world into a high-speed network of information.
Information technology can also improve product quality, improve work processes, enable organizations to
serve customers, and improve communication with customers and suppliers. Technology is an important
facilitator of organizational learning and knowledge management because the technology system within an
organization determines knowledge dissemination and approach. Kearns and his partners also believe that
the use of technology is important to competitive advantage. In RBV with a competitive edge, based on
advanced technology strategies, product cost reduction and product differentiation can be made to increase
customer utilization costs to compete with the competition and increase barriers to market entry (Kearns &
Lederer, 2003). An organization's technology system determines how knowledge is acquired and
disseminated throughout the company. Today, technology is the engine of knowledge management and
organizational learning (Dasgupta & Gupta, 2009).

However, it depends on the organization's commitment to technology policy innovation and whether it
includes an innovative perspective. Policies and promises occupy engineers and allocate funds for the
development of new technologies and maintain habits at the forefront of technology in sophisticated
industries (Dasgupta & Gupta, 2009). Ettlie and Bridges (1983) also believe to reflect technological policy,
the organization's innovative attitude, and dedication to innovation (Ettlie, 1983). This includes hiring
engineers, allocating funds for the development of new technologies, and maintaining tradition at the
forefront of technology in a particular industry.

Meanwhile, Chiang (2004) emphasized that the resources of an organization's technical knowledge
management are important management resources and are explained as an important basis for achieving a
long-term competitive advantage (Chiang, 2004). ). Technical tools such as the Internet, databases,
electronic conferencing systems, video conferencing and neural networks drive knowledge and innovation.
Information technology management helps transform tacit knowledge into formal knowledge, increasing
the likelihood of knowledge sharing and improving the performance of innovation. As Chen noted,
organizations with a strong knowledge management resource structure (1) are more effective at integrating
knowledge management and planning processes (2) build reliable innovative applications and support a
company's business needs faster than its competitors (3) ) innovate important new product features before
competing with the desires of the future business of the forecasting firm (Chiang, 2004) Dasgupta and
Gupta also refer to the structural rules, policies, processes, reports hierarchies of departmental boundaries
and incentive systems (Dasgupta & Gupta, 2009).

Based on the Dasgupta and Gupta pyramid structures, organizations do not protect knowledge, but they
must build learning relationships across organizational boundaries or geographic locations. Learning
networks make them more cautious and accepting of innovation As they pointed out, the impact of a
knowledge management strategy on innovation is unsuccessful if it is not aligned with the knowledge
management organizational structure. Combining a unified technology-based organizational structure,
personalized strategies promote innovation. On the other hand, coding strategies have the potential to
succeed in skills-based organizational structures (Dasgupta & Gupta, 2009). Organizations are a learning
process because of short product life cycles, rapidly changing environments, and diverse customer needs.
To cope with this rapidly changing business environment, speed and flexibility are the prerequisites for
learning and innovation. In addition, to survive in the life of learning and innovation, it is necessary to
utilize the knowledge base of the organization and create an environment of learning structure through
sustainable development (Dasgupta & Gupta, 2009).

In today's business environment, you need strong leaders at all levels of your organization. Organizational
promotion is critical to leaders in demonstrating innovative thinking, implementing, and executing
strategies within the organization, and facilitating knowledge management. Basadur allows people through
the process of applying creativity, where the most effective leaders in the future of the business constantly
discover and define new problems, solve these problems and propose new solutions. We believe it helps to
adjust and integrate different styles (Basadur, 2004). With solid technology, leaders promote innovative
thinking, promote employee learning, and integrate with the integration of organizational cultures,
technologies, and structures that require knowledge management. Assignment to rewarding workloads
Recognize that support if supported, and achievement is a result of individual innovation and better
relationships between leaders and subordinates (Dasgupta & Gupta, 2009).

Effective leaders communicate their vision of innovation and give their subordinates sufficient autonomy
to independently decide how to carry out it, and their subordinates support innovation. Provide feedback to
employees and express appreciation for innovative performance (De Jong & Den Hartog, 2007). Recognize
this type of leadership

In summary, Organizational learning is the heart and blood vessel of any organization and is, therefore, a
prerequisite for competitive advantage. Without learning, organizations cannot adapt to the changing
environment. Because organizations today and tomorrow are undergoing major changes based on the needs
of their customers, advances in technology, advanced competition, short product lifecycles, knowledge, and
innovation are at the forefront. The extent to which this knowledge is created, exchanged, and used is key
to competitive advantage. Coping with a competitive environment is difficult if knowledge is not being
managed in a way that is beneficial to the organization. To create, transfer, and use knowledge in a way
that fosters innovation, you need to manage it. An organization's intellectual capital is the primary intangible
resource for creating knowledge, and thus a knowledge management system is aligned with the
organization.
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