Journal of Strategic Information Systems 21 (2012) 154–164

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Journal of Strategic Information Systems

journal homepage: www.elsevier.com/locate/jsis

How does social software change knowledge management? Toward

a strategic research agenda q
Georg von Krogh ⇑
ETH Zurich, Department of Management, Technology, and Economics, Kreuzplatz 5, 8032 Zürich, Switzerland

a r t i c l e i n f o a b s t r a c t

Article history: Knowledge management is commonly understood as IS implementations that enable pro-
Available online 25 May 2012 cesses of knowledge creation, sharing, and capture. Knowledge management at the firm
level is changing rapidly. Previous approaches included centrally managed, proprietary
Keywords: knowledge repositories, often involving structured and controlled search and access. Today
Knowledge-based view the trend is toward knowledge management by social software, which provides open and
Knowledge management inexpensive alternatives to traditional implementations. While social software carries
Information systems
great promise for knowledge management, this also raises fundamental questions about
Social software
Open innovation
the very essence and value of firm knowledge, the possibility for knowledge protection,
firm boundaries, and the sources of competitive advantage. I draft a strategic research
agenda consisting of five fundamental issues that should reinvigorate research in knowl-
edge management.
Ó 2012 Elsevier B.V. All rights reserved.

1. Introduction

Knowledge cannot be managed, only enabled. Yet lately, ‘‘knowledge management’’ has come to stand for information
systems (ISs) implementation that enables or supports processes of knowledge creation, sharing, and capture in organiza-
tions (e.g., Argote et al., 2003; Nonaka and von Krogh, 2009). Thus understood, knowledge management today is changing
fundamentally. Drawing increasingly on social software, it is becoming less costly, more cloud-based, ubiquitous, standard-
ized, and mobile, but also more personalized and more effective in meeting individual needs. Social software, also known as
Web 2.0 or Enterprise 2.0, is software that supports group interaction toward establishing communities, and creating and
exchanging content. In general, the increased use of social software by firms is often the result of a strategic imperative
for more openness toward the outside, including universities, suppliers, customers, users, etc. (Haefliger et al., 2011).
Often overlooked by IS scholars, the current changes in knowledge management at the firm level may have strong stra-
tegic implications. For example, they can cause disruption in the host firm’s boundaries and sources of competitive advan-
tage. This disruption does not only pertain to the potential loss of strategically relevant knowledge assets, but also to the
value of firm knowledge per se. A brief anecdote serves to illustrate the point. The CEO of a large professional services firm
overheard a group of consultants planning a presentation on an important strategic issue for a client, using industry and cus-
tomer information. One of the consultants said the best source of information would be Bloomberg’s free app, or other
sources that Google would turn up, rather than the company’s internal industry database. Looking into this further, the

q
I am very grateful to the reviewer team at JSIS, Bob Galliers, Sirkka Jarvenpaa, Yolande Chan, Kalle Lyytinen, as well as Andreas Schneider, Renato Sydler,
Sebastian Spaeth, and Stefan Haefliger, for excellent comments on a previous version of this paper. This project received support from the Swiss National
Science Foundation (Grant 100014-125513).
⇑ Tel.: +41 44 632 88 50; fax: +41 44 632 10 45.
E-mail address: gvkrogh@ethz.ch

0963-8687/$ - see front matter Ó 2012 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.jsis.2012.04.003
 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164 155

CEO discovered that much of the data and information used for client presentations were indeed gathered from publicly
available sources or consultants’ technology-enabled social networks, rather than internal knowledge management. The sig-
nificance of traditional knowledge management was dwindling for business consulting operations. Reflecting on what he
heard, the CEO was left with two questions. First, having invested extensively in knowledge management, how was he to
secure a positive return? The search behavior of organizational members obviously diminished the internal value of the
IS implementation. Second, and much more fundamentally, considering that knowledge was the raison d’être of the firm,
how much of the firm’s knowledge remained valuable and proprietary when critically important data, information, or expli-
cit knowledge were being imported from outside? This second question goes right to the heart of a strategic theory of the
firm, which is, how does knowledge relate to a firm’s boundaries and competitive advantage (Kale and Singh, 2007; Kogut
and Zander, 1992; Nonaka, 1994; Spender and Grant, 1996; Winter, 1987)? In a professional services firm—even when new
knowledge is created to support a client’s decision making, by combining reports, information, and data gathered by other
(possibly competing) individuals and firms—the organization’s ‘‘intellectual watermark’’ on knowledge creation may be less
than strictly beneficial to the firm.
This paper addresses how changes in knowledge management at the firm level may have strategic implications. In the
next section, I start with a brief introduction to work in the field of strategic management on knowledge, firm boundaries,
and competitive advantage. I also discuss the relationship between knowledge management and knowledge protection,
showing some risks and costs. The focus of Section 3 is on social software implementations and their impact on knowledge
management in the firm. In Section 4, I draft a strategic research agenda that results from changes in knowledge manage-
ment, followed by a section concluding the paper.

