Literature Review: Knowledge Management for Competitive Advantage

This literature review examines the critical role of knowledge management in achieving and sustaining competitive advantage within businesses. The review begins by defining knowledge and exploring its various forms, including conceptual, factual, procedural, and metacognitive knowledge, along with different epistemological perspectives. It then delves into the concept of competitive advantage, outlining its sources, such as customer satisfaction, profit margins, and product value, and discusses strategies like cost leadership and differentiation. The review highlights the importance of strategic planning, resource allocation, and analytical tools like Porter's Five Forces. It emphasizes the role of sustainable competitive advantage, talent management practices, and the use of technology as an "accelerator" in knowledge management. The review also explores the competitive advantage cycle, the significance of customer value creation, and the impact of financial parameters in the process of knowledge management. The assignment critiques scholarly reviews on knowledge as a source of competitive advantage and attempts to develop crucial linkages between variables, identifying gaps in literary sources.

Running head: HUMAN RESOURCE MANAGEMENT
Knowledge as a source of competitive advantage
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Abstract
Knowledge management is needed in terms of developing relevancy in the business
operations. For this, knowledge management systems are needed, which adds a digital touch
to the operations. Effective use of the technology lies in outsourcing and off-shoring the
information to the external environment. Assessing the movement of the knowledge from the
tacit to the explicit knowledge helps in gaining an insight in to the internalization,
externalisation and socialization process. This is effective for expanding the scope and arena
of the triple bottom line. Strategic planning in this context is effective for achieving higher
competitive advantage.

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Contents
1.0 Introduction..........................................................................................................................3
2.0 Literature review..................................................................................................................3
Conclusion................................................................................................................................23
References................................................................................................................................24

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1.0 Introduction
In the current competitive ambience, most of the businesses are dependent on the
information and knowledge for the operations. This need is fulfilled through the means of
formulating effective knowledge based strategies, which helps in the processes of outsourcing
and off-shoring the operations to neighboring countries. In this context, the business is global
and information driven, where the aim is to expand the customer rates. According to Mahdi,
Nassar and Almsafir (2019), knowledge and its creation helps in adding value to the company
glory. Mention can be made of the internet, which is a vital source for the companies in terms
of gaining an insight into the specific needs, demands and requirements of the clients and
customers. Within this, one of the important processes is that of the keyword search and
search engine optimization, which improves the focus of the businesses in terms of
globalizing the operations. In the past decades, there has been radical transformation in the
utilization of knowledge for the production purposes. Theoretical considerations indicate the
mechanisms behind sale of knowledge for increasing the sales revenue for the intelligent
assets and liabilities (Salunke, Weerawardena and McColl-Kennedy (2019). This assignment
attempts to critique the scholarly reviews on knowledge as a source of competitive advantage.
At the initial stage, the concepts related to the variables are clarified, which enriches the
knowledge of the readers. Conceptual framework is developed for developing crucial
linkages between the variables, which is assistance in terms of understanding the importance
of knowledge for achieving higher competitive advantage over the competitors. Along with
this, gaps are also identified in the process of reviewing the literary sources.
2.0 Literature review
Knowledge represents the familiarity, awareness and understanding of the subjects.
The specific forms of knowledge are facts, information, description and skills, which the

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individuals acquire through experience and collecting information through various sources.
There are mainly four categories of knowledge: conceptual, factual, procedural and
metacognitive. According to the statements of Piaget, there are mainly three types of
knowledge, which are physical, logical mathematical and social. Stajkovic and Sergent
(2019) is of the view that the basic sources of knowledge are perception, memory,
consciousness and reason. On the contrary, Gloet and Samson (2020) states that knowledge is
equal to justified true beliefs. It is a concept, which the individuals formulate according to the
gained experience. Plato perceived knowledge to be well adjusted true beliefs. Reference can
be cited of the epistemological knowledge, which measures the difference between
knowledge and the knowledge acquired. This type of knowledge is effective for ensuring
effective development of the human knowledge. Along with this, epistemological knowledge
also contributes in establishing tautological perceptions.
The types of epistemological conceptions of knowledge are knowledge in practice,
knowledge for practice and knowledge of practice. Knowledge for practice implies the
cognitive learning theory, which results in the transformation from the practitioner to decisive
thinker.. In case of the knowledge in practice, actions speak louder than the thoughts.
Interaction with the environment enhances the experiences gained through learning. In this
context, Baporikar (2020) is of the view that actions sets the ground for the knowledge.
Leaning results in experimenting with the skill mix. For knowledge of practice, it can be said
that proper application of the knowledge is crucial for achieving the desired outcomes. The
scope and arena of the knowledge is constantly expanding, which expands the scope and
arena of the knowledge horizons and thinking skills. Bloodgood (2019) is of the view that for
interpreting the new situations, preconceived knowledge can be applied. Evaluation of the
implemented knowledge is effective for gaining further insights into the ways in which new
knowledge can be gained.

