Competitiveness of Knowledge Intensive Services - eBRC

FRONTIERS OF E-BUSINESS RESEARCH 2004

Competitiveness of Knowledge Intensive Services Marjo Haataja1; Jussi Okkonen2 1 Research Assistant, Tampere University of Technology, [email protected] 2 Senior Researcher, Tampere University of Technology, [email protected] Abstract This paper examines three theoretical models that are used for describing competitiveness of a firm. All models are evaluated against the characteristics of knowledge intensive services (KIS). Such services refer to processes or projects that are using knowledge as an input to produce services or tangible goods that are complemented to services. This paper is based on a literature review of three theories that describe models of competitive advantage in contemporary business. The setting of the paper takes (1) classical approach, i.e. value chain analysis, (2) contemporary approach, i.e. resource- and knowledge-based views of a firm, and (3) emerging approach, i.e. complex adaptive system, under examination. All models considered above explain some basic perspectives of competitiveness but they also include some gaps that appear in the context of knowledge intensive organisations. It is essential to combine those theories and recognise which characteristics are valid and important when improving competitiveness. The main questions to be answered in this paper are: How are knowledge intensive services defined? What are the basic ideas of competitiveness models? How do the models explain and describe competitiveness of a service firm? The final outcome of the paper is a proposal concerning elements to take into account when building competitiveness model for knowledge intensive service firms. Keywords competitiveness, value chain analysis, resource-based view (RBV), knowledge-based view (KBV), complex evolving systems (CES) Acknowledgements The study for this paper is funded by National Technology Agency of Finland, e-Business Research Center and Professia in research program Knowledge and Information Management in Knowledge Intensive Services that is coordinated by the Institute of Business Information Management, Tampere University of Technology, Finland. The research program attempts to answer the challenges created by the increasing importance of services, knowledge and competences, the liberalisation of the services and the changes in their content and distribution channels, networking, innovations and globalisation. The purpose of the research program is to analyse services especially from the angle of knowledge and information management. We acknowledge Professor Marjatta Maula, Research Director of the research program Knowledge and Information Management in Knowledge Intensive Services.

255


Introduction Services are becoming increasingly important sector in our society. In Finland 68% of GNP consists of services. Almost 50 % of GNP is produced by private service sector and 18 % by public sector. Also the amount of knowledge production and creation is increasing extensively (Statistics Finland 2003). Due to a changed view of society and business, new understanding of competitiveness is needed. Especially, knowledge-intensive services are challenging classical and contemporary approaches to competitiveness. When new market value is consisting of intellectual and financial capital (Edvinsson and Malone 1997, 52), there should be a model explaining elements of competitiveness of knowledge intensive services from the dynamic and holistic point of view. Therefore, this paper will critically analyse some famous models and offer a new approach to complement our thinking. That new approach is complex evolving systems (CES), which should be considered more in strategic literature when studying competitiveness of knowledge and service organisations. Competition, competitiveness and competitive advantage are approached in many ways in literature. Also levels of their definitions are different. They can be firm-level, regional or national definitions of competitiveness. During the last decades success was explained through market shares, quality and customer satisfaction. Nowadays attention is called to competences and adaptation to technological and market changes (Mäkelin and Vepsäläinen 1995, 4). Often the concepts of competitiveness are not even defined clearly. Otala’s (2002, 31) definition of competitiveness is build of characteristics, which are important and vital. Those characteristics are: productivity, ability to produce high quality, regeneration and innovativeness. Competitiveness is based on competence of both individuals and the company. In this research it is assumed that all firms operate in a market and they try to get competitive advantage in relation to other firms. Even though competitive advantage is discussed in every chosen model, the term “competitiveness” is used for its higher versatility.

