6.18 Kogut and Zander's KM Model

6.18 Kogut and Zander's KM Model

          Kogut and Zander (1992) are among the first researchers who established the foundation for the knowledge-based theory of the Image available in the printed form of the bookorganization when emphasizing the strategic importance of knowledge as a source of competitive advantage. Their work is focused on the idea that “what firms do better than markets is the creation and transfer of knowledge within the organization”. Knowledge, which consists of information and know-how, is not only held by individuals but is also expressed in regularities by which members cooperate in a social community. Organizations as social communities act as “a repository of capabilities” determined by the social knowledge embedded in enduring individual relationships structured by organizing principles (Kogut and Zander, 1992). The organizing principles refer to as “the organizing knowledge that establishes the context of discourse and coordination among individuals with disparate expertise and that replicates the organization over time in correspondence to the changing expectations and identity of its members” (Kogut and Zander, 1996). 

          This view is further articulated and empirically tested in Kogut and Zander (1993). They assert that:

  1. firms are efficient by which knowledge is created and transferred,
  2. a common understanding is developed by individuals and groups in a firm through repeated interaction to transfer knowledge from ideas into production and markets,
  3. what a firm does is not depending on the market’s failure rather the efficiency in the process of transformation relative to other firms, and
  4. the firm’s boundary is determined by the difference in knowledge and the embedded capabilities between the creator and the users (possessed with complementary skills) and not market failure.

           Kogut and Zander (1996) further extend their discussion on the concept of identity by asserting that individuals are “unsocial sociality” where they have both a desire to become a member of community and at the same time also have a desire to retain their own individuality (Kogut and Zander, 1996). As organizations provide a normative territory to which members identify, costs of coordination, communication, and learning within organizations are much lower which allow more knowledge to be shared and created within the organizations.