Isolating Mechanisms: Can Managers Protect Rent Generating, Knowledge Based Assets?

The resource-based view is a theory of firm performance. Its principal argument is that a firm=s distinctive competencies are the bases for sustainable competitive advantage. These distinctive competencies are explicitly knowledge based resources. How do managers protect these rent generating assets--the skill sets and organizational routines of high value workers--from dissipation? Theory suggests that the possessors of rent generating assets should erect barriers to imitation. In the context of knowledge based resources, these barriers would retain individuals and work groups who contribute to the firm=s success. These barriers are generically called isolating mechanisms This paper reports an ethnographic study which takes up that question in a multiple case study format. Generally, no isolating mechanisms were detected which were attributed to managerial intervention. The paper closes with discussion and implications.