Presence of community of practice: Its effect on social capital and competitive advantage of the firm

The current shift to knowledge economy has focused the attention on the importance and significance of tacit and explicit forms of knowledge. The focus of organization has shifted to harnessing and sustaining the tacit knowledge possessed by individuals. Community of practice is one of the knowledge management initiative in which tacit knowledge can be cultivated and sustained. The purpose of this research is to find out whether existence of community of practice in a certain domain helps the organization to achieve competitive advantage. Also, the other aspect that this research aims to explore is whether existence of community of practice enhances interpersonal relationships and individual networks i.e. social capital in an organization. The social capital has been viewed in three dimensions: structural, relational and cognitive dimension. The influence of power distance and individualism (dimension of national culture) and computer-mediated communication on the relationship building among individuals has also been studied. A web survey was conducted and it has been observed that there tends to be no significant correlation between existence of community of practice and competitive advantage. The analysis also reveals that existence of community of practice could significantly improve the social capital and its dimensions in a particular domain. The results indicate that power distance significantly affects the relationship building between individuals and individualism significantly affects the shared understanding of norms and rules of organization. It was also observed that computer-mediated communication is not vital to build connectivity among professionals in a particular domain.