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Abstract

To maintain competitive advantage, a firm's investment decisions related to knowledge creation are likely to be strategic in nature. However, strategic investments usually have an element of risk linked to uncertain and deferred investment benefits. To date, such investment decisions relating to knowledge workers have not been extensively researched. In this paper, we explore the following research question: How do we strategically assess knowledge creation over time giving consideration to complex decision criteria in order to improve organizational value? We develop a model based on economic and organization theory for assessing organizational value with regard to knowledge creation investments. Our model prototype provides managers with a learning tool relating to the timing and selection of knowledge creation investments. Our own use of the tool in simulation experiments yielded several insights which suggest that the decisions typically made by managers may dilute knowledge creation investments. Our results demonstrate that the organizational benefit of knowledge creation processes should be well aligned with near-term tasks. Under instances of high knowledge depreciation, however, it is unlikely that individual workers can optimize knowledge creation process decisions without organizational involvement in matching skills to task complexities. The organizational benefits of consistent and frequent knowledge creation process participation increase over time as the match of skills and task complexities improve.

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