Aligning HRM Practices and Knowledge Strategies:
A Theoretical Framework

Paul Bierly III
Paula Daly

Management Program
James Madison University

Abstract

The basic premise of our model is that a firm can enhance its knowledge base, and thereby positively affect firm performance, when human resource management practices are congruent with the firm's knowledge strategy. The knowledge base of the firm will positively affect overall organizational effectiveness through the creation of sustainable competitive advantages. Internal and external factors can also moderate this process. Firm characteristics, such as firm size, structure and culture, will influence the choice of HRM practices and will determine how a specific knowledge strategy changes the firm's knowledge base. Certain industry characteristics, such as the market structure and the strength of its existing regime of appropriability, will determine how the evolution of a firm's knowledge base will lead to superior performance.

The set of strategic choices addressing knowledge creation in an organization comprise the firm's knowledge strategy, which provides the firm with guidelines for developing intellectual capital and therefore creating competitive advantage. For each type of knowledge strategy there should be internal consistency between strategic actions and other organizational practices and systems. A knowledge strategy can be viewed as a firm's set of strategic choices regarding two knowledge domains: 1) the creation or acquisition of new knowledge, and 2) the ability to leverage existing knowledge to create new organizational products and processes. Using these two dimensions, we identify four types of knowledge strategies: Explorers, Exploiters, Bimodal Learners, and Maintainers. We further classify knowledge strategies depending whether the firm predominantly internally or externally sources knowledge.

To appear in "Strategic Management of Intellectual Capital and Organizational Knowledge" edited by Nick Bontis & Chun Wei Choo (Oxford University Press).