The Root Cause of the Hierarchical Structure of Enterprise Capabilities

Abstract

Based on the correlation between an enterprise’ unique resources and capabilities in its
functional influence, resource school specialized in strategic management artificially
constructs a hierarchical structure that reflects enterprise capabilities. In fact, an
enterprise’s unique resources is substantially tacit knowledge, whereas the essence of
an enterprise’ multiple capabilities is a different type of knowledge in the form of tacit
knowledge, explicit knowledge or self-transcending knowledge, all of which form an
interdependent hierarchical structure during knowledge conversion process.