Name: Clement Mlungisi Simelane

Report Title: The extent to which the creation, sharing and utilization of
knowledge is central to resource based view of competitive advantage.
Recourses and organizational capabilities as a principal source of
competitive advantage.

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 1. Introduction.
Knowledge management can be viewed as a soul or spirit or creed of a company.
As a spirit, to achieve superior company performance. A leader and subordinates
should exactly know the value of their competences and the value of their
customer. Knowledge reveals such capabilities or lack thereof. It is now well
established that profitability and sustainability are the major drives of business.
These companies aim to attain a competitive edge over competitors. Competitive
edge is attainable through the creation, sharing and utilization of knowledge. This
view advances knowledge culture and management as central to the resource
based view of competitive edge of companies that wants to attain profitability.
Grimm C.K. etal (2005) find that knowledge management is a “bottleneck” on a
company’s performance or a “bottleneck” on all processes of management
functions both tactically and strategically. According to Grimm when a company
has a lack of knowledge management, it would also have low achievement of all
the functions of management. On the other hand when a company has
successfully planted a knowledge culture and have managed it well it would grow
its presence into the global arena. For example, the Coca Cola company, although
it has its competitors like Pepsi, it has been able to create and retain a particular
knowledge that it uses to produce soft drinks that are peculiar to the company. Its
competitors have not been able to produce the coca cola soft drink that is similar
to theirs. This competitive edge is only possible through specialised knowledge
being acquired and retained in the company. The company’s processes to be able
to share the knowledge and retain therefore preserving it from access by other
competitors is a skill of knowledge management mostly desired by other
companies.
Joseph Schumpeter described competition as a prerennial gate. He argues that
every piece of business strategy acquires its true significance only against the
background of that process and within the situation created by it. Competition is
therefore a perennial gate of creative destruction. The essence of Schumpeter’s
argument is that firms act and rival to each other through competition. He argues
that it is in the context of action and reaction that advantage is created and
destroyed. If competitive is a prerennial gate, every business advantage will
eventually be eroded through competition. Schumpeter referred to that process as
a creative destruction. The creation, acquisition and retention of knowledge by a
company would according to Schumpeter give a company a competitive
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advantage but for the time the other competitors have not got better knowledge
to rival or react to the acquired and retained knowledge.
According to this view in many markets the frequency in which new products are
introduced has accelerated. For example in the computer and wireless phone
industry where new models once had life cycles of nearly two years product
cycles have shrunk to as short as six months.
The advantages of increase competitive business as a result of acquired and
retained knowledge is that prices of commodities and products are dropped
through discounts. According to Hussain (2016) citing Grant (1996), the purpose
of a company’s existence is to generate the ability to form such conditions under
which diverse individuals can integrate their specific knowledge for producing
goods and services. Hussain’s view is that understanding about the integration
coordination and combination of workers heterogeneous inputs turn into a shared
results as an ongoing process.
In this paper the extent to which creation, sharing and utilization of knowledge
are discussed and placed to be central to the resource based view of the concept
of competitive advantages of a company. This paper explores the importance of
knowledge culture and management, organizational culture and structure,
innovation, technology and other factors as catalysts of the growth of companies
to profitability and sustainability through knowledge creation, sharing and
utilisation.
2. Knowledge Culture.
Knowledge is considered as a primary strategic resources that may enable a
company to exceed in its ability to create and connect its resources and to get the
desired results, Hussain (2016). Hussain argues that there is logical evidence that
is established that knowledge is implicit and therefore rooted in the company’s
unique historical and social context which can be a source of sustained
competitive advantage. As a resource, such knowledge is difficult to reproduce
and cannot be acquired freely from the market. This evidence reflects strategic
leaders equipped in decision-making that fosters a competitive advantage which
is rooted in the development of unique knowledge and at the same time enough
to address the environmental uncertainties and complexities of customer needs
Hussain ( 2016).
The emergence of the knowledge economy necessitated many organisation to
recognise knowledge as a crucial resource to achieve sustainable competitive
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advantage. This recognition resulted in imparting strategic importance to the
knowledge management and triggered the commencement of formal knowledge
management programs in many organizations.
There are many studies that have been made in the area of knowledge
management and there seems to be little consensus on the components and ways
of knowledge management.
Davenport and Prusak (2000) cited in Oliver, etal (2006) suggest that
organizations should look at their culture before launching a knowledge initiative.
There are authors who support the idea that organization culture should be the
focal point of knowledge management programs. Managers are urged to consider
before making a match between the existing resource reserves and newly acquired
ones to develop required capabilities, Hussain (2016). Managers are further
advised to be careful before any knowledge resource intake to the existing
company’s reserve is integrated with the existing set of company’s resources. He
argues that there is a need to understand the integration process among these
resources. He propounded that it is important to guide employees into creation,
sharing and utilization of knowledge-based competencies and better management
of a company’s knowledge resources by using both existing and newly acquired
knowledge strategically. Bock (1999) cited in Oliver, etal (2006) Krogh, etal
(2000).
Despite this widely accepted notion to focus on organizational culture on a core
factor in the knowledge management, very little is known about creating an
effective culture for knowledge management. Many questions remain
unanswered regarding the meaning and content of organization culture itself.
Gupta and Govindarajan (2000) argued that organizational culture is not just a
piece of the puzzle but the puzzle itself.
The fact is some organizations have proved successful than others in their
knowledge management often citing their inherent culture as central to their
success.
Knowledge culture is accepted in this paper as the way of an organizational life
that enables and motivates people to create, share and utilize knowledge for the
benefit and enduring process of the organization. According to Hussain (2016)
knowledge has established its place as one of the key competitive resources, when
work is performed by the knowledge workers who come together with different
capabilities to execute a project either for providing services or developing