Knowledge intensive services When discussing the service sector, the traditional definitions of services are understood in literature as services that complement products. It is widely known that increasing number of manufacturing companies offer service solutions to clients as part of their business strategy (Grönroos 2000, 27). This inheritance of Industrial Age is about to change to the direction where intangible services are on focus in Knowledge Society. Nowadays the definitions of services are more diversified. As early as 1985 Nurmi (41-45) recognised that service organisations have many similarities to knowledge organisations. For this reason he combined them together in his typological approach to organisations. A similar idea is applied in this paper. Knowledge intensiveness means a business, where knowledge is playing a vital role. Services, products or processes can be knowledge intensive. Knowledge intensiveness is about how knowledge is produced and delivered, not about the amount or extent of knowledge. Knowledge intensive work requires a creative problem solving and abstract thinking. To succeed it requires especially complex knowledge processing and refining. It is not 256


mechanical information processing although it might include that too. Knowledge intensive firms include for example R&D, advertising, educational, consulting or management consulting companies (Järvenpää and Immonen 2002, 2-23). Viitanen (1993, 7) emphasises the role of professionals and special know-how in knowledge work. Services are intangible and often information- and consumer-intensive. Tailoring is produced according to client demand. Services are difficult to transport or store. Production and consumption takes place at the same time, so the product and the process are difficult to separate from each other. (Boden and Miles 2000, 8) Otala (2002, 32) has defined characteristics of competence intensive organisations. Among these are high input to R&D in relation to turnover, high competence in human resources and cooperation with the research institutes. In addition the production technology is of high quality and difficult to imitate, and price is not the most important factor. National Technology Agency of Finland, TEKES (2002), has classified knowledge and competence intensive services into following three categories: knowledge intensive business services (KIBS), new technology related services, and product and production integrated services. Kemppilä and Mettänen (2004, 17) have summed up features of knowledge intensive services: (See also Løwendahl 2000) -

Knowledge is highly appreciated and it has strong position as an input resource. Services are mainly based on professional skills. Services are sources of knowledge or competence to their user, or services are used as input in order to develop competences of the clients. There is a lot of intensive interaction between a client and a supplier when knowledge is delivered and created.

Knowledge intensive services are developed in continuous interaction with the clients because KIS are often customised to special needs and their life cycles are short (Järvenpää and Immonen 2002, 2-17). The importance of personal service and knowledge refining is very high (Nurmi 1985). Thus, the quality of personal service and knowledge are valuable resources for a service firm. According to Løwendahl (2000, 99), the structure of the organisation and the nature of the projects and other activities are complex and cross the organisational boundaries. Internal communication can facilitate more active internal networks. Low hierarchy may enhance innovations and creativity which are essential when pursuing better service and therefore competitiveness. The formal structure establishes broad responsibilities and channels of communication, but since the tasks change and dimensions increase, informal coordination matters (Løwendahl 2000, 96). Järvenpää and Immonen (2002, 46-47) see that external networks are important in addition to internal networks. They also consider learning essential in knowledge organisations. In knowledge intensive service organisations, such as professional organisations, work process is not based on routines but rather on personal commitment. It requires abstract thinking where teamwork will help the project or other service activity to succeed (Järvenpää and Immonen 2002, 4). Division of labour extends from routines to complex problem solving. Moreover, organisation culture should emphasise the development and identification of innovations. Still, problem solving and creative thinking can transform into routines in the long run. (Løwendahl 2000) 257


At the same time, working in knowledge intensive service firms is interactive by nature. According to Løwendahl (2000, 116), the value creation process of the professional service firms can be illustrated as follows: (1) selling a credible promise to client, (2) delivering the promised value, and (3) learning from the process to improve future activities. The same value creation process can be adapted to various kinds of knowledge intensive organisations. Knowledge Intensive Business Services (KIBS) is very close to KIS by definition. KIBS means all kinds of services in business that are knowledge intensive (Miles 2001, 3). KIBScompanies can be divided into traditional professional services and services based on new technology (Miles et al. 1994, 19-20). In KIBS the amount of project tailoring is high and there is only little or no standardisation. Tacit knowledge is economically important when producing profitable results and there is always close interaction between the client and the KIBS-companies (Werner 2001, 50). Hermelin (2001, 26) on the other hand discusses rather about professional business services than KIBS. Like many others, she emphasises the role of highly skilled employees, public and private sector cooperation and service production. Muller and Zenker (2001) specify three most common characteristics of KIBS that should be highlighted: knowledge intensiveness of services (which separates them from other services), consultancy-function (i.e. solving function), and service production in close interaction with the client (client orientation).