2. The strategic role of knowledge and how the firm protects it

The view adopted here is that where information can be understood as interpreted raw data, knowledge emerges through
deeper engagement with an activity, social process, and justification of beliefs. Knowledge is found on a tacit–explicit con-
tinuum; it can be individually embodied and socially embedded in practice, and it holds the potential for individual and so-
cial action (Nonaka and von Krogh, 2009).1 Knowledge can be shared though joint engagement in social practices, and toward
the explicit end of the continuum, where it may be reified, some knowledge can also be shared beyond groups, organizational
units, and even the firm (at least in the eyes of the enlightened ‘‘giver’’). The latter condition is important for strategic theories of
the firm, which otherwise would be challenged in explaining the gain and loss of competitive advantage. As argued elsewhere, I
do not consider the individual to be the only and privileged locus of knowledge (von Krogh, 2009). Rather, individuals engage in
social practices that are also origins of knowledge (Marabelli and Newell, 2012; von Krogh et al., 2012a).
In strategic management, the knowledge-based view of the firm (Easterby-Smith and Lyles, 2011; Grant, 1996; Kogut and
Zander, 1992; Nonaka, 1994; Spender, 1996) considers the firm as an assemblage of knowledge assets, processes, and con-
texts and sheds light on its relationship with firm performance (Nonaka and von Krogh, 2009). The knowledge-based view
has received increasing attention during the last 5 years2 as scholars increasingly succeeded in predicting firm behavior and
performance based on competitive advantage derived from knowledge (e.g., Wang et al., 2009). Thus, some long-standing and
complex puzzles of firm behavior were examined effectively from this perspective, including how the firm keeps knowledge
within its boundaries even though it is prone to spill over easily to competing firms (e.g., Bidwell and Briscoe, 2010; Nickerson
and Zenger, 2004).
In a fundamental and frequently cited piece, Liebeskind (1996) suggested that firms have ‘‘institutional capabilities.’’
These protect knowledge more effectively from imitation and expropriation than forms of market contracting, which sug-
gests an important link between the boundaries of the firm and knowledge. Liebeskind (1996, p. 105) notes:
‘‘[. . .] by deploying their generalized institutional capabilities, firms can ensure that knowledge that arises within their
organizational boundaries—be it arrived at through luck, history, or deliberate investment—remains their own, unique
asset for extended periods of time.’’

Assuming that some of the firm’s proprietary knowledge is a source of rent, the firm’s institutional capability to protect it
directly influences the firm’s rent-generating potential. Liebeskind (1996) defines three institutional capabilities. First, incen-
tive alignment capabilities ensure some control over transactions that include knowledge between firms, other organiza-
tions, and individuals to cover rewards and residual rights associated with that knowledge. For example, two scientists
who need each other’s expertise to develop a business can set up a firm with joint ownership in order to resolve a priori
any conflict over current and future intellectual property rights to the knowledge that may ensue from the collaboration.
Second, employment capabilities include contracts and define rules preventing individuals from leaking knowledge to the
outside. These cover work design that keeps knowledge compartmentalized and protected at the organizational level. For
example, a software firm can make different teams responsible for developing distinct and complementary software

1
As pointed out by one of the editors, knowledge can have other expressions than those found on the tacit–explicit continuum. The use of social media may
have different effects on knowledge in the firm, if expressions other than those discussed in this paper are included. This would be a topic suitable for future
research.
2
Almost 70% of all papers using the keyword ‘‘knowledge-based view’’ on Web of Science/Social Science Citation Index were published in the period 2007–
2011.
156 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164

modules, with some tightly controlled organizational units integrating those modules toward the final product. Any unau-
thorized release of a module by a team or individual will not jeopardize the commercial value of the overall software. Third,
re-ordering capabilities increase the future value of incentives for employees, which in turn reduces their mobility and the
lateral flow of knowledge to competitors. For example, firms can tie employees to the organization by making options part of
their total compensation.
A central argument in the knowledge-based view of the firm is that the development of these three institutional capabil-
ities makes firms more effective at protecting knowledge than legal mechanisms (Colombo et al., 2011; Hurmelinna-Laukka-
nen and Puumalainen, 2007; Liebeskind, 1996). However, since they are costly to build and deploy, institutional capabilities
require managers to answer two questions before doing so: what knowledge should be protected? And what instrument, or
combination of instruments, would be most appropriate to protect the firm’s knowledge (Liebeskind, 1996)? A critical
instrument known to the community of IS scholars is the knowledge protection which is mostly found in knowledge
management.
While one can attempt to manage activities, processes, and people, their individual and shared knowledge eludes man-
agement. ‘‘Knowledge management’’ is not knowledge process per se but it is often indispensable to enabling deeper and
more fundamental individual and organizational level processes (Alavi and Leidner, 2001). ‘‘Knowledge management’’ is
clearly a buzzword that has faded into the background for many firms and managers, or has been effectively replaced by
other concepts, perhaps for reasons of descriptive accuracy (Newell et al., 2002). However, there seems to have been a surge
in IS implementations that target knowledge processes in the management of complex organizations, for example due to the
need for creating and analyzing vast repositories of business data. Bloodgood and Salisbury (2001) suggest these IS imple-
mentations have two functions: to ‘‘codify’’ some knowledge in organizations and to create and visualize networks (Hansen,
1999; Hansen et al., 1999). First, data and information can be shared via IT—or stored in databases, decision support systems,
expert systems, and other repositories—and made transferable at low cost (Argote et al., 2003). Second, knowledge manage-
ment seeks to ‘‘represent’’ individuals, units, artifacts, and places where knowledge (including tacit knowing) is likely, and
thus facilitate and visualize networks in organizations (Jarvenpaa and Majchrzak, 2008). Through these two functions IS
implementations aim to enable knowledge processes. For example, corporate portals are gateways for employees to work
with knowledge in various locations, by providing access to tools, methods, relevant data, and information. These help peo-
ple apply, convert, and protect knowledge, e.g. through online chat, social network representations, corporate intranets, per-
sonal web pages, different media, yellow and blue pages, etc. (Al-Busaidi, 2011).
Erickson and Rothberg (2009) argue that the need for knowledge protection depends on the firm’s competitive situation.
For example, for firms in industries such as professional services, information and communication technologies, or pharma-
ceuticals, knowledge constitutes a large portion of the firm’s overall value and protecting it becomes a critical managerial
challenge approached through systems and technologies. Thus, most scholars consider data, information, and knowledge
protection endemic to some forms of knowledge management IS implementation (e.g., Al-Busaidi, 2011; Amiri, 2007; Lee
and Lan, 2011; Lin, 2011; Majchrzak and Jarvenpaa, 2010).
The operational aim of knowledge management at the firm level is to build institutional protective capabilities in two
ways (Bloodgood and Salisbury, 2001): to limit the number of employees who can access certain data and information,
and ensure that no single employee has access to all strategically relevant firm knowledge. More precisely, knowledge man-
agement may aim to contribute to incentive alignment capabilities by reducing individual opportunism, restricting access to
data and information, or detecting possible spillover of knowledge, information, and data to the outside. Employment capa-
bilities may be operationalized by efficiently partitioning data and information (e.g. data delivery to traders in a bank), and
later synthesizing it where needed (e.g. risk management in a bank, based on data from individual traders). Moreover, IS
implementations may be used to establish ‘‘re-ordering capabilities’’ by storing information over time about how employees
put their knowledge to work, and linking these to future incentives (e.g. tracking the performance of equity traders through-
out a period of observation and linking this to a bonus at the end of the period).
While knowledge management is instrumental in building protective capabilities, Jennex and Zyngier (2007) and Trkman
and Desouza (2012) rightly warn that such IS implementations need to be examined critically with respect to the costs and
risks they represent for firms. I believe there are five areas to consider. First, from a traditional perspective, the need to manage
authorization favors centralized and monolithic approaches to knowledge management, so that decisions are kept in the hands
of a few managers. Yet the capabilities to decide on authorization are fraught with uncertainty in complex organizations.
Second, knowledge management may easily miss its target. It may focus on the wrong data, information, people, or orga-
nizational units; risk not capturing critical information; lose critical knowledge (e.g. through employee turnover); misuse or
misrepresent information, etc. In a study of knowledge process outsourcing in the financial services industry, Currie et al.
(2008) demonstrated how critical risk assessment turns out to be for a firm’s strategy. Banks wanted to outsource processes
like investment research, IT, or standardized elements of client services in order to reduce costs; however, outsourcing also
created the risk of losing confidential client data or intellectual property. The study concluded that banks are prudent in
assessing IS risks and opportunities when selecting their vendors.
Third, while knowledge protection may seem simple or technically feasible on paper, it may offset competitive advanta-
ges the firm seeks to build through knowledge management (Bogers, 2011). Keeping data, information, and knowledge under
tight wraps through tough IS implemented protection could ‘‘unknowingly’’ stifle sharing with other parts of the organiza-
tion, with detrimental consequences for firm performance. For example, at the front end of innovation, knowledge creation
requires the unfettered and systematic sharing of tacit knowledge between people from different functions, departments,
 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164 157

