Increasing Knowledge Intensity

• Knowledge is the basis of technology and its application.
• information, intelligence, and expertise

  knowledge
• In 21st century's competitive landscape, knowledge is a critical organizational resource and an increasingly valuable source of competitive advantage.
• Starting in the 1980s, the basis of competition shifted from hard assets to intangible resources.
• an example of an intangible resource which needs to be managed

  relationships with customers and suppliers
• Knowledge is gained through experience, observation, and inference and is an intangible resource.
• The value of intangible resources is growing as a proportion of total shareholder value in today’s competitive landscape.
• Firms must develop and acquire knowledge, integrate it into the organization to create capabilities, and then apply it to gain a competitive advantage.
• A strong knowledge-base is necessary to create innovations.
• Firms lacking the appropriate internal knowledge resources are less likely to invest money in R&D.
• Firms must continue to learn (building their knowledge-base) because knowledge spillovers to competitors are common.
• hiring of professional staff and managers by competitors can cause

  knowledge spillovers
• Because of the potential for spillovers, firms must move quickly to use their knowledge in productive ways.
• Firms must build routines that facilitate the diffusion of local knowledge throughout the organization for use everywhere that it has value.
• If something such as knowledge or information is diffused, or if it diffuses somewhere, it is made known over a wide area or to a lot of people.
• is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

  strategic flexibility
• Strategic flexibility involves coping with uncertainty and its accompanying risks.
• Firms should try to develop strategic flexibility in all areas of their operations.
• Developing strategic flexibility is not easy because inertia (a tendency to do nothing) can build up over time.
• A firm’s focus and past core competencies may actually slow change and strategic flexibility.
• To be strategically flexible on a continuing basis and to gain the competitive benefits of such flexibility, a firm has to develop the capacity to learn.
• Continuous learning provides the firm with new and up-to-date skill sets, which allow it to adapt to its environment as it encounters changes.
• Firms capable of rapidly and broadly applying what they have learned exhibit the strategic flexibility and the capacity to change in ways that will increase the probability of successfully dealing with uncertain, hypercompetitive environments.