Managerial knowledge to organisational capability: new e‐commerce businesses

The knowledge and skills of individuals are widely considered to represent an important component of a firm's intellectual capital. The value of individuals’ knowledge is also recognised from a capability‐based perspective. While routines and capabilities are considered to act as the interface for the knowledge of individuals, an important and related issue is to examine how and to what extent individuals’ knowledge acts as the source of knowledge for the creation of firm‐based routines and capabilities. Four firms across two online sectors, online broking and ISPs, are selected for the empirical case study research. The findings highlight the importance of the role of prior organisational experience in the development of new routines and capabilities. It is shown that variations in the role of prior organisational experience across firms and sectors are better understood in respect of the architectural and component knowledge of which managerial knowledge consists.