Research question: “How can managers create uncommon knowledge when rivals have access to similar, commonly available knowledge?” (page 425) Author’s purpose: The importance of knowledge is well established in research. The knowledge-based theory considers knowledge as the most strategically significant resource of a firm. Notwithstanding, the authors illustrate that it is not known much about “how firms create, acquire, and apply knowledge better than other firms” (page 421). Nag and Gioia set up a qualitative study to develop an inductive model to reveal the processes how and under which circumstances managers transform common into distinctive knowledge.
The foundry industry in the northeast and midatlantic United States served as study population. The authors conducted 53 interviews with CEOs and other key members involving 22 different foundries. Major conclusions: The model developed three dimensions how executives differ in the process from common to uncommon knowledge: executive knowledge schemes, executive scanning and uncommon knowledge use. The study indicates the personal impact of executive behavior how they identified, searched for and used uncommon knowledge: Under same external circumstances they act in different ways to address strategic situations. (1) Interpretation of the results
The interviews were structured like following. There are three aggregated dimensions (executive knowledge schemes, executive scanning and uncommon knowledge use). Each of these dimensions consists of two second-order themes. These feed on the first-order categories which are coded quotes. Executive knowledge schemes mean how executives are determined towards theirs perceptions of knowledge. They are also called knowledge structures.
A more detailed view onto these structures reveals that they consist first of the second-order-themes knowledge significance (criticality and distinctiveness relate to the importance of knowledge to the strategic performance of a firm). The usage of knowledge is mostly seen in three areas: technical effectiveness, operational efficiency and customer responsiveness. Second, the knowledge schemes consist of knowledge source (external accessibility, personal competence and lower-echelon knowledgeability relate to the usefulness and quality of different origins of knowledge). Executive scanning means the activity to acquire additional knowledge. It differs in the quantity and the character how managers search to extend the strategic resources. Scanning intensity describes the amount of time and effort managers invest to acquire new knowledge.
The other second-order theme scanning proactiveness goes beyond the intensity in order to get better and other information than competitors do. Uncommon knowledge use means the application of knowledge to a firm’s challenges. As long as a foundry does not know how to use common knowledge for its own problems it does not have a competitive advantage of knowledge (it does define about costs as differentiation). Only if it is using uncommon knowledge it becomes distinctive knowledge and therefore turns into a competitive advantage. In the second-order themes this dimension is separated into knowledge adaption and knowledge augmentation. The first one describes how to use new knowledge to solve specific problems and generate new methods.
The second one goes beyond; it is about understanding problems in principle. When you are familiar with the principle you can adapt knowledge to related problems and through that it is possible to generate new knowledge by you. Different emphases in second-order themes are more likely to be linked with certain emphases on another second-order theme (e.g. strong believe in technological effectiveness is associated with engaging in proactive scanning). Through those linkages Nag and Gioia were able to draw tree knowledge pathways.
The knowledge adaption pathways describe the track how managerial distinctions emerge to knowledge adaption. The knowledge augmentation pathways describe the way to the augmentation of knowledge and the third track describes how it happens that uncommon knowledge is not used. In the knowledge adaption pathways executives consider knowledge as most important for operational efficiency.
They believe it’s hard to obtain from external sources and they have confidence in their own knowledge but limited trust in workers’ knowledge. They are scan-ning intensively for knowledge and personally they had a greater share in knowledge work. Firms on that pathway are adapting knowledge and come more likely to an incremental development. In contrast described before in the knowledge augmentation pathways leaders have a strong confidence on own knowledge, on workers capabilities and they believe their know-ledge is distinctive and hard to imitate for competitors. Therefore they are scanning pro-actively and engaging others to knowledge work.
These companies use uncommon know-ledge through augmentation. Radical innovations are more likely in those companies. On the path for no uncommon knowledge use the executives contribute knowledge mostly to raise customer’s responsiveness. They have low confidence in company’s knowledge, their own and in workers’ knowledge. Through low and infrequent scanning activity they reduce the information available and therefore they avoid uncommon knowledge usage. Companies on that path are less cost efficient than companies on the paths described before. (2) Strengths and weaknesses of the methodological approach In general the study appears consistent and methodologically well done. While interpreting participants the authors included quotations (‘in vivo’ codes) of the respondents in the paper to underline their interpretations. For “member checking” they organized two group discussions with executives to verify the findings.
They had a grounded theory approach. Starting from the interviews they developed inductively the model. In a quite good manner they developed graphics illustrating their model which make the study easier comprehensible for outsiders. It could be criticized that the authors did not reveal their bias and research background to the topic. In 2006 Nag published his dissertation with the title “From common to uncommon knowledge: An investigation into the socio-cognitive foundations of inter-firm heterogeneity in the use of knowledge as a resource”. Gioia was the chair of the dissertation committee.
The dissertation had the same study population from the foundry industry with partially identical interviewees. In that dissertation more and less detailed sketches of the model in the current paper were presented. Against this backdrop the inductive approach could be suspected. It is more likely that there already existed some detailed ideas how the outcome could look like. Maybe here is the reason why the authors presented the literature review in the beginning which is unusual for an inductive approach. But nevertheless the developed model seems to be fully founded in the data. It could be mentioned more clearly when actually common knowledge becomes uncommon knowledge.
The kind of knowledge which is spoken about is not clear enough. For example in the dimension knowledge schemes there are mentioned market insights as well as technological insights. But concurrent the dimension uncommon knowledge usage is all about technological and process effectiveness issues. Furthermore following there are detailed critiques concerning the sampling and the interviews. Sampling
The study population like chosen in the study is well defined and concrete: Firms belong with the same industry Saturated industry with a lot of established common knowledge (=same basis) and where uncommon knowledge is the way to compete Foundries have a comparable (low) complexity (