Leveraging tacit knowledge in alliances: The importance of using relational capabilities to build and leverage relational capital

Effectively managing existing tacit knowledge stocks and transferring knowledge between partners contributes to firm capabilities that allow them to differentiate their goods and services from those of their competitors. Because it also helps them to provide greater value to customers, it contributes to the development of a competitive advantage. In highly competitive industries, firms need to focus on proactively managing their knowledge resources to ensure survival. However, the knowledge management process is at times complex especially because of the difficulty involved in conveying tacit knowledge. Due to its latent potential for enabling firms to achieve potential competitive advantage, how firms utilize and transfer stocks of tacit knowledge requires enhanced understanding. In specific, we explain how firms use relational capabilities to build relational capital with partners. In turn, relational capital facilitates the transfer of tacit knowledge between collaborating partners. We develop several propositions regarding the factors likely to influence the transfer of a firm's tacit knowledge resources in strategic alliances. The importance of social capital's relational dimension, relational capital, in this process is highlighted. (c) 2006 Elsevier B.V. All rights reserved.