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As a matter of specification, the different types of knowledge are apriori, aposteriori,
explicit, tacit, propositional and non-propositional. Apriori knowledge is when the
preconceived knowledge is applied. Delving deeper into the aspect, derivation of the
knowledge is exempted from experience. Deductive approach is beneficial in terms of
arriving at relevant conclusions. Idealism is the key towards gaining prominence for the
knowledge and experience gained. A-posteriori knowledge indicates the practical application
of the knowledge gained later. The sources of application are senses, which are subjected to
logical reasoning, reflection and understanding (Gaur, Ma and Ge 2019). The naturalists and
pragmatists are in favour of the propositions of this type of knowledge.
Competitive advantage is considered to be something, which helps in enhancing the
unique selling proposition of the companies and organizations. Ouakouak and Ouedraogo
(2019) highlights that without evaluation, the abilities are not valued in terms of the assets
and liabilities. Relative evaluation of the strengths helps in achieving a deeper understanding
of the managerial issues. Continuous improvement strategies are an endeavour for achieving
higher competitive advantage. Reinforcement of the competitive policies helps in averting the
instances of biases and conflicts. The sources from which competitive advantage can be
achieved are customer satisfaction, loyalty increase, increase of profit margin, product
offering value, variable size and scope.
Adopting flexible supply chain network would be effective for expanding the scope
and arena of the business. Farooq (2019) points out the competitive advantage cycle, which is
followed by the companies.

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Fig: Competitive advantage cycle
(Source: Pangil and Nasurdin 2019)
At the initial stage, the sources of competitive advantage are identified, which are
assets, liabilities and key success factors. The sequential stage is related to the detection of
the barriers, which persist in the strategies for achieving competitive advantage. The next
stage is that of the value proposal, which consists of the operational excellence, product
leadership and customer intimacy. The penultimate stage is that of encroachment, where the
main activity is that of constructing new plans for accumulating greater shares of the market
in the competitive ambience of the market. Activities like reinvestments of profit, asset and
capability formulation helps in measuring the internal capabilities of the businesses towards
encountering the competitive challenges from the competitors.
According to the arguments of Donnelly (2019), competitive advantage is segmented
into cost advantage and differentiation advantage. Cost advantage is the situation in which
the similar products are sold at lower prices. On the contrary, differentiation advantage

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relates to the implementation of higher prices for selling the unique products. Sheng (2019) is
of the view that this approach is effective for enhancing the unique selling proposition. One
of important analytical tools is that of Porter’s Five Forces, which helps in assessing the
competitive rivalry, threat of substitutes, threat of new entrants, bargaining power of the
suppliers and bargaining power of the buyers. The strategies for achieving competitive
advantage are cost leadership, differentiation, focus cost leadership and focus
differentiation. Mapping the external influences relates with the competitive scope, which
the businesses intend to conduct for expanding the scope and arena of the businesses to the
clients and customers.
According to López-Cabarcos et al. (2019), the sources of competitive advantage are
adapting local market differences, exploiting the global economies of scale, exploiting the
global economies of scope, deducing the optimal locations for the activities and resources
along with maximization of the knowledge through off-shoring and outsourcing of the
operations. Business level strategy involves cost leadership and differentiation, which is
supported by absolute cost advantage. Premium pricing strategies are also used for setting the
prices of the products and services. These strategies are effective in terms of achieving lower
cost, which is an agent for competitive advantage than the other units. The immediate
outcome of this is the higher profit margin, which stabilizes the position in the competitive
ambience of the market. Planning is conducted for resource allocation. In this context, de
Zubielqui et al. (2019) states that one of the main evaluative assessment factor is that of the
competencies of the manager in terms of preparing the actions according to the organizational
needs. Cost leadership is reflected from segmenting the targets of working groups from the
middle class, who are flexible towards spending on the products and services. However, these
products can be produced for the other staffs with just a new look. In this context, the need
analysis forms an important aspect in terms of assessing the suitability of such products for

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the target groups. Use of the digital marketing would provide customized selection option for
the customers in terms of possessing the quality and innovative designs for the knowledge
management systems (Nguyen et al. 2019). High end value and cost benefit analysis is
needed in terms of assessing whether they are feasible. Unique advertising contents are
productive for luring the client and customers towards the brand image.
Sustainable competitive advantage is shaped from the aspects of value generation,
intensity of acquisition/imitation of the competitors’ strategy and unique selling
proposition of the firms. According to Cao, Duan and Cadden (2019), the analytical tool of
resource imitability ladder acts assistance in gaining awareness about the marketing trends of
the competitors. Using competitive policies is recommended for maintaining the fairness in
the marketing process. Consideration of the secured data and knowledge is the key towards
expanding the customer rates (Vrdoljak et al. 2017). Sharing the data with the legislative
bodies helps in measuring the authenticity, reliability and validity in the developed
knowledge regarding the marketing strategies. According to Salunke, Weerawardena and
McColl-Kennedy (2019), individual assets like that of the knowledge management systems
are used for the activities of off-shoring and outsourcing the operations to the external
environment. Imitability in this case is low, as the data is exclusive to the brands (Pratono et
al. 2019). Customer value creation and relative cost of the competitors are central for
achieving higher competitive advantage. In the process of knowledge management, financial
parameter is important for measuring the aspects of economies of scale, experience of the
capital utilization, joint ventures, choices and policies among others. Differentiation within
the mode of managing the knowledge and perceptions reflects the approach towards
expanding the customer rates.
The source of sustainable competitive advantage lies in the talent management
practices. The talent management practices are the foundation, which reflects the approach