groups, and units within the organization (Nonaka and von Krogh, 2009). Technology-related obstacles to this process may
throttle future innovation by the firm and affect its medium- to long-term performance.
Fourth, while the firm focuses on protecting data, information, or knowledge through costly measures, competitors
could leapfrog the firm’s knowledge, reducing its medium- to long-term value (Trkman and Desouza, 2012). Thus, Blood-
good and Salisbury (2001) argue that rather than striving for the best secure technical solution, protection should focus on
keeping knowledge embodied and socially embedded, and support people and groups with networking functions. Firms
should resist the attempt to ‘‘over-codify,’’ which was the credo of knowledge management writing in the 1990s (for a good
analysis, see Marabelli and Newell, 2012). However, the network function of knowledge management also entails risks—an
outsider may locate expertise and how it is connected to other parts of the organization. Therefore access and authority
may have to be managed (Trkman and Desouza, 2012), and the risks are similar to those associated with managerial
capability.
Fifth, excessive knowledge protection could create a strategic misalignment. During the last decade the ‘‘protective take’’
on knowledge in the knowledge-based view of the firm has been supplemented with a call for more openness, in particular
about content relevant to innovation (see Chesbrough, 2003; Laursen and Salter, 2006; Love et al., 2011). On the one hand,
opening up the firm to outside knowledge is motivated by the prospect of reducing the cost of firm activities such as product
development, reducing the time to market by using available technology from the outside, and enhancing the commercial
success of new products by incorporating supplier- and customer-generated information. However, Cohen and Levinthal
(1990) highlight that a firm’s ability to absorb knowledge from the outside critically depends on prior investment in related
internal knowledge. As a recent study by Foss et al. (2011) shows, to absorb knowledge from the outside successfully and
facilitate open innovation, firms also need to distribute and share that knowledge effectively among members of the orga-
nization. At the level of IS implementation, investments in creating and absorbing knowledge from the outside are often
accompanied by investment in knowledge management that enables the relevant internal processes (e.g., Alavi and Leidner,
2001; Argote et al., 2003; Montazemi et al., 2012). The areas of cost and risk discussed earlier may hamper the absorption
and diffusion of knowledge.
On the other hand, when firms pursue a strategy of open innovation and absorb knowledge from the outside (Laursen and
Salter, 2006), this strategy is typically accompanied by efforts to reveal private firm knowledge selectively for the purpose of
innovating collectively with other economic actors (von Hippel and von Krogh, 2003). The key here is ‘‘selective revealing’’
through knowledge management. However, whether or not the firm can achieve a protective measure partly hinges on the
risks and costs of inadequate managerial capabilities, faulty knowledge targets, hampering of processes, and leapfrogging by
competitors.
One can only speculate about the severity of the consequences of strategic misalignment. A firm that strategically com-
mits to sharing ideas and knowledge with the outside, while restricting internal sharing under the guise of protection, makes
highly conflicting demands on its employees. Likewise, a firm that fails to selectively reveal knowledge faces difficulties in
being regarded as a ‘‘trusted’’ innovation partner. A way to facilitate better interaction between the firm and outside eco-
nomic actors, particularly in open innovation, has been the adoption of social software (Faraj et al., 2011; Hüsig and Kohn,
2011). Next, I examine these changes in knowledge management and explore what they may hold in store for firms’ bound-
aries and competitive advantage.