Classical approach In this chapter value chain analysis is presented and analysed as a classical approach to competitiveness. Value chain analysis is a traditional and production-oriented view to describe how additional value for the customer is produced. Benefits and key problems of value chain analysis are considered from the knowledge intensive services point of view. Value chain analysis Porter’s (1985) value chain analysis is one of the most popular models explaining how to achieve competitive advantage. Value chain analysis helps to understand the impact of the firm’s activities on cost and value. According to Porter, the model is valid in all industries. Activities are divided into primary and support activities (Figure 1). Primary activities include inbound logistics, operations (e.g. manufacturing), outbound logistics, marketing and sales, and after-sales service. Support activities include firm infrastructure (e.g. finance, planning), human resource management, technology development, and procurement. Every activity in the process creates value for the customer through the performed activities. A firm is profitable if the total cost of the product or service is less than the customer is willing to pay. Thus, the value is created through the chain of activities. Porter (1990) emphasises that the value chain should be managed as a system rather than a collection of separate activities.

258


Organisation infrastructure Support activitites

Human Resource Management Technology Development Procurement Logistics

Operations

Outbound logistics

Marketing & Sales

Service

Margin

Primary activitites

Figure 1. Porter’s value chain (Porter 1985). Porter and Millar (1985, 150) highlight that information changes industry structure, alters the rules of competition, and generates whole new businesses. Porter (1990) has adapted also services in addition to information to value chain model but there is still some lack of interaction in this model. Besides, Porter’s ideas include the assumption of growth but some knowledge intensive service firms might not try to grow or internationalise their business. Sometimes there is even resistance to growth.1 Also the degree of customisation and degree of intangibility can not always be described in terms of value chain analysis because, for example in professional services such as hospitals, public and organisational objectives and moral codes challenge the profit thinking. Many advanced models and ideas, such as value shops and value networks, have been developed by utilising the value chain model. Value networks encompass much more than the flow of products, services, and revenue of the traditional value chain (Allee 2000, 39). Stabell and Fjeldstad (1998) introduce the new term ‘value shop’, which refers to further development of value chain analysis. Its key value driver is reputation when the term value chain refers to key cost drivers, which are scale and scope. The value creation logic of the value chain is equivalent to transformation of inputs into products. Stabell and Fjeldstad (1998) claim that value creation logic of hospitals, professional service firms, and educational institutions (i.e. KIS) are based on solving and resolving the customer’s problems. Firms that can be modelled as value shops have for example the following two characteristics. The first one is value information asymmetry and the second one is a configuration that can deal with unique cases and cyclical, iterative and interruptible activities. Considering the nature of knowledge intensive services it is easy to notice that Porter’s value chain model is truly made for manufacturing companies and may be functional in that context, whereas value shop may be more suitable for knowledge intensive service firms. Normann and Ramírez (1993, 69) have presented new value creation logic where interactive strategy and competitive advantage is based on the transformation of value chain to value constellation. This new value creation logic means that also customers create value for themselves. Instead of just the supply chain the whole company has to utilise relationships in networks.

1

On the other hand, many services can be produced globally and there are growth interests depending on the clusters where services are produced.

259


Knowledge creation and service processes can be developed in every activity of the chain and new configurations of value chain (i.e. value shop, value network) should be implemented. Value chain contributes well to cost accounting and although price is not on focus in knowledge intensive services, value creation is important to notice. The main problem of value chain analysis is that it describes activities of manufacturing companies where products are delivered to the client but it does not recognise interaction with the client during the activities. Also the primary focus of value chain is unclear: is the focus really on the value for the client and high quality or on cost reduction and successful pricing?

