A Knowledge Based View of the Team

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Drawing on the works of Conner and Prahalad (1996), we advance their knowledge based view of the firm and developed the knowledge based view of the team. The central tenet of our knowledge based view is that the existence and effective performance of the team is hinged on the reciprocal knowledge substitution among team members. The core team process of reciprocal knowledge substitution mediates the relationship between knowledge heterogeneity in team composition and team performance. In particular, we posit that heterogeneous teams (in terms of knowledge composition) outperform homogenous teams only if positive substitution (the superior replacing the inferior) is in operation. Further, we reason that the reciprocal substitution process is modulated by the original (vertical) knowledge substitution in the firm structure. In essence, we expand the established market ↔ firm spectrum to market ↔ firm ↔ team, which exhibits (from market to team) the decreasing effect of transaction costs and the increasing effect of learning (knowledge substitution). In addition, we extrapolate our knowledge based view to the case of interfirm teaming (partnerships and alliances).