Abstract

Knowledge creation has emerged as a very important organizational practice and has been extensively treated in a large body of academic work. Surprisingly, however, organizational economics (i.e. transaction cost economics, agency theory, team theory, and property rights theory) has played only a minor role in the development of the knowledge management literature. We argue that organizational economics insights can further the theory and practice of knowledge creation in several ways. Specifically, we apply notions of contracting, team production, complementarities, hold-up, and so on to knowledge management issues (i.e. creating and integration knowledge, rewarding knowledge workers, etc.), and derive from our discussion refutable propositions, to guide empirical research, that are novel to the knowledge management field.