3. How social software changes knowledge management

Knowledge management at the level of the firm is currently undergoing a widespread positive transformation through
the surge in social software; it has evolved from the traditional IS implementations (monolithic, centralized, controlled) dis-
cussed in the last section, to implementations based on social media and collaborative sharing (Mujadi et al., 2006). Cur-
rently theory and research are emerging on how Web 2.0, social media, online communities, etc., alter knowledge
processes such as creation, sharing, and capture (for a review of existing work, see Faraj et al., 2011; Haefliger et al.,
2011); there are already good reasons to believe that these changes may prove substantial (Levy, 2009). In a recent paper
Bebensee et al. (2011) suggest social media are fundamentally disrupting the way employees deal with knowledge, and ar-
gue that Web 2.0 has three layers of relevance to knowledge management. First, such technology is founded on socially ori-
ented principles, including peer production and unbounded collaboration. Second, it consists of a series of applications such
as blogs, wikis, social bookmarking, data mashups, editing platforms, or media sharing, which are intuitive to understand
and easy to use. Third, it is based on infrastructures such as open platforms and enabling services that reap considerable
economies of scale. Many of the social media platforms allow large benefits to users (e.g. YouTube) because of network exter-
nalities. They attract many users who hold distributed and diverse interests, but easy search facilitates the opportunity to
‘‘hook up’’ and find the most relevant expertise.
Given how users, content, and technology interact, Levy (2009) and Razmerita et al. (2009) argue that social media are
close to some ideal principles of knowledge management, including the unfettered sharing of knowledge, information,
and data. For example, Wikis in organizations enable many people to collaborate easily in the creation of specific content.
An important part is the joint editing of information—an integral function that not only allows new and possibly better con-
tent to emerge, but also captures which and whose contributions make a difference at various layers of observation. Thus
Wikis not only play a role in what is traditionally understood as ‘‘codifying knowledge’’ (Davenport and Prusak, 1998); they
158 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164

also enable the gradual improvement of content quality through rating, repeated contributions, and editing, capturing
networks of ‘‘creators’’ in the process (c.f. Bloodgood and Salisbury, 2001). In Wikis powerful repositories of encyclopedic-
style knowledge may emerge through the integration of user-generated content. The infrastructure is flexible enough to al-
low various types of data, information, and explicit knowledge to evolve through numerous iterations, diminishing the need
for a structured, predefined ontology- and terminology-based knowledge repository (e.g., Blackler, 1993).
Social software-based knowledge management is flexible to local circumstances, targeted to user needs, often designed
by users themselves, and configured in such a way as to fulfill a particular purpose in social practice. In this manner, social
software may perhaps enable people to make better and more timely local decisions, and solve tasks more effectively. Indi-
vidual flexibility is a hallmark that leads Razmerita et al. (2009) and Paroutis and Al Saleh (2009) to talk about ‘‘personal
knowledge management,’’ which helps employees fulfill their tasks and meet their objectives through informal interactions
with others in social practices, outside and inside the firm.
Firms may benefit from social software applications since they allow many types of content to evolve through a wide
variety of collaborative processes. In a case study of knowledge management in a multinational firm, Paroutis and Al Saleh
(2009) show that Web 2.0 technologies, including blogging and other social media applications, helped people to share what
they considered ‘‘knowledge’’ effectively and efficiently. The employees took up these tools enthusiastically. The authors
found that publishing content helped them communicate their locally generated reflections and heuristics on the job more
effectively. It also improved their management of personal information, and made it easier for them to find answers to
important questions and stay informed about the latest news, etc. When establishing knowledge management by social soft-
ware, Paroutis and Al Saleh (2009) emphasize the role that the firm’s history of using similar tools plays in the eventual suc-
cess of the initiative. They underscore the importance of explicit support by management, clear expectations about the
outcome of using the systems, and trust in organizational members. In general, the authors emphasize the need for manage-
ment to see Web 2.0 as an integral part of a firm’s knowledge strategy.
Much research on the technology acceptance model has demonstrated that there are often strong individual barriers to
adopting new IS, such as knowledge management (Venkatesh and Davis, 2000). However, one advantage of knowledge man-
agement by social software is its public diffusion and familiarity. Firms’ internal application of knowledge management by
social software may not differ much from its widespread and public uses, so employees may not need to learn new specifics
about its design, applicability, functioning, and limitations. These characteristics may make social software implementations
less costly to adopt for an individual employee than traditional knowledge management. However, in order to drive rapid
adoption, Levy (2009) suggests that firms should engage ‘‘younger’’ employees who may be more familiar with the
technology.
While there are many advantages to knowledge management by social software, there are also inherent risks and costs,
some of which are discussed in Haefliger et al. (2011). Here, the focus is on the issue of knowledge protection because it
touches upon a strategic research agenda that includes the nature of firm boundaries and competitive advantage. Two prob-
lems are of interest to the field of strategic information systems: first, how to protect local knowledge from spilling over with
social software; second, how to ensure the value of the firm’s internal knowledge when social software enables content from
outside the firm to be used in an increasingly costless and flexible manner.
First, the widespread adoption of social software-based applications in the organization may undermine traditional firm
boundaries, because the efforts to keep them erect are simply too costly or impractical. For example, social software enables
local and decentralized creation of knowledge through the combination of existing data, information, and knowledge, and
further enables costless dissemination of content. Preventing such processes is mostly contraindicated and at the very least
difficult. Recall that efforts to build employment capabilities involve rules and compartmentalization. Defining effective
rules for employees in order to prevent dissemination of new content would require managers to have an overview of local
distributed knowledge (and creative processes) that is impossible in complex organizations (Tsoukas, 1996). The uncertainty
of managerial capabilities applies here, as it does for knowledge protection in traditional knowledge management. What’s
more, rules would have to be enforced and monitored at the individual level, which may be quite impractical and
counterproductive.
It appears that while boundary protection through compartmentalization of tasks and functions is consistent with tradi-
tional knowledge management, it goes against the underlying philosophy of social software, which seeks to enable people to
connect freely in order to formulate and solve problems more efficiently (Jeppesen and Frederiksen, 2006). In order to be of
mutual assistance through social software, organizational members need to share information about their interests, prob-
lems, and tasks, revealing at least some of their information or knowledge to each other. The strict partition of knowledge
and information followed by central and tightly managed integration may be costly to design in advance of processes of
knowledge creation, sharing, and capturing in organizations. It is possible, of course, to incent employees to be prudent about
knowledge-sharing now and in the future, and also to monitor possible spillover—but it seems that traditional knowledge
management was designed precisely for these tasks. To summarize, the philosophy and use of knowledge management
by social software seem to conflict with the traditional notion of implementing protective capability in strategic
management.
The second problem deals with the value of firm knowledge that rests on the quality, distinctiveness, and ownership of
data, information, and knowledge brought to bear on the many decisions and activities in the organization. Social software
extensively facilitates sharing of content between individuals, within and across firm boundaries. Emerging networks are
 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164 159