Contemporary approaches In this chapter the resource-based view (RBV) and the knowledge-based view (KBV) are considered as contemporary approaches to competitiveness e.g. explaining competitive advantage. Both models are presented briefly although the demand for wider discussion is high. Benefits and key problems of the RBV and the KBV are considered from the KIS point of view. The resource-based view The roots of the resource-based view (RBV) can be found in the work of Penrose (1959), Wernerfelt (1984) and Barney (1991). The RBV attempts to explain how companies can gain sustainable2 competitive advantage through resource analysis which is the core of design and implementation of appropriate strategy. The RBV refers to internal analysis and it attempts to scan for internal strengths and weaknesses. According to Wernerfelt (1984, 172), resources include brand names, in-house knowledge of technology, recruiting of skilled personnel, trade contacts, machinery, efficient procedures and capital. Barney (1991, 101) adds firm attributes, information and knowledge to the list of Wernerfelt. Actually, Barney categorises all kinds of resources into three main categories: physical, human and organisational capital. (e.g. physical: machines or plants, human: proprietary know-how, and organisational capital: reputation of the firm). To reach sustainable competitive advantage the resources must be valuable, rare, imperfectly imitable, and the degree of substitutability must be low (Barney 1991, 105). In the RBV the basic assumption of the organisation is quite internal and static, and the strategy-resource -analysis is always made afterwards. Managers have the greatest power when allocating resources in a right way, and therefore planning and decision making are also highlighted in this model. Similarly, in their research of IT-cluster Mata et al. (1995) have concluded that managerial skills are the most important resource to contribute to the sustainable competitive advantage. Still, we have to remember Simon’s (1957) idea of bounded rationality which means that since individuals are limited in the capability of processing information, so too are organisations. A successful strategy is formulated through analysis of resources, decision making (bounded rationality), and ambiguous and unique history of the firm. The possibility of innovation and learning is to happen through the previously mentioned processes of strategy formation. So, the main problem of the RBV is 2

Sustainable is problematic. It is always relative and connected to time and place. It is still used here because the authors originally use it.

260


that it emphasises mainly decision-making and managerial skills and not enough learning and innovation of the whole organisation (bounded rationality). Anyway, the RBV clarifies strategic thinking and strategy formation from its own internal perspective. It is good basis to consider rare and valuable resources in KIS. Still, it focuses on static and internal analysis when it should be more dynamic. It neither studies interfaces between individuals. Also, applications of the RBV in practice are difficult to implement. The knowledge-based view The knowledge-based view (KBV) emphasises the role of knowledge for organisations. Performance gained via knowledge has received attention since the 1960s (Machlup 1962, Nonaka 1994, Grant 1996, Spender 1996, Liebeskind 1996). The resource-based view considers knowledge as a general resource. In the end, the studies in the various fields of knowledge management claim that knowledge has many characteristics such as tacit and explicit features. Due to specific dimensions of knowledge Kaplan et al. (2001) see, that knowledge should be analysed separately from other resources. Sveiby (2001, 1) sees that knowledge is dynamic, personal and clearly different to data or information. Grant (1997, 451) sees knowledge as a strategically important input in production while producing additional value. According to Grant (1997, 452) competitive advantage can be achieved if tacit knowledge is integrated widely in organisation and replicated inside the organisation. Grant reminds that copying should be prevented. Most famous model emphasising the KBV is extensively known knowledge configurations of Nonaka (1994, 20). Value creation is based on explicit and tacit knowledge transfer between individuals and knowledge configurations from one form to another. Competitive advantage is explained via knowledge creation, knowledge configurations and knowledge sharing. The additional value is created through knowledge. The KBV recognises the importance of human resources, competences and intellectual capital in competitiveness. It emphasises that active and interactive communication enables better quality of services. Key problems of the KBV concern the role of knowledge: difficulties in the verification of different knowledge forms, firm-specific nature as a resource and casespecificity of applications. Can knowledge be considered as the most important resource of a firm? The RBV and the KBV are often mentioned in contemporary research about knowledge intensive organisations. Viitanen (1993, 134) sees that the resource-based view fits well to knowledge organisations, where human competences constitute the basis of business. According to Ahonen (1996, 119), knowledge organisations are resource-driven which emphasises the importance of the internal resources, competences and human resources in relation to the demands of its owners, clients and competition in a certain business. Grönroos (2000, 249) emphasises that an active and interactive system guarantees the quality of service due to an appropriate coordination of resources. Thus, the simple recognition of resources is not enough. Resources must be well selected and connected to functional strategy.

