Tacit Knowledge

Abstract

As mentioned in Chapter 1, a number of authors have argued that tacit knowledge plays a central part in the development of sustainable competitive advantage (for example Badaracco, 1991; Nonaka, 1991; Grant, 1993; Spender, 1993; Sobol and Lei, 1994). Quinn (1992), Badaracco (1991) and Clark (1987) suggest that because of the dynamic conditions of the market, competitive advantage is no longer dependent on investment in machinery, on the attribute of products or on tangible resources as these can be purchased or replicated. Hence Grant (1993) asserts that knowledge, and notably tacit knowledge, is now firms’ most strategically significant resource. He justifies this assertion by arguing, similarly to Quinn (1992), that because of the ability of competitors to acquire resources quickly the ‘sustainability of competitive advantage… requires resources which are idiosyncratic… and not so easily transferable or replicable. The criteria point to knowledge (tacit knowledge in particular) as the most strategically-important resource of the firm’ (Grant, 1993, p. 2). This opinion is shared by Sobol and Lei, who state that in the future firms will no longer compete on the attributes of their products but on the skills and capabilities they can deploy, so organisational learning and tacit knowledge will ‘become the only renewable and sustainable base for a firm’s activities. Tacit knowledge and skills are particularly important sources of future competitive advantage because they are difficult for competitors to see and imitate quickly’ (Sobol and Lei, 1994, p. 177).