used to tap into remote expertise in order to solve local problems (e.g. telemedicine). From a strategic perspective, it seems
this may pose hidden risks and costs to the firm looking to protect the value of its knowledge.
As discussed above, the easy, low-cost use of external content may be widespread for people who need it to solve their
tasks and problems quickly and efficiently. In particular, one can expect the use of content from outside the firm to be rein-
forced if and when the use of internal data and information is hampered by several layers of knowledge management secu-
rity. Yet, critics of social media have often voiced their concern about the quality of content produced; for example, the
accuracy of entries in Wikipedia (Chai et al., 2009). There is no reason to believe that firm-internal implementations are ex-
empt from such criticism.
In cases where external sources are used extensively and repeatedly, the distinctiveness or rareness of the firm’s knowl-
edge may possibly diminish over time (see Barney, 1991). This may make it difficult to maintain the firm’s competitive advan-
tage, not because knowledge spills over, but because it is ‘‘watered down.’’ As case studies of innovation contests in the
chemical industry have shown, firms increasingly use social software to share knowledge about technical problems in product
development or production with outside potential experts. The management expectation is that in a large population of exter-
nal experts, there will be at least one who will find a solution to the problem. That individual will submit the problem in return
for a monetary reward paid by the firm. Importing solutions from the outside may require significant adjustment of internal
processes and routines, perhaps making the firm more similar to its competitors. More importantly, by sharing problem-
related knowledge with the outside, the firm risks revealing critical information about the nature and gaps in its knowledge,
for example what the firm is currently working on in research and development, or obstacles it faces in the pilot-production of
a specific chemical compound (see Sieg et al., 2010). Although the firm may prefer to stay anonymous, competitors may
acquire this information to leapfrog technological development, or attempt to substitute product and process innovation.
The use of external content not owned by the firm may create risks and costs associated with the uncompensated use of
intellectual property in task/problem formulation and solutions, decision-making, service delivery, product innovation, etc.
In an extreme form, widespread and personal knowledge management implies delegation of decision rights on inclusion of
content throughout the organization. Thus, the widespread adoption of knowledge management by social software could
enhance the risk of unintended local inclusion of content protected by intellectual property rights, without compensating
the owner of the content (e.g. software code, graphics, documentation, or images packaged with a software product). More-
over, even when there is no clear-cut breach of intellectual property rights, a consulting firm that presents a strategic pro-
posal to a customer—based on a simple but clever compilation of industry studies conducted by research institutions and
collected through the Internet—may find it hard to justify the value and price of its service to a client. This is irrespective
of the larger profits the firm receives through personal knowledge management and the lower labor costs expended than
would be the case when conducting an original industry study and devising new strategy concepts.
While knowledge management by social software may represent large efficiency gains, it also seems to pose some chal-
lenging questions for firms’ protective capabilities and the value of firm knowledge, and hence for firm boundaries and com-
petitive advantage. In the next section, I will try to capture some of these questions in a strategic research agenda for IS
scholars.

4. Toward a strategic research agenda

Extending the discussion above, this section outlines some fundamental research problems that scholars interested in
strategic information systems may consider as we pursue work on knowledge and social software. The research agenda is
based on a realization that knowledge management by social software offers firms both huge opportunities and challenges
with regard to protection and competitive advantage. The agenda proceeds with a logic reverse to the one presented at the
outset of this paper, where the strategic importance of knowledge called for instruments of protection at the operational le-
vel of knowledge management. The trends in knowledge management witnessed today are rather forcing a ‘‘bottom-up’’
change in the way the field of strategic information system in the future may conceive of firm knowledge, knowledge-based
competitive advantage, and firm boundaries. Thus, I choose to start with operational problems of knowledge management
and end with problems related to the boundary of the firm, which is a fundamentally strategic topic. There are five research
problems that need our urgent attention.

4.1. What are the choices and implications of social software for knowledge processes in organizations, and how do these differ from
those of traditional knowledge management?