261


Emerging approach Emerging approaches to competitiveness include here the theories of Complex Adaptive Systems (CAS) and Complex Evolving Systems (CES). In this study the term CES is used, although some of its concepts are contributions of CAS. The sudden appearance of CES into this research is a conscious selection of the authors. CES is different from classical or contemporary approaches and it is a holistic point of view to organisation and its change. When considering competitiveness of KIS firms, new models and approaches are needed. CES concepts are multidisciplinary and creative approaches to complement strategic thinking. Complex evolving systems According to Mitleton-Kelly3 (2003, 23) Complex Evolving Systems (CES) is an approach to understand dynamical change. CES is only one approach to a larger concept called complexity. Other approaches to complexity are for example dissipative structures, chaos theory, autopoiesis and increasing returns. Several theories are arising from various natural sciences such as chemistry-physics, evolutionary biology, computer simulation, mathematics etc. (Mitleton-Kelly 2003, 23-24) CES is a system with interaction. The systems can be social, ecological, economical, cultural, political, technological, traffic systems etc. (Dooley 1997, 77). When considering competitiveness, CES should be considered from many different angles and applied to study of knowledge intensive services. Central concepts of CES are self-organisation, non-linearity and emergence. Self-organisation enables learning and organisational change (Dooley 1997) and it is a key characteristic of complexity (Prigogine 1997, 205). Complexity shifts the emphasis from control to enabling environments and relationships (Mitleton-Kelly 2004). Maturana and Varela (1992, 47-74) describe self-organisation as autopoiesis where reproduction is emphasised. According to Mitleton-Kelly (2004) self-organisation means the action in human organisation, where agents spontaneously come together to undertake an activity not directed by an external agency. Thus, self-organisation is not the same as selfmanaging. Non-linearity can be defined through “non-linear systems. They display complex patterns of behaviour that are not proportional to their multiple causes” (Fitzgerald and Eijnatten 2002, 420). But what is a linear system? A linear system is one in which the chain of cause and effect can be easily ascertained. Emergence means something new, surprising and unexpected (Mitleton-Kelly 2004). Also, according to Fitzgerald and Eijnatten (2002, 416) emergence is a novel, sudden appearance of new order. So, it is an overall system behaviour that comes out of the interaction of many participants (Lissack 1999, 2). In complex evolving systems individuals can be regarded as agents that are connected with each other within the system where they can interact. Because agents are connected together, the behaviour of a certain agent can have an impact on the system and other agents. All agents observe and act on local information and co-evolve with one another. Co-evolution means that each agent adapts to its environment striving to map and increase the fitness in the business landscape. The linkages between agents may evolve over time and change the pattern describing the strength of connections. (Anderson 1999, 219-220) While co-evolving they are also competing with each other for resources and information (Dooley 1997, 76). 3

Mitleton-Kelly uses the term Complex Evolving Systems (CES) instead of Complex Adaptive Systems (CAS) in her research for example because social systems differ from the biological ones.

262


In knowledge intensive services information asymmetry might produce non-linearity and lots of interaction. If all the members co-evolve and the system self-organises, complexity is an appropriate way to describe the processes of the firm and its certain pattern of behaviour. According to Dooley (1997, 92), a truly complex adaptive evolving system would appear best suited in semi-turbulent and turbulent environments where change is imminent and frequent. But how are the concepts of CES actually explaining competitiveness? Each one of CES concepts is a dynamic approach to an organisation and attempts to explain how all agents in the organisation emphasise new value creation logic i.e. self-organisation in the chaos and striving for better fitness in business landscape. Concepts of CES are capable of explaining competitiveness in dynamical environment where new approaches are needed but it demands deep understanding, and advanced modelling. CES has a comprehensive grip to organisations: when understanding dynamic complexity it is possible to understand the whole organisation and its activities. CES emphasises learning, continuous change and interaction and it complements classical and contemporary approaches of competitiveness. Still, there are some critical questions if CES is for pragmatic use or if it is only a metaphor? How about modelling? There are only few applications in practice, so more empirical applications are needed.

