The resource-based view of the firm emphasizes the role of firm-specific resources, especially firmspecific knowledge resources, in helping a firm to achieve sustainable competitive advantage. However, the deployment of firm-specific knowledge often requires key employees to make specialized human capital investments that are not easily redeployable to other settings. Thus, in the absence of effective safeguards and trust building devices, employees with foresight may be reluctant to make such specialized investments. This study explores both economic- and relationship-based governance mechanisms that might mitigate this underinvestment problem. Effective use of these governance mechanisms enables a firm to obtain greater performance from its efforts to deploy firm-specific knowledge resources. Empirical results further support these key arguments.
- Employee governance mechanisms
- Employee human capital
- Firm-specific knowledge resources
- Resource-based view of the firm
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management