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products. According to Hussain managers at this point try to use their
heterogeneous capabilities toward a homogeneous product or services. Barney
(1991) cited in Hussain (2016) categorically states that superior company’s
performance is attributable to superior resources which are heterogeneous in
nature and provides a competitive advantage if these resources are valuable, rare
and hard for others to reproduce or substitute.
According to Hussain (2016) heterogeneous knowledge reserves that are
embedded in different knowledge works will produce some bundles of specific
capabilities depending on the company’s requirements. He suggests that the
choice of bundles is subject to the uncertainty found in the external environments.
By passing the dynamic capabilities from the company to the individual level it
is easy to understand why companies are different in their performances. It is
argued that the answer lies in the development of key performance indicators at
which knowledge resources should be evaluated for the development of better
capabilities. Key performance indicators should allow company to evaluate
worker’s heterogeneous knowledge resource required for the greater performance
which may provide the opportunity to competitive advantage, Hussain (2016).
The following are said to influence the elements for creating and developing
knowledge culture. These include organizational structure, people rewarding
systems leadership, business process and information systems, Oliver, etal
(2006).
These elements may be broken into process orientation programs, people
orientation programs and technology programs.
There is a perceived interrelationship between knowledge management and
organizational culture Davenport and Prusak (2000).
3. Organization Culture.
According to Tyler (1871) cited in Oliver etal (2006) organizational culture is
that complex whole which include knowledge, belief, art, morals, law, customs
and other capabilities and habits acquired by man as a member of society. This
definition emphasises individuals, knowledge, groups and society as integral
constituents of a culture.
From the views of anthropology, sociology and archaeology as propounded by
Kroeber and Kluckhohn (1952) culture involves key definitional features such as

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collectiveness a way of life, and the learned behaviours, values, knowledge and
perceptions of the people.
Steven (1989) notes that organizational culture is something akin to the culture
of the society in which the organization operates. Today business has created
organizations that develop their own philosophies, assumptions, values
expectations, attitudes and norms perceived to bind the organization together.
These cultural features of an organization may deviate from cultures of their
respective societies. The view is that many business organizations influence the
cultural factors within them rather that the society as a whole.
Conventional Structures of organizations have not given space to knowledge
culture therefore the suggestion is that it must be transformed to support the
development of knowledge culture. Some studies have even gone to the extent of
suggesting a position such as chief knowledge officer, knowledge manager, portal
manager content manager and knowledge analysts, Davenport and Prusak (2000).
The view is that some specialist positions are necessary for developing
knowledge culture. Some have however suggested knowledge management roles
rather than positions.
From an African perspective, the concept of codifying tacit knowledge into
implicit knowledge is also considered to be playing an important role in
knowledge management, it is at the same time perceived to be paradoxical as the
resulting performance standards are not always compatible to the varied work
context, Nansubuga & Munene (2020). According to this view, the creation,
sharing and utilization of knowledge, as envisaged from the writers coming from
other backgrounds rather than Africa, cannot work in Africa. This may be one of
the reasons why there are few if not none of African firms that are successful
beyond the continent, that is, in the global arena.
In Africa, knowledge is described by societies through interaction with the
surrounding environment. Knowledge management is grounded on cultural
values and folklore that would relate to the day to day events and activities and it
is maintained across generations. Knowledge management practices that are built
on explicit standardised frameworks would imply enormous transformation of
cultural values, beliefs, attitudes and habits of Africans, Nansubuga & Munene
(2020).

