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To summarise this section, transferability is a key difference between tacit and
explicit knowledge. Explicit knowledge is easily transferred through communication, a
relatively simple process, whereas tacit knowledge is only revealed through its application
(Grant, 1996).
2.3 Knowledge Based View (KBV)
The knowledge based view is an extension of the Resource Based View (RBV) of
the firm (Eisenhardt & Santos, 2002). RBV theorists argue that resources are central to a
firm’s competitive advantage (Fahy, 2000). These resources can include assets, capabilities,
organisational processes, information and knowledge (Barney, 1991). When deployed in its
market, these selective key resources may sustain a competitive advantage (Fahy, 2000). In
order for an organisation to experience a sustainable competitive advantage, an
organisation’s resources, or at least their key resources, need to be rare, valuable and
imperfectly imitable (Barney, 1991). Intangible, rather than tangible resources are
recognised as being more likely to achieve all criteria (Eisenhardt & Santos, 2002; Fahy,
2000). Knowledge, especially in the tacit and uncodified form is clearly intangible. It is
now well recognised that a firm’s knowledge base can facilitate a significant competitive
advantage (Assundani, 2005; Eisenhardt & Santos, 2002; Grant, 1996; Inkpen, 1996).
There are two key assumptions to the KBV (Grant, 1997). The first is that both tacit
and explicit knowledge can be transferred. While tacit knowledge remains more difficult, it
is only transferred through its application requiring the receiver to have a significant level
of knowledge. The second KBV assumption is that individuals are the key source of
knowledge. It is individuals that are able to learn and access knowledge located across its
boundaries via different networks (Bell & Zaheer, 2007; Kogut, 1988; Lane & Lubatkin,
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