THE ORGANIZATIONAL FRONTIERS SERIES The Organizational Frontiers Series is sponsored by the Society for Industrial and Organizational Psychology (SIOP). Launched in 1983 to make scientific contributions to the field, the series has at- tempted to publish books that are on the cutting edge of theory, research, and theory-driven practice in industrial/organizational psychology and related organizational science disciplines. Our overall objective is to inform and to stimulate research for SIOP members (students, practitioners, and researchers) and peo- ple in related disciplines, including the other subdisciplines of psy- chology, organizational behavior, human resource management, and labor and industrial relations. The volumes in the Organiza- tional Frontiers Series have the following goals: 1. Focus on research and theory in organizational science, and the implications for practice 2. Inform readers of significant advances in theory and research in psychology and related disciplines that are relevant to our research and practice 3. Challenge the research and practice community to develop and adapt new ideas and to conduct research on these developments 4. Promote the use of scientific knowledge in the solution of public policy issues and increased organizational effectiveness The volumes originated in the hope that they would facilitate continuous learning and a continuing research curiosity about organizational phenomena on the part of both scientists and practitioners. Previous Frontiers Series volumes, all published by Jossey-Bass, include: Work Careers Daniel C. Feldman, Editor Emotions in the Workplace Robert G. Lord, Richard J. Klimoski, Ruth Kanfer, Editors Measuring and Analyzing Behavior in Organizations Fritz Drasgow, Neal Schmitt, Editors The Nature of Organizational Leadership Stephen J. Zaccaro, Richard J. Klimoski, Editors Compensation in Organizations Sara L. Rynes, Barry Gerhart, Editors Multilevel Theory, Research, and Methods in Organizations Katherine J. Klein, Steve W. J. Kozlowski, Editors The Changing Nature of Performance Daniel R. Ilgen, Elaine D. Pulakos, Editors New Perspectives on International Industrial/Organizational Psychology P. Christopher Earley and Miriam Erez, Editors Individual Differences and Behavior in Organizations Kevin R. Murphy, Editor The Changing Nature of Work Ann Howard, Editor Team Effectiveness and Decision Making in Organizations Richard A. Guzzo, Eduardo Salas, and Associates Personnel Selection in Organizations Neal Schmitt, Walter C. Borman, and Associates Work, Families, and Organizations Sheldon Zedeck, Editor Organizational Climate and Culture Benjamin Schneider, Editor Training and Development in Organizations Irwin L. Goldstein and Associates Productivity in Organizations John P. Campbell, Richard J. Campbell, and Associates Career Development in Organizations Douglas T. Hall and Associates Managing Knowledge for Sustained Competitive Advantage Designing Strategies for Effective Human Resource Management Susan E. Jackson Michael A. Hitt Angelo S. DeNisi Editors Foreword by Neal Schmitt Copyright © 2003 by John Wiley & Sons, Inc. All rights reserved. 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To contact Jossey-Bass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986 or fax 317-572-4002. Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data Managing knowledge for sustained competitive advantage : designing strategies for effective human resource management / Susan E. Jackson, Michael A. Hitt, Angelo S. DeNisi, editors. p. cm. Includes bibliographical references and index. ISBN 0-7879-5717-8 (acid-free) 1. Knowledge management. I. Jackson, Susan E. II. Hitt, Michael A. III. DeNisi, Angelo S. HD30.2.M3646 2003 658.4’038—dc21 2002154863 Printed in the United States of America FIRST EDITION HB Printing 10987654321 The Organizational Frontiers Series SERIES EDITOR Neal Schmitt Michigan State University EDITORIAL BOARD Robert L. Dipboye Rice University Fritz Drasgow University of Illinois Jennifer George Rice University Katherine J. Klein University of Maryland Cheri Ostroff Teachers College-Columbia University Richard D. Pritchard Texas A&M Neal Schmitt Michigan State University Contents Foreword xi Neal Schmitt