The current research on social software and knowledge management includes conceptual work, case studies, and rigorous
empirical research (e.g., Baehr and Alex-Brown, 2010; Razmerita et al., 2009; Yates and Paquette, 2011; Majchrzak et al.,
forthcoming) This emerging body of work represents a very valuable starting point for understanding types and levels of so-
cial media for knowledge management, organizational factors that play a role in the use of social media, and the opportu-
nities and challenges associated with the use of systems. We need more theoretical and empirical research on how ‘‘personal
knowledge management’’ impacts on processes such as knowledge creation, sharing, and capture in organizations (see Faraj
et al., 2011). Social software comes in many forms, ranging from blogs and Wikis, through collaborative workspaces, to video
exchange. Theory and research need to shed more light on the different impacts these implementations have on knowledge
160 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164

processes. For example, if we take knowledge sharing in social practices toward the tacit end of the continuum, what is the
distinct role of video and photo exchange platforms in producing cues to possible choices and actions (Yates and Paquette,
2011)? Following up on existing work, what is the role and position of Wikis in the creation of knowledge in organizations;
and what actors shape them (see Yates et al., 2010)? What conflicts are apparent in the use of Wikis? And what are the con-
sequences for organizational knowledge creation?
More than 20 years of extensive research on knowledge management (Clark et al., 2007) have uncovered system charac-
teristics, their roles, and functions in relation to knowledge processes (Alavi and Leidner, 2001; Galliers and Leidner, 2009).
Yet, with the introduction of knowledge management by social software, we are confronting new fundamental questions
about the performance of IS implementations. For example, regarding the network function of knowledge management
(Bloodgood and Salisbury, 2001), do the new IS implementations outperform, in terms of cost and speed, more traditional
ones such as searchable repositories for accessing experts? Since knowledge management by social software is (mostly) mo-
bile, organizational members who need content, such as tips on dealing with a technical problem, may use the Facebook app
on their smartphone to search their internal and external personal network for someone who can help them, rather than log
into their secure and wired laptop to search the firm’s expert directory using a set of predefined keywords. Yet, when the
same employees seeks formal instructions to conduct a compliant process in the organization, they may be more than will-
ing to search in the firm’s knowledge base. Such choices between knowledge management implementations and their impli-
cations are in general poorly understood.

4.2. What are the barriers and enablers to the adoption of knowledge management by social software in firms?

Research on barriers and enablers is extensive and builds on a long tradition of theory and research (Galliers and Leidner,
2009). While many authors praise the rapid diffusion of social software within and beyond firm boundaries (e.g., Culnan
et al., 2010), limited attention is currently devoted to enablers and barriers, such as the motivation to accept or intention
to use the technology for particular purposes. Thus, while we can observe extensive spread and use of social media, there
is still some uncertainty about the role that capabilities or demographics play in the adoption of such knowledge manage-
ment implementations in firms. For example, Levy (2009) put forward the argument that firms should use younger employ-
ees to promote the adoption of social media for knowledge management. Is this because older employees are unwilling to
use the systems? If so, why should that be the case, and what are the effects on knowledge sharing in the firm overall? A
signpost for knowledge management in the past has been widespread and uniform adoption in the firm (e.g., Davenport
and Prusak, 1998). In the light of these new trends, a more differentiated view is called for. The traditional view does not
account for the fact that people of different generations grow up with different technologies and content and react differ-
ently to them (Phang et al., 2006). It also does not account for the fact that the evolution of knowledge management in firms
may depend on how various groups of employees put social software and traditional IS implementations to use, for example,
shaped by the demographics of their members. A detailed investigation of enablers and barriers to adoption will provide
important insights into the potential that various technologies hold for knowledge management in organizations, and pre-
pare the grounds for the next question.

4.3. How does the firm ensure the value of knowledge when implementing knowledge management by social software?

As discussed above, an important dimension of the value of firm knowledge pertains to the quality of data, information,
and knowledge brought to bear on organizational tasks and decisions. An important feature of social media is the easy and
fast access to widespread expertise (cf. LinkedIn), within and beyond firm boundaries. Employees can use social software to
rapidly identify and access content or people that will be useful for solving their tasks. Given the frequent lack of formal
quality control—none of the ‘‘knowledge managers,’’ or ‘‘knowledge editors,’’ found in traditional knowledge management
IS implementation—how can firms ensure the quality of their internal knowledge? For example, quality has been a concern
to scholars studying medical informatics where content may have life-threatening consequences or radically improve the
lives of patients. Greene et al. (2011) found several Facebook sites for patients with diabetes. The authors gathered data
on posts from 15 of the largest groups discussing the illness and qualitatively coded the content. An important finding
was that unfounded clinical advice was sometimes offered on these forums, often in conjunction with product promotion.
In addition, personal data were often volunteered without any security or guarantee of authenticity. While such studies pro-
vide important insights to firms in the healthcare industry, the general implications are also vast for knowledge management
in firms (cf. the service firm example at the start of this paper). What data, information, and knowledge are obtained through
or by social software for what purpose, and how do firms assess and secure their quality? The ultimate value of firm knowl-
edge is perhaps contingent on the answers to these questions.
A promising avenue for investigating the quality of firm data, information, and knowledge associated with knowledge
management by social software, is the roles and functions of social practices (e.g. as they are found in communities of
employees) in the process (see also Orlikowski, 2007). In the absence of central knowledge repositories monitored by
‘‘knowledge managers,’’ who seek to improve quality through careful editing, social practices may play a prominent role.
According to recent work (von Krogh et al., 2012b), social practices do not only evolve and refine employees’ tacit and ex-
plicit knowledge. Under certain conditions, such as a history of interaction, their members also pursue higher collective stan-
dards of excellence related to their work. Learning to use collective standards for judging the quality of knowledge is an
 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164 161

