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Knowledge, communication, and organizational capabilities

Garicano, Luis and Wu, Yanhui (2012) Knowledge, communication, and organizational capabilities. Organization Science, 23 (5). pp. 1382-1397. ISSN 1047-7039

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Abstract

This paper attempts to bridge a gap between organizational economics and strategy research through an analysis of knowledge and communication in organizations. We argue that organizations emerge to achieve the intensive use of the knowledge that is acquired to perform specific tasks and to integrate dispersed knowledge that is embodied in different human minds. The attributes of the tasks undertaken determine the optimal acquisition and distribution of knowledge. Depending on the codifiability of knowledge, different communication modes arise as a coordination mechanism to deepen the division of labor, leverage managerial talent, and exploit the increasing returns to knowledge. Organizational processes can be adapted through codes and culture to facilitate coordination; organizational structure can be designed to complement the limitations of human ability. We stress that organizational process and structure construct the core of organizational capital, which generates rent and sustains organizational growth. From the analysis, we draw implications for the strategic management of knowledge and human resources in organizations.

Item Type: Article
Official URL: http://orgsci.journal.informs.org/
Additional Information: © 2012 INFORMS.
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Journal of Economic Literature Classification System: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M50 - General
Sets: Departments > Economics
Departments > Management
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > Managerial Economics and Strategy Group
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 21 May 2013 15:57
URL: http://eprints.lse.ac.uk/47976/

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