Preface xv The Contributors xvii Part One: Introduction 1 The Knowledge-Based Approach to Sustainable Competitive Advantage 3 Angelo S. DeNisi, Michael A. Hitt, Susan E. Jackson Part Two: Work and Organizational Designs for Knowledge-Based Competition 2 Alternative Strategies for Acquiring Knowledge 37 David L. Deeds 3 Organizing for Knowledge-Based Competitiveness: About Pipelines and Rivers 64 C. Marlene Fiol 4 Designing Work for Knowledge-Based Competition 94 Susan Albers Mohrman Part Three: Staffing Organizations for Knowledge-Based Competition 5 Managing the Human Resource Architecture for Knowledge-Based Competition 127 David P. Lepak, Scott A. Snell 6 Hiring for Knowledge-Based Competition 155 Elaine D. Pulakos, David W. Dorsey, Walter C. Borman ix x CONTENTS 7 Contracting Talent for Knowledge-Based Competition 178 Alison Davis-Blake, Pamsy P. Hui Part Four: Developing and Motivating Employees for Knowledge-Based Competition 8 Knowledge Management: Developing Intellectual and Social Capital 209 Raymond A. Noe, Jason A. Colquitt, Marcia J. Simmering, Sharon A. Alvarez 9 Stimulating and Supporting Creativity in Organizations 243 Greg R. Oldham 10 Reward Systems in Knowledge-Based Organizations 274 Edward E. Lawler III 11 Retaining Knowledge by Retaining Technical Professionals: Implications of the Unfolding Turnover Model and the Job Embeddedness Construct 303 Steven D. Maurer, Thomas W. Lee, Terence R. Mitchell Part Five: Measuring Knowledge-Based Resources 12 Assessing the Culture and Climate for Organizational Learning 333 Lois E. Tetrick, Nancy Da Silva 13 Strategic Knowledge Measurement and Management 360 John W. Boudreau Part Six: Conclusion 14 Managing Human Resources for Knowledge-Based Competition: New Research Directions 399 Susan E. Jackson, Michael A. Hitt, Angelo S. DeNisi Name Index 429 Subject Index 443 Foreword This is the eighteenth book in a series published by Jossey-Bass that was initiated by the Society for Industrial and Organizational Psy- chology in 1983. Originally published as the Frontiers Series, the SIOP executive committee voted in 2000 to change the name to the Organizational Frontiers Series in an attempt to enhance its identity and visibility. The purpose of the publication of series vol- umes in a general sense has been to promote the scientific status of the field. Ray Katzell first edited the series. He was followed by Irwin Goldstein and Sheldon Zedeck. The topics of the volumes and the volume editors are chosen by the editorial board. The se- ries editor and the editorial board then work with the volume ed- itor in planning the volume, and occasionally, in suggesting and selecting chapter authors and content. During the writing of the volume, the series editor often works with the editor and the pub- lisher to bring the manuscript to completion. The success of the series is evident in the high number of sales—now over forty-five thousand. Volumes have also received excellent reviews, and individual chapters as well as entire volumes have been cited frequently. A recent symposium at the SIOP an- nual meeting examined the impact of the series on research and theory in industrial and organizational psychology. Although such influence is difficult to track, and volumes have varied in intent and perceived centrality to the discipline, the conclusion of most participants was that the volumes have made a significant impact on research and theory in the field and are regarded as represen- tative of the best the field has to offer. Another purpose of the series has been to bring scientific re- search from other disciplines to bear on problems of interest to industrial/organizational psychologists. This volume, edited by xi xii FOREWORD Susan E. Jackson, Michael A. Hitt, and Angelo S. DeNisi, provides an in-depth examination of how organizations—not individuals— can find, recruit, and manage knowledge. I/O psychologists cer- tainly train individuals and are often involved in educational efforts that enhance the knowledge of organizational members, but we do not often look at how the whole organization harnesses knowledge to strategic advantage. This is the focus of the current volume. Even thinking about knowledge in this way represents a departure