& Research Article Firm-Specific Knowledge and Competitive Advantage: Evidence and KM Practices Rafael Andreu 1 * , Joan Baiget 2 and Agustı ´ Canals 3 1 Information Systems and General Management Departments, IESE Business School, Barcelona, Spain 2 Capgemini Consulting, Barcelona, Spain 3 Universitat Oberta de Catalunya, Barcelona, Spain Firm-specific, idiosyncratic knowledge is increasingly being recognized as a possible source of competitive advantage in today’s business world, where more traditional sources seem to become less effective, to the extent of suggesting new approaches to strategy theory and even to the theory of the firm. This is routinely confirmed by the preliminary results from an on-going study of knowledge management (KM) approaches and practices used in Spanish firms. In this study, several senior management respondents unambiguously consider firm-specific knowl- edge very important for their firms’ competitiveness, although they recognize, not surprisingly, that general purpose knowledge is also needed and in a higher proportion. However, when the specific KM practices used are analysed, it turns out that the majority of them do not seem to be particularly well geared to firm-specific knowledge development and usage, and neither for the effectiveness of the associated learning activities and processes. This suggests what could be a fundamental mismatch between the type of knowledge involved and appropriate KM practices. In this paper we present preliminary evidence stemming from the aforementioned study, make an attempt to characterize the kind of mismatches detected, and suggest ideas for further research on the practical and theoretical implications of the results obtained. Copyright # 2008 John Wiley & Sons, Ltd. INTRODUCTION In this paper we approach KM from the perspective of how knowledge and learning contribute to develop sustainable competitive advantages (SCA) in firms. We start by pointing out how knowledge may constitute the basis of SCA, introducing the notions of firm-specific and general purpose knowledge, and arguing that SCA appears as a consequence of achieving a right ‘‘mix’’ of these two types of knowledge in a way consistent with the firm’s strategy and competitive positioning. Thus, we argue that the sustainability of such knowledge-based advantages depends on the type of knowledge involved, and consequently of the learning processes necessary to develop and main- tain it. This in turn points out that KM practices designed to foster knowledge-based SCAs should be associated with appropriate learning processes. However, a preliminary analysis of empirical data derived from a study of KM practices in Spanish firms of different sizes in a variety of industries, directed to CEOs and other senior officials, does not seem to indicate that appropriate Knowledge and Process Management Volume 15 Number 2 pp 97–106 (2008) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/kpm.302 *Correspondence to: Rafael Andreu, Information Systems and Strategic Management Departments, IESE Business School, Av. Pearson 21, 08034, Barcelona, Spain. E-mail: andreu@iese.edu Copyright # 2008 John Wiley & Sons, Ltd.