element of member socialization into a social practice. For example, an important part of becoming a practitioner of software
development is learning about ‘‘beautiful code’’ that solves problems with minimum lines of instruction, is well documented,
compatible with existing code, bug free, etc. Embedded in social practices, employees often judge the quality and value of
knowledge by the extent to which it is authentic and practically useful, ‘‘true’’ in the sense that it enables someone to act
(not only whether beliefs can be justified as ‘‘true’’). In this way, explicit knowledge as clinical advice is ‘‘true,’’ insofar as
it helps you live a healthier, better, and longer life.
If social practices are ‘‘custodians’’ of work-related standards of excellence in organizations, this implies that they also
serve an important function in deciding what constitutes useful knowledge from outside the firm. The ability of organiza-
tional members locally and relentlessly to judge the quality of external content obtained through and by social software
in relation to their values, problems, tasks, work, projects goals, etc., may be critical for preserving the quality of firm knowl-
edge. Returning to the story at the start of the paper, perhaps the CEO had less reason to be concerned than he originally
thought. Well trained consultants might be capable of filtering out any low-quality, redundant, outdated content that
reaches them through social media; and it may be that knowledge embedded in such social practices is the real ‘‘valuable
firm knowledge.’’ The interplay between social practices and social software is an exciting research area that needs signif-
icantly more focus in future work.

4.4. How do firms balance implementations of knowledge management?

Most large firms where knowledge accounts for a major share of firm value, and/or where firm knowledge is the most
important source of competitive advantage, have a record of investment in technology and heuristics for managing data
and information. Some of these investments have targeted traditional implementations like databases, knowledge reposito-
ries, expert systems, corporate portals, intranets, etc. Scholars need to address the emerging relationship between these leg-
acy systems, and the rapidly adopted knowledge management by social software. Are there substitution effects or
complementarities between the IS implementations? There are, of course, ample opportunities for firms to make content
stored in knowledge repositories available to organizational members through social media. Likewise, social media can be
used as a feeding mechanism for central databases, and selected contents may be edited and refined for future use in the
organization. Moreover, individual organizational members may be responsible for maintaining their own Facebook pages
(not that different from the former expert pages maintained by individuals on the intranet) and writing their own blogs. This
content in turn can be systematized and made more easily searchable in conjunction with corporate databases.
However, the most critical questions for research and theory are for what particular purpose firms invest in social soft-
ware and traditional knowledge management, and how they balance their use to enable knowledge processes? Do firms en-
sure that strategically important data, information, and knowledge (e.g. a repository of formulations, drug targets, and drug
leads in a pharmaceutical firm) are the focus of traditional rather than social software-based implementations? Are there
cross-industry differences in knowledge management IS implementations? Are firms in some industries (e.g. media and
entertainment) prone to use more social software because of the speed with which data, information, and knowledge be-
come outdated? Are firms in some industries more likely to use knowledge management by social software because of their
employees’ demographics or level of training? These are very exciting questions that should reinvigorate research on knowl-
edge management for years to come.

4.5. What are the consequences of knowledge management by social software for competitive advantage?

As is clear from the preceding agenda points, knowledge management by social software raises questions about the value
of organizational knowledge, as well as a possible shift of balance in the approaches to enabling knowledge processes in
organizations. This indicates that the new trend in knowledge management may indeed have a profound impact on the
sources of firms’ competitive advantage. As often argued by information systems scholars, the results regarding the impact
of investment in information technology on competitive advantage and firm performance are generally inconclusive; per-
haps we should not expect investment in social software and its adoption to be empirical exceptions. However, recent re-
search suggests that while the direct effect may not prevail, investing in IS that are built and aligned with firm
capabilities may positively impact a firm’s ‘‘agility’’ and ultimately its performance. Like other IS investments, social software
implementations may make firms more flexible and responsive, both in terms of effecting operational changes and grasping
market opportunities, if they match firm-level capabilities and orientations (Lu and Ramamurthy, 2011). For example, by
using social media to nurture online communities of customers, firms can generate brand loyalty and receive extensive cus-
tomer feedback on their products, both of which represent important information-based assets and input to knowledge cre-
ation and innovation (Culnan et al., 2010).
On the negative side, social software implementations may possibly involve more extensive knowledge spillover beyond
firm boundaries to current and future competitors, as indicated in the last section. While social software has the advantage of
making knowledge management local and personal, it also harbors a fundamental issue—how to protect knowledge for com-
petitive advantage. Hustad and Teigland (2008) speak of knowledge leakage to the outside, associated with social software.
Moreover, as Squicciarini et al. (2010) show, social networking sites often present significant issues concerning protection of
personalized content. The authors develop and implement a model on Facebook, indicating how many users can collectively
enforce privacy rights. In contrast to traditional knowledge management, where access to knowledge repositories and
162 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164

