Synergistic effects of operant knowledge resources Joanna Phillips Melancon Gordon Ford College of Business, Western Kentucky University, Bowling Green, Kentucky, USA David A. Griffith Department of Marketing and Supply Chain Management, The Eli Broad College of Business, Michigan State University, East Lansing, Michigan, USA Stephanie M. Noble School of Business Administration, The University of Mississippi, University, Mississippi, USA, and Qimei Chen College of Business Administration, University of Hawaii, Honolulu, Hawaii, USA Abstract Purpose – Building on the service-centered dominant logic, this paper aims to investigate the effects of firm knowledge (knowledge of customers, industry, and practices) and synergistic combinations of different types of employee knowledge as a foundation for competitive advantage in retail and service organizations. Specifically, it seeks to theorize that the firm’s operant knowledge resources combine to develop the service-based value proposition of enhanced ability to meet customer needs that results in greater performance. Design/methodology/approach – A survey methodology was used to test the hypotheses using a sample of 293 retail and service providers. Findings – Employees’ knowledge of its customers and competitors allow the firm to enhance its ability to meet customer needs, whereas knowledge of firm practices, in isolation, does not enhance a firm’s ability to meet customer needs. When looking at the synergistic combination of employees’ knowledge (i.e. the two-way interactions and the three-way interaction of knowledge of customers; knowledge of firm practices; knowledge of industry) several interesting insights emerge to help to understand how to enhance a firm’s ability to meet customer needs. Research limitations/implications – Since researchers have yet to fully explore the effects of knowledge as operant resources and their conversion into capabilities, this study uses a dynamic capabilities approach and demonstrates that providing front-line employees with the knowledge necessary to understand the firm’s consumer base allows the firm to develop the ability to meet customer needs (i.e. a capability), which in turn allows the organization to reap the economic benefits of a satisfied and returning customer base. Practical implications – The two-way and three way interactions provide new insights into the synergistic employment of operant knowledge resources. Originality/value – The results suggest that operant knowledge resources may not be equally created as different combinations of operant resources result in superior capabilities than other combinations. Keywords Service industries, Knowledge management, Competitive advantage, Resource efficiency Paper type Research paper An executive summary for managers and executive readers can be found at the end of this article. In the resource based view (RBV) of the firm, first discussed in the 1990s, a new paradigm changed the way in which businesses assessed their resources and competitive advantage. RBV asