Leveraging knowledge-based resources: The role of contracts

Every firm faces the challenge of leveraging valuable resources in the form of the intellectual assets, know-how and expertise of itself and others around it. They can only achieve this through interaction with other idiosyncratically capable firms. But through interaction, resources, activities and actors themselves evolve in relation to each other. In this situation of complex business interaction and uncertainty, the conditions under which the respective knowledge and expertise can be leveraged often need to be expressed and manifested as joint consent between the involved parties. Designing an agreed platform for using knowledge-based resources of others poses a real challenge for many companies because the knowledge that firms need to access is inherently indeterminate and continually evolving. This study addresses this issue by investigating the role of contracts in leveraging knowledge-based resources. The study builds on an interactive view of resource leveraging in general and on ideas on knowledge-based resources in particular (Håkansson et al., 2009). The paper reports on empirical research conducted between 2003 and 2007 that examined real-world contracts in manufacturer-retailer networks. The study draws conclusions on the role of contracts in leveraging knowledge-based resources and more widely on the dialectic nature of resource transformation.