Human Resource Management and Knowledge Creation: A Knowledge-Based Perspective

The central argument articulated in the knowledge-based view of the firm is that an organization's ability to generate new knowledge determines its ability to continually develop novel resources or combinations of resources and in return gain sustained competitive advantage over rivals. It is not the resources of the firm per se, but the-firm's expertise in creating new knowledge that creates a competitive advantage. However, while the work on the knowledge-based view has increased our understanding why organizational knowledge-creation is important for firm competitive advantage, the stream of research doesn't extensively research how firms can develop this capability. If the organizational ability to create knowledge is truly the primary source of sustained competitive advantage for firms, then it is critical to understand how firms can develop this capability. The focus of this paper is on how human resource management practices can be used to build and support organizational knowledge-creation capability. Based on the review of the literatures on the knowledge-based view of the firm, knowledge creation and human resource management (HRM), the paper proposes an integrative approach between the knowledge and the FIRM literature in an attempt to advance knowledge in both fields as well as improve organizational effectiveness. We believe that if HRM neglects to recognize the importance of knowledge and does not adjust its concepts and practices to the multi-faceted nature of knowledge, it will be marginalized. The same stands for Knowledge Management (KM) if it does not focus on the requisite management of individuals, their interpersonal relations and their relations with their respective organizations. Since knowledge-creation is dependant upon the knowledge and motivation of individuals within the firm, it seems likely that organizational practices and policies that affect the human resource of the firm will be one of the major factors that underlie firm's knowledge creation capabilities.