from common to uncommon knowledge

௠ Academy of Management Journal
2012, Vol. 55, No. 2, 421–457. http://dx.doi.org/10.5465/amj.2008.0352 FROM COMMON TO UNCOMMON KNOWLEDGE:
FOUNDATIONS OF FIRM-SPECIFIC USE OF KNOWLEDGE AS
A RESOURCE
RAJIV NAG
Georgia State University
DENNIS A. GIOIA
The Pennsylvania State University
Although the knowledge-based view of strategy has significantly advanced understanding of the foundations of competitive advantage, less is known about how knowledge becomes a strategic resource. In this study, we develop an inductive, process model of the relationships among (1) top managers’ beliefs about knowledge as a resource (termed executive knowledge schemes), (2) the ways that executives search or scan for knowledge, and (3) how they use that knowledge in practice to transform common knowledge into distinctive, uncommon knowledge as a way of achieving competitive advantage. In the course of generating the grounded model, we also uncovered a new concept, scanning proactiveness, and identified two distinct forms of knowledge use in practice: knowledge adaptation and knowledge augmentation.

One of the most venerable observations about knowledge is Francis Bacon’s dictum that “knowledge is power.” Management scholars have now firmly established the role of knowledge as one of the key competitive resources of modern times
(Drucker, 1993; Penrose, 1959) and have underscored the importance of knowledge in strategic and competitive contexts by proposing a knowledge-based view of the firm (Grant, 1996; Kogut &

Zander, 1992). Proponents of this view not only treat knowledge as the principal strategic resource, but also argue that firms supersede markets in their ability to create and harness this resource (Kogut &
Zander, 1992). A central premise of the knowledgebased view is that knowledge that is largely tacit and grounded in the unique historical and social context of a firm can be a source of sustained competitive advantage, because such knowledge is difficult for competitors to

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