Competitiveness model of knowledge intensive services Building blocks in competitiveness model of knowledge intensive services When considering characteristics of KIS firms, vital competitiveness factors include knowledge, competences, professional skills, networks, R&D-function, and innovations. Competence and knowledge are inputs to production in KIS. A service is based on interaction where professionals and clients cooperate. In the changing business environment the companies have to commence in networking. Networks also act as channels for communication and knowledge creation. In networks knowledge and competences accumulate. Innovation rate augments due to low organisational hierarchy. Inputs that promote competences and innovations may create good opportunities for companies and be also good basis for the R&D. The most important input in networks is knowledge that facilitates creativity and innovation. Knowledge intensive services are often in a continuous change. Emergence and selforganising is happening all the time. As this study has shown, many different models are explaining same phenomena from different angles or with different words. In value chain analysis the main purpose should be value creation for the client and high quality of the services. Interaction with the customer should be taken into account in every activity of the chain. When considering the RBV it is possible to notice that some resources are vital to competitiveness. Examples of them are competences, professional skill and other intangible capitals. Also the KBV is recognising this value creation in an intangible level. When emphasising the role of professionals to achieve competitive advantage, the new approaches may favour low hierarchy or at least a consideration of the need for forms of control. Naturally the managerial skills are important but they should be seen as resources to 263


create conditions that facilitate innovations and self-organisation. In innovations complexity is needed. Not detailed complexity but dynamic complexity to increase sensitivity towards weak signals and to contribute to innovations in the R&D-department and whole organisation. Through new routines and non-linearity in organisations it is possible to achieve new order (i.e. emergence) caused by non-linear knowledge creation and sharing. (Haataja and Okkonen 2004, 27)

Conclusions Knowledge intensive services refer to processes or projects that are using knowledge as input to produce services. Abstract thinking and interaction with the clients are essential. All models considered above explain some basic perspectives of competitiveness but all of them include some gaps that appear in the context of knowledge intensive services. Value chain analysis explains the logic of value creation for the customer but it is very mechanistic and its functionality is based on stable organisation. However, the environment of the knowledge intensive services is turbulent and dynamic. Moreover new configurations of value chain (i.e. value shop and value network) and new ideas of value creation by Løwendahl (2000), and Normann and Ramirez (1993) should be taken into account. The RBV explains the power of both rightly selected resource bundles and strategy but the process is one-way. Managers are almost the only actors and decision-makers even though the power should be distributed throughout the whole organisation. Both value chain and the RBV are valuable when analysing the firm internally and in a static way. The KBV and the concepts of CAS are dynamic and they describe the organisation as a dynamic entity where interaction with the client is important. In the KBV knowledge creation is carried out in certain context. Thereby it emphasises the communication and co-operation to reach the best result even though asymmetry of the information might injure the process easily. When considering the most applicable concept of CES, self-organisation could be applied to understanding of competitiveness in knowledge intensive services. In dynamic environments self-organisation is associated with interaction so that the customer-producer–process is interconnected. Thus, the KBV is valuable but the linkage between the internal and the external actor (e.g. agents) is not so tightly connected than in self-organisation concept. In KIS organisations the process with the client is complex, interactive and vulnerable. When all agents in the organisation emphasise new value creation logic (i.e. self-organisation) improved competitiveness can be achieved. When considering the building blocks in competitiveness model of KIS, many intangible resources of the different models are adapted into that new model. Those elements include knowledge, competences, professional skills, networks, R&D and innovativeness. From value chain analysis perspective, those building blocks produce value for the client in every activity. From CES perspective value is created through non-linear interactions, where selforganisation creates new order and high quality for the organisation. Through emergence innovative environments and new ways to develop competitiveness in knowledge intensive services can be created.

