Structurization and formalization of knowledge management in virtual organizations: the case of a medium-sized consulting company

Regarding strategic management at the threshold of the next millennium from both perspectives, theory and practice, two central challenges for companies appear against the background of growing competition: the management of the firm´s knowledge basis in order to gain resource-based competitive advantages, and the development of network-oriented, (virtual) cooperative arrangements in order to maintain flexibility and innovativeness. We combine both challenges and investigate aspects of knowledge management in virtual organizations which marks an evident research gap at the moment. Following the resource-based approach, a company´s competitive position is determined by its bundle of resources which can be accumulated internally or acquired externally. We propose that a considerate policy of virtual organizing shows a third way between internal accumulation and external acquisition of resources. Especially, we investigate the crucial role of the structurization and formalization of knowledge management. The findings of an in-depth case study show a range of special qualities of knowledge management in a virtual consulting organizations. Firstly, the high degree of structurization and formalization is the basis for knowledge management in the investigated virtual organization. However, structurization and formalization are also the prerequisites for the use of ICT. Secondly, the high degree of structurization and formalization of knowledge management also limits the possibilities to reach a comprehensive level of organizational virtualness.