Chapter 8 Using Knowledge Management to Gain Competitive Advantage in the Textile and Apparel Value Chain: A Comparison of Small and Large Firms

Knowledge theories have developed over the past 30 years ( Polanyi, 1966 ). However, it is only recently that knowledge has become regarded valuable asset in corporate boardrooms. Knowledge acquisition has become a critical resource for creating and sustaining competitive advantage as the competitive environment continues to intensify ( Hitt, Ireland, & Lee, 2000 ). As with other corporate assets, the processes surrounding the creation and transfer of knowledge must be managed with significant insight to derive the most value from knowledge investments ( Bhagat, Kedia, Harveston, & Triandis, 2002 ; Conner & Prahalad, 1996 ; Davenport & Prusak, 1998 ; Edvinsson & Malone, 1997 ; Stewart, 1997 ). The purpose of this chapter is to examine the significance of managing knowledge both within firm (internal knowledge) and across the value chain (external knowledge) for small and large firms. First, we review the literature on knowledge management systems and propose some hypotheses for internal and external knowledge management. Next, we present the data and follow this with the results. Discussion of the results follows, and the chapter closes with a number of managerial implications, limitations, and suggestions for future research.