264


References Ahonen, A. 1996. Organisaatio tietoyhteiskunnassa: Tulkintoja tieto-organisaatiodiskurssista kriittisen organisaatioteorian perspektiivistä. Turku: Turun kauppakorkeakoulun julkaisuja. Sarja D3:1996. Allee, V. 2000. Reconficuring the Value Network. Journal of Business Strategy. Vol. 21. No. 4, 36-39. Anderson, P. 1999. Complexity Theory and Organization Science. Organization Science. Vol. 10. No. 3. Special Issue: Application of Complexity Theory to Organization Science, 216-232. Barney, J. 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management. Vol. 17. No. 1, 99-120. Boden, M. & Miles, I. (ed.) 2000. Services and the Knowledge-based Economy. London: Continuum. Dooley, K. J. 1997. A Complex Adaptive Systems Model of Organization Change. Nonlinear Dynamics, Psychology, and Life Sciences. Vol. 1. No. 1, 69-97. Edvinsson, L. & Malone, M. S. 1997. Intellectual capital: Realizing your company’s true value by finding its hidden brainpower. New York: HarperBusiness. Fitzgerald, L.A. & Eijnatten, F.M. 2002. Chaos Speak: a Glossary of Chaordic Terms and Phrases. Journal of Organizational Change Management. Vol. 15. No. 4, 412-423. Grant, R.M. 1996. Toward a Knowledge-based Theory of the Firm. Strategic Management Journal. Vol.17. Special Issue: Knowledge and the firm, 109-122. Grant, R.M. 1997. The Knowledge-based View of the Firm: Implications for Management Practice. Long range planning. Vol. 30. No. 3, 450-454. Grönroos, C. 2000. Nyt kilpaillaan palveluilla, 5th edition. Porvoo: WS Bookwell Oy. Haataja, M. & Okkonen, J. 2004. Competitiveness – Traditional models and CAS-approach. Proceedings of International Conference On Service Systems and Service Management, Beijing, July 19.-21.2004. International Academic Publishers/Beijing World Publishing Corporation, Vol. 1, 25-29. Hermelin, B. 2001. Location of Professional Business Services – a Swedish Case Study in Toivonen (ed.) Growth and Significance of Knowledge Intensive Business Services (KIBS). Helsinki: Uusimaa TE Centre’s publications 3, 26-36. Järvenpää, E. & Immonen, S. 2002. Tietointensiivisten organisaatioiden dynamiikka: tietotyö, johtaminen ja organisaatioiden verkostot. Working paper No 28/2002/Work and Organizational Psychology and TAI Research Centre. Espoo: Teknillinen korkeakoulu. Kaplan, S., Schenkel, A., von Krogh, G. & Weber, C. 2001. Knowledge-based theories of the firm in strategic management: A review and extension. Unpublished: submission to the academy of Management review. Internet version: , 22.11.2004. Kemppilä, S. & Mettänen, P. 2004. Tietointensiivisiä palveluyrityksiä koskevan tutkimuksen nykytila. Helsinki: Tekes. Liebeskind, S. 1996. Knowledge, Strategy, and the Theory of the Firm. Strategic Management Journal. Vol.17. Special issue: Knowledge and the firm, 93-107. Lissack, M.R. 1999. Complexity: the science, its vocabulary and its relation to organizations. Emergence. Vol. 1. No. 1, 110-126. Løwendahl B. R. 2000. Strategic Management of Professional Service Firms, 2nd edition. Denmark: Copenhagen Business School Press. Machlup, F. 1962. The Production and Distribution of Knowledge in the United States. New York: Princeton University Press. Mata, F., Fuerst, W. & Barney, J. 1995. Information Technology and Sustained Competitive Advantage: A Resource-Based Analysis. MIS Quarterly. Vol. 19. No. 4, 487-505. Maturana, H.R. & Varela, F.J. 1992. The tree of knowledge: The biological roots of human understanding. Revised edition. Boston&London: Shambala.

