Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources

by Nicolai J. Foss

The rise of the knowledge economy has far-reaching implications for the nature of economic organization as well as firm strategy. Not surprisingly, thinking in management studies as well as in economies has been profoundly affected by these changes. Thus, management thinking in particular has been increasingly characterized by a schism between those who advocate 'knowledge' or 'capabilities-based' approaches in the strategy and organization fields and those who adopt more economies-influenced approaches, notably the economics of organization. This book is a sustained attempt to overcome this schism. Its basic argument is that knowledge-based and organizational economics approaches are not substitutes but complements. In particular, organizational economics has much to contribute with respect to furthering the understanding of efficient organization and strategy in the emerging knowledge economy. This theme is taken through several theroretical as well as empirical variations.
Themes such as the incentive liabilities of flat, 'knowledge-based' organizations, the role of complementary HRM practices for fostering knowledge sharing and creation, and the role of organizational instruments in the knowledge management activities of the multinational corporate are extensively treated. The book thus contains important implications for knowledge management, organizational design and international management. The book encompasses nine chapters which critically examine current thinking on strategy, and organization. The reasoning is non-technical. While primarily aimed at a management studies audience, economists and other social scientists will also benefit from it, including Advanced Students, Academics and Researchers.

296 pages, Hardcover

First published January 1, 2005

Reviews

[Caleb · Rating 5 out of 5]

This book contains a number of papers that together offer an insightful analysis of the the Resource-based View (RBV) and Knowledge-based View (KBV) of the firm. Foss has an encyclopedic knowledge of literature in strategy, organization theory, and organization economics, which he employs to draw connections between these somewhat disparate theoretical perspectives. The author's primary concern is to demonstrate both the relevance of organizational economics for attempts to more clearly delineate the issues raised by the RBV and KBV, and to emphasize the insights of these latter theories and their importance for expanding the purview of organization economics research. This book has the great virtue of appreciating the clarity and rigor provided by economic analysis without overstating its capacity to explain key organizational phenomena, i.e., acknowledging the need for behavioral research as a complementary perspective.