Reflections on knowledge-based approaches to the organization of production

Knowledge-based approaches to the firm offer valuable insights into some of the central issues of governance and organizational design—especially into long neglected problems of coordination. I start from the assumption that the fundamental problem of economic organization is reconciling efficiency in knowledge development with efficiency in knowledge application. The paper extends the knowledge-based view of the firm and knowledge integration approach to organizational capability that I outlined in earlier papers (Grant in Strategic Management Journal, 1996a; Grant in Journal of Management Studies 7(4)375–387, 1996b) and draws upon subsequent contributions to the literature. From this basis, I derive implications for the relative efficiencies of alternative institutions of economic organization and for the design of firm structures.