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towards managing the human resources. The considerations for talent management are
approach towards product quality, customer services, market environment and others. Shams
et al. (2019) highlights the necessity of different managerial approach towards knowledge
management, where the managers encounter challenges in extracting essential information
from the sources. The more proactive the knowledge, the more productive is the performance.
This knowledge is of no value, if the staffs are unaware of the necessary skills for using the
data and the information.
Quantity of knowledge possesses the flexibility to enhance the quality. In this context,
one of the important conditions is proper awareness towards utilizing the collected
information and data. Different approach is needed from the management levels for effective
handling of the knowledge implemented by the staffs in executing the operations. Li et al.
(2019) opines that hierarchy of knowledge management is mostly viewed as upside down.
Realistic and achievable objectives are an agent for identifying the prospective knowledge,
leading to success. These objectives, further leads to the enhancement of the value
proposition, for luring the stakeholders and shareholders. Saeidi et al. (2019) agrees the view
that conventional approach in this direction is effective for acquiring data according to the
requirements.
Technology is considered to be an “accelerator” in the process of knowledge
management. People (staffs) are the actors, who play through the means of operating the
systems and devices. Information technology is considered to be one of the effective sources
for extracting the necessary data. According to the arguments of Gast et al. (2019),
technology reduces the individual labour and adds a digital touch to the operations. This
technology is effective for enhancing the virtual learning skills of the employees. Using
software is a productive approach for managing the knowledge gaining and knowledge
implementation. Therefore, people are the important sources of competitive advantage.

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Taking a cue from these aspects, Zebal, Ferdous and Chambers (2019) attaches an
interrogative parameter to the tautological representation of the knowledge in the workplace.
Patents, processes, technologies, capabilities, skills, experience and information on the
customers and market shapes the knowledge economy. Knowledge cannot be considered as
an isolated factor. This is due to the etymological origin, which lies in the unconscious biases.
Knowledge is one of an essential component in the process of renovating the standards and
quality of the processes for adapting the external environment. According to the arguments of
Kreiser et al. (2019), knowledge is something, which cannot be stored and separated from the
individuals gaining the knowledge. In the process of measuring the quantity of knowledge,
these approaches are a challenge.
In some of the cases, knowledge is perceived as intellectual capital or knowledge
capital, which is assistance in the process of developing new insights into quantitative
indicators. This is a proactive approach towards accumulating greater competitive advantage.
Knowledge management aims towards optimizing the extracted knowledge for evaluating the
most prospective source for reaching to the benchmark. In this context, Bakhouche (2019)
opines that increasing the capital of knowledge simultaneously results in increasing the
business value.
Empirical knowledge is the knowledge, which is developed through observation and
experiment. The approach in this context is that of inductive reasoning. Mention can also be
made of the idealism, where knowledge is gained from the apriori process. Here, there is high
reliance on the concepts, which is created through the understanding of the business issues.
Reference can also be cited of the idealism, where the emphasis is on thinking and reasoning.
Agung and Darma (2019) states that logical reasoning adds value to the knowledge, averting
the influences created by the external challenges.

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In this context, The Gettier Problem can be relates, where the basic assumption is that
of the beliefs regarding justification and truth of the situations in spite of the fact that there
are failures in the process of measuring the quantitative knowledge. The conglomerate factor
of truths and beliefs results in the establishment of knowledge. Delving deep into the matter,
the problem deals with the difficulties in understanding of the descriptive knowledge. As a
matter of specification, the problems revolve around actual representation and possibilities.
Tautological evidences and supports have mostly failed to attain the status of a complete
knowledge. These aspects refute the traditionalism in knowledge. Attempts and researches in
this direction have resulted in the development and establishment of new concepts (De Luca
and Rubio 2019).
Reference can be cited of Certain True Belief (CTB) and Reliable True Belief
(RTB), where there are three conditions in this concept, which are: truth, belief and absolute
certainty. Scepticism related to knowledge is an obstacle in the process of gaining
information and knowledge. In this case, reliance on one factor is measured through the
means of indicators, which helps in measuring the effectiveness of the parameters of the
knowledge extraction and practical implementation. Harris and Ormond (2019) states that,
true belief originates from the certainty and reliability of the knowledge management. In this
context, Andries, De Winne and Bos-Nehles (2019) brings the aspect of reliable
epistemology, which states that a belief is knowledge is there is certainty and reliability in it.
Reliability type theory is related in this context for scanning the dynamics of believes.
According to the theory of knowledge acquisition, Empiricism is the knowledge,
which is gained from the experiences. In this context, Birou, Green and Inman (2019) is of
the view that rationalism is one of an important perspectives, where knowledge is gained
through the means of innate processes. Constructivism is one of the other essential aspects,
which is assistance in terms of gaining new insights into tautological knowledge. In this