information is centrally governed, access to content and content distribution is mostly decentralized. Knowledge, which is
created accumulatively by employees using social media to solve local tasks, is typically governed by the employees them-
selves, including the choice of whom they want to distribute the self-generated content to. When knowledge is of potential
strategic value to the firm—for example, a consultant’s discovery of a strategic issue for firms in a particular industry—man-
agement may perhaps feel that social software-based implementations fail to provide the level of control of knowledge and
knowledge distribution needed. This raises further questions, such as what routines do individuals follow to protect person-
alized and firm-related content in their engagement with social software? What values and norms (e.g. prudence) guide
employees’ engagement with content created and shared on social media? To which extent are such values and norms
shared in organizations? How do patterns of individual engagement with social software shape the ability of the firm to pro-
tect knowledge, build, and sustain competitive advantage at the organization level?
Please recall that protective capabilities are operationalized through knowledge management IS implementations.
Knowledge protection is therefore not only a matter of contracts, formal rules, organization structure, pay and/or career
incentives, but also of technology, organizational culture, demographics, and managerial capabilities. There is a need for
more theory within the knowledge-based view of the firm that includes these and other constructs when considering the
sources of firms’ competitive advantage. A firm’s choice of knowledge management technology, in particular, may have
repercussions for competitive advantage.
Finally, many authors have suggested that tacit knowledge is a source of competitive advantage (Barney, 1991; Grant,
1996; Huang et al., 2011; Nelson and Winter, 1982; Singh and Agrawal, 2011). Generally, it is difficult for competing firms
to imitate and substitute valuable tacit knowledge that can provide the firm with sources of sustained competitive advan-
tage. On this point, there is potential for more theory and research that involves knowledge management IS implementa-
tions. For example, while organizational members are to a large extent responsible for emerging knowledge brought to
bear on work, and will be evaluated on it, do they have an interest in keeping high-quality tacit knowledge within the firm?
Do they resist attempts to move some knowledge toward the explicit side of the continuum, using social media? How do
people use social media to give clues about their tacit knowledge? Is this one way they signal their expertise and citizenship
to the rest of the organization? A common way in which firms lose competitive advantage based on tacit knowledge is
through turnover of expert employees. Today, people make extensive use of social software (like LinkedIn or Xing) to look
for new and attractive jobs elsewhere. Recruiters and search companies also use social software to build a talent pipeline into
the firm. One important area to investigate in the future is how social software impacts on employee turnover and to what
extent this is associated with the loss or gain of knowledge-based advantages.

4.6. How do firms dynamically recreate boundaries?

The final question on the strategic research agenda follows on from the discussion above, and rests on the notion that
firms are dynamic knowledge-creating entities. Knowledge creation is a continuous process (Nonaka and von Krogh,
2009) that feeds on existing knowledge within the organization (Kogut and Zander, 1992; Nonaka, 1994; Walsh and Ungson,
1991), and input from outside sources (Cohen and Levinthal, 1990), mediated by individuals and units in the organization
(Petruzzelli et al., 2010). Since knowledge of the firm is never truly stable but in constant flux, the firm must continuously
define its boundaries by ensuring the distinctiveness of its knowledge. For example, this point was underscored by Santos
and Eisenhardt (2009; see also Santos and Eisenhardt, 2005) when showing that entrepreneurs co-create organizational
boundaries by claiming, demarcating, and controlling a market (see also Jarvenpaa and Lang, 2011; Faraj et al., 2011). More-
over, when the pace of technological change quickens, boundaries become dynamic and are often drawn once more to inte-
grate the firm vertically into the new technology (Ahuja and Katila, 2001). In other words, it may not make sense to take a
stock of firm knowledge at any one point, draw a fixed boundary around it, and expect it to remain in that configuration for
some length of time. More theory and research is needed on how existing firm knowledge constitutes boundaries (Liebes-
kind, 1996), and how knowledge creation enables the firm to recreate its boundaries dynamically over time. For example, in
line with the knowledge-based view of the firm (Birkinshaw et al., 2010; Grant, 1996; Kogut and Zander, 1992; Spender,
1996; Zander and Zander, 2010), knowledge that is of relevance to firm boundaries should be valuable: it has an effect on
the firm’s competitive advantage and performance. Questions of value—including quality, distinctiveness, and owner-
ship—are central to firm boundaries. We need to understand how people decide what knowledge satisfies these criteria
and what does not, especially when knowledge is partly derived from the outside (see Santos and Eisenhardt, 2005); for
example, when the firm pursues a strategy of open innovation (Faraj et al., 2011; von Hippel and von Krogh, 2003).
As this discussion shows, the emergence of knowledge management by social software is an important starting point for a
more detailed investigation of the value of firm knowledge and boundaries. Are firm boundaries recognizable in the way
organizational members support knowledge processes through social software? One interesting indication could be how
people tune their communication with outsiders to concerns of quality, distinctiveness, and ownership of data, information,
and knowledge. How do people project the consequences of sharing content with outsiders? Are people more sensitive to
issues of ownership as content sharing with outsiders increases (e.g. between research and development staff and outside
engineers in open innovation)? When the boundaries of the firm change (for example, through the acquisition of an entre-
preneurial firm with new technology), how does this impact on the way experts communicate with members of the new
organization?
 G. von Krogh / Journal of Strategic Information Systems 21 (2012) 154–164 163

5. Conclusion

Knowledge is part of constituting firm boundaries and a source of competitive advantage for the firm. The knowledge-
based view of the firm in strategic management proposes that firms build protective capabilities to ensure their strategically
relevant knowledge stays within their boundaries. Knowledge management is a collection of information systems imple-
mentations, widely diffused in the organization, which seek to support the firm’s knowledge creation, sharing, and capture
processes. Knowledge management, therefore, is a manner in which firms operationally build their protective capabilities.
However, such knowledge protection comes with a number of risks and costs, which to some extent can be offset by social
software. Knowledge management by social software is currently changing the way employees and firms create and distrib-
ute data, information, and knowledge, raising two important questions for firms from a strategic perspective. First, how to
protect local knowledge from spilling over to competitors and other economic actors with knowledge management by social
software? Second, how to ensure the value of the firm’s internal knowledge when social software enables content from out-
side the firm to be used in an increasingly costless and flexible manner?
These fundamental questions form the basis for a five-point strategic research agenda that deals with the transition to
knowledge management by social software and the implications of this for firms and employees, the impact on competitive
advantage, and challenges for firm boundaries. Answering the questions in this new research agenda may lead to important
insights into the challenges of the transition to social software, and ultimately lead to a better understanding of how it may
alter the nature of the firm.

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