The Moderating Role of a Knowledge Strategy

In Figure 8.3, we link operational capabilities to firm performance. Increasingly, dynamic capability researchers are agreeing that it is not dynamic capabilities, per se, that lead to competitive advantage, but it is the resulting configuration of operational capabilities and resources—including knowledge—that has an impact on performance (e.g. Eisenhardt and Martin, 2000; Winter, 2003). As described earlier, operational capabilities are rooted in knowledge and learning and, in particular, in single-loop learning. Thus, the link to examine is the relationship between learning/knowledge and performance.

Researchers have opposite views about the impact of learning and knowledge on firm performance. On one side of this discussion are those scholars who establish a positive link between these constructs. In their pioneering work, Cangelosi and Dill (1965) mention that improved performance is learning. Later, Fiol and Lyles (1985) propose that, irrespective of the underlying interpretations of organizational learning, ‘in all instances the assumption that learning will improve future performance exists’ (1985: 803). The perspective of the knowledge-based view further stresses a positive link between knowledge and performance. It is expected that a particular sub-category of knowledge, which is valuable, rare, inimitable, and non-substitutable....