Managing Knowledge-Based Resource Capabilities Under Uncertainty

Janice E. Carrillo () and Cheryl Gaimon ()
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Janice E. Carrillo: Warrington College of Business, University of Florida, Gainesville, Florida 32611-7169
Cheryl Gaimon: DuPree College of Management, Georgia Institute of Technology, Atlanta, Georgia 30332-0520

Management Science, 2004, vol. 50, issue 11, 1504-1518

Abstract: A firm's ability to manage its knowledge-based resource capabilities has become increasingly important as a result of performance threats triggered by technology change and intense competition. At the manufacturing plant level, we focus on three repositories of knowledge that drive performance. First, the physical production or information systems represent knowledge embedded in the plant's technical systems. Second, the plant's workforce has knowledge, including diverse scientific information and skills, to effectively operate the technical systems. Third, the firm's managerial systems embody knowledge in the form of goals, reward systems, and control and coordination systems. Taken together, we consider the technical systems, workforce knowledge, and the managerial systems as the plant's knowledge-based resource capability. Two normative models are introduced offering insight on how plant performance is impacted by investments in workforce knowledge (training) or the technical systems (process change). The models explicitly recognize that the outcome of investments in knowledge-based change is uncertain due to factors including technical problems, worker resistance, and limited financial resources. Also, we recognize that workforce knowledge may be deployed to mitigate the outcome uncertainty encountered with process change. Investments in knowledge-based change cannot be fully understood in isolation of the managerial systems. In one model, the plant manager is motivated by an incentive system that rewards the realization of a threshold goal, whereas in the other model the incentive system emphasizes the realization of meeting a particular target goal. We also investigate the impact of the manager's view of uncertainty (her willingness to absorb risk), which is influenced by the managerial systems. Results show that different characterizations of the managerial systems have a profound effect on managerial behavior and plant-level performance.

Keywords: knowledge-based resource capabilities; process change; workforce training; knowledge management; managerial systems; uncertainty (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (22)

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