265


Miles, I. 2001. Taking the Pulse of the Knowledge-Drive economy: the Role of KIBS in Toivonen (ed.) Growth and Significance of Knowledge Intensive Business Services (KIBS). Helsinki: Uusimaa TE Centre’s publications 3, 1-25. Miles, I., Kastrinos, N., Flanagan, K., Bilderbeek, R., den Hertog, P., Huntink, W. & Bouman, M. 1994. Knowledge-intensive business services: their roles as users, carriers and sources of innovation. Manchester: Prest. Mitleton-Kelly, E. 2003. Complex systems and evolutionary perspectives on organisations: the application of complexity theory to organisations. Amsterdam: Pergamon. Mitleton-Kelly, E. 2004. The theory and application of complexity in Rolls-Royce Marine and The modernisation Agency, NHS. Presentation at “Complexity in business. Complexity research meets future studies international seminar”, Helsinki, November 12.2004. Exystence NoE. Muller, E. & Zenker, A. 2001. Business Services as Actors of Knowledge Transformation: the Role of KIBS in Regional and National Innovation Systems. Research Policy. Vol. 30. No. 9, 15011516. Mäkelin, M. & Vepsäläinen, A.P.J. 1994. Kilpailu kyvykkyydellä, 2nd edition. HM&V Research Oy. Helsinki: Hakapaino Oy. Nonaka, I. 1994. A Dynamic Theory of Organisational Knowledge Creation. Organization Science. Vol. 5. No. 1, 14-37. Normann, R. & Ramirez, R. 1993. From Value Chain to Value Constellation: Designing Interactive Strategy. Harvard Business Review. Vol. 71. No. 4, 65-77. Nurmi, R. 1985. Tietoyhteiskunnan organisaatiot: typologinen tarkastelu. Turun kauppakorkeakoulun julkaisuja. Turku: Sarja A-6: 1985. Otala, L. 2002. Oppimisen etu – kilpailukykyä muutoksessa, 4th edition. Porvoo: WS Bookwell Oy. Penrose, E.G. 1959. The Theory of the Growth of the Firm. New York: Wiley. Porter, M.E. 1985. Competitive advantage: creating and sustaining superior performance. New York: Free Press. Porter, M.E. 1990 The Competitive Advantage of Nations. London: MacMillan. Porter, M.E. & Millar, V. 1985. The Transformation Revolution is Transforming the Nature of Competition: How Information Gives You Competitive Advantage. Harvard Business Review. Vol. 63. No. 4, 119-160. Prigogine, I. 1997. The end of certainty: time, chaos, and the new laws of nature. New York: The Free Press. Simon, H. 1957. Administrative Behaviour. New York: Macmillan. Spender, J.C. 1996. Making Knowledge the Basis of a Dynamic Theory of the Firm. Strategic Management Journal. Vol. 17. Special issue: Knowledge and the Firm, 45-62. Stabell, C.B. & Fjeldstad, O.D. 1998. Configuring Value for Competitive Advantage: On Chains, Shops and Networks. Strategic Management Journal. Vol. 19. No. 5, 413-437. Statistics Finland. 2004. Finland in Figures. National Accounts. Gross domestic product by industry, %. , 20.11.2004. Sveiby, K.E. 2001. A Knowledge-based Theory of the Firm to Guide Strategy Formation. Article for Journal of Intellectual Capital, Vol. 2, No. 4. Internet version: , 28.11.2004. TEKES: National Technology Agency of Finland. 2002. The future is on knowledge and competence. Helsinki: TEKES. Internet version: , 20.10.2004. Viitanen, P. 1993. Strategian muotoutumisprosessi ja strategiset muutokset tietointensiivisessä organisaatiossa. Turku: Turun kauppakorkeakoulun julkaisuja sarja D-2:1993. Werner, R. 2001. Knowledge-Intensive Business Services in the Oulu Region – Business Develompent and Geographical Linkage in Toivonen (ed.) Growth and Significance of Knowledge Intensive Business Services (KIBS). Helsinki: Uusimaa TE Centre’s publications 3, 49-64. Wernerfelt, B. 1984. A Resource-Based view of the Firm. Strategic Management Journal. Vol. 5, No. 2, 171-180.

266