The dynamics of knowledge assets and their link with firm performance

Organizational knowledge assets have been identified as sources of competitive advantage. It is therefore critical that organizations understand how they impact on performance in order to effectively manage these assets. This paper aims to extend the “knowledge‐value chain”, recently introduced in the management literature, by integrating the concept of dynamic capabilities. Based on a systematic review of the literature it seeks to demonstrate the important role of dynamic capabilities in the relationship between knowledge asset management and firm performance. This paper aims to argue that the effective management of knowledge asset enhances the value of organizational competencies, which in turn support organizational processes, products and services. Dynamic capabilities take the role of continuously shaping operating routines and competencies, and consequently deliver superior long‐term performance.

The central objective of the article is to extend the work presented by Carlucci et al. with the concept of dynamic capabilities. Carlucci et al. introduce the “knowledge value chain” as a model linking knowledge assets with firm performance.

Based on an extensive systematic literature review, a recognized evidence‐based tool for theory building, the paper finds that dynamic capabilities represent a missing component in the relationship between knowledge assets and firm performance.

It is believed that the insights presented in this paper represent the theoretical basis for the development of a conceptual framework on how effective knowledge asset management affect the overall business performance and improve the value‐generating activity of a company.

The paper reveals that knowledge assets interact with each other through learning mechanisms and knowledge management processes enable the generation of new knowledge, and the development of organizational routines that form the building blocks of firm's competencies. These organizational competencies, hence, condition the efficiency and the effectiveness of business processes, and consequently the value of firm's products and services. Dynamic capabilities shape and systematically reconfigure organizational competencies, through assimilating new knowledge, and linking, organizing and integrating the generated knowledge into organizational routines.