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 4. Organizational Structure.
The structure of an organization entails the rules, policies and the hierarchy of
command of the organization, Hussain (2016). Generally an organizational
structure refers to the positions and the chain of command in those positions. The
chain of command may be vertical or horizontal and that is how a hierarchy of an
organization is differentiated. The form an organizational structure is does affect
the impartation of knowledge culture from one person to the other, in the
organization or from the organization to an individual and from managers to the
workers at the lower levels of the structure, as Hussain suggests.
How the chain of command is and how the boundaries between the sections are
set, how the managers are organized will affect the flow of information in an
organization. An organization with an open-door policy and is structured in a way
that encourages personal interactions of individual workers, managers and
workers is expected to be successful in creating, sharing and utilizing knowledge.
The traditional vertical hierarchical structure is therefore criticised for hindering
knowledge culture and management. The horizontal hierarchical structure on the
other hand is favoured to foster interaction between the lower levels of staff with
their managers to give input and participate in the decision-making processes of
the company. In such an environment a knowledge culture is built and the benefits
are realised, Oliver etal (2006).
5. Leadership.
Some studies have found that the expression of positive leadership characteristics
at various levels of management is a vital aspect of developing knowledge culture
in organizations. These attributes include empowering subordinates, allocating
resources to them, openness towards change and experimentations developing
trust, tolerance to mistakes and building long-term perspective of organizational
goals among employees. The emphasis is on empowering employees with certain
autonomy in task achievement and learning which can provide agility to the
organization’s knowledge culture. The involvement of middle managers is
critical to this exercise, not only senior managers.
6. Communities of Practice.
Lave and Wenger (1991) coined and described the term, “communities of
practice” as an activity system that includes individuals who are united in action
for a larger collective.

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A community of practice has been instrumental in resolving product issues
solving customer problems and assisting in the generation of sales.
The view is that the communities should be provided with knowledge portals
facilities for virtual interaction and contents management.

7. Employees Rewards System.

It is suggested that organizational rewards motivate employees towards
knowledge sharing and foster a knowledge culture. Indirect rewards such as
appreciation and recognition play a greater role than monetary incentives. Long-
term incentives such as profit-sharing motivates employees. Long-term options
were observed as effective means when compared to short-term incentives. The
accepted suggestion is that organizations should acknowledge employees’
knowledge contributions and be part of the performance appraisals weighing up
to twenty percent in the overall performance.
8. Time Allocations.

Knogh, etal (2000), cited in Oliver, etal ( 2006) opined that it is essential to
allocate time for employees to learn, collaborate, to learn new knowledge, to
create and to share activities. According to him some companies allocate between
twenty to thirty percent of their job time for new knowledge creation. If allocating
time is to bear fruits, Senior Managers must develop knowledge culture strategies
whereas middle managers must allocate time to employees to spend time on
knowledge creation and sharing.
9. Business Processes.
Effective Management processes are pivotal in building a block for sustainable
knowledge culture, Davenport (1998). Davenport stated that knowledge is
generated, used and shared intensively, in specific business processes. These
knowledge processes may include market research, product development, sales
and service delivery. When knowledge processes are spread along the value chain
and when knowledge is used to create process outputs there is a seamless flow of
knowledge in the day to day business life of the organization. This requires
continuous analysis and improvements of knowledge in order to access the needs
resources and gabs in the organization.

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Knowledge groups are created to capture knowledge and generate knowledge.
These groups may develop knowledge pools such as templates guidelines, best
practices, case studies, expertise notes knowledge maps, work flow charts.
10. Infrastructure.
Organizations should make considerable investment in infrastructure that enable
knowledge culture. The aim should be to create and initiate knowledge portals.
Investment in technology that fosters innovation and knowledge creation is worth
undertaking. Technology may include groupware search engines, virtual
conferencing tools and data technologies, content management system and
artificial intelligence tools. These technologies may be integrated into knowledge
portals to provide a single gateway for accessing the organizational knowledge
base. Through these portals employees can access, create, organize, share and
utilize enterprise knowledge via seamless collaboration.
The information may be shared with business partners and customers who will
then contribute towards the improvement of the company.
11. Physical Attributes.
The way the work place is set up contributes towards sharing of knowledge hence
growth of knowledge culture, Subanidfa, S.& Hdiwidjojo, (2017). Structural
characteristics such as shared areas, cubicles with low divides open spaces and
other informal meeting amenities can help people in the process of social
networking. These physical characteristics can facilitate the flow of knowledge
across the organization.
12. Innovation.
Corporate finance researchers generally agree that the objections of a company is
the maximisation of value (Berk and De Mango 2016) cited in Battisti, etal
(2020).
Value creation is influenced by both internal improvement (e.g research and
development process) and external development. Innovation has long been
identified as an engine of competiveness and growth( Battisti, etal (2020).
Chesbrough propagates a concept called “open innovation” as a new concept of
innovation, which he says is the use of purpose inflows and outflows of
knowledge to accelerate internal innovation and expand the markets for external
use of innovation respectively. This paradigm assumes that firms can and should

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use external ideas and internal and external paths to market as they look to
advance their technology.

13. Conclusion.
Companies should have only those resources which can contribute in value
system that means that companies do not require every kind of resource.
Knowledge resource that does not have the ability to create value is a waste of
resources Hussain (2016). In this paper it has been demonstrated that knowledge
creation, sharing and utilization are essential in ensuring the success of a firm. It
has also been submitted that knowledge culture and management are critical
strategic attributes for a profitable and sustainable company. Along with
knowledge culture and knowledge management are other attributes that make
these two concepts. These attributes are innovation, organizational structure,
organizational culture, leadership, communities of practice, employee rewards
system, business practices are infrastructural development that are pivotal in the
complete scheme of acquiring a competitive edge through knowledge. All these
attributes have been briefly discussed.

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