The Knowledge-Based Approach: An Organizational Economics Perspective

Proponents of the emerging knowledge-based (resource-based, competencebased, etc.) theory of the firm have subjected more traditional economics of organization theories to strong critiques. Rather than directly answering this critique, we examine key ideas of the knowledge-based approach, and argue that these are not necessarily in conflict with basic ideas from organizational economics (particularly ideas relating to the property rights approach), but are either complementary to or consistent with these. In fact, property rights economics and other organizational economics ideas may at least to some extent constitute a much needed micro-foundation for the knowledge-based perspective. The purpose of this exercise is 1) to facilitate dialogue, 2) to dispel false claims of insurmountable differences between the two approaches, and 3) to establish what is genuinely different in the knowledge-based approach. Acknowledgments The helpful comments of Jay Barney, Mark Casson, Jens Frøslev Christensen, Mikael Iversen, Jackson Nickerson, Oliver Williamson and participants in seminars at ATOM, Université Paris I, and Copenhagen Business School on earlier versions of this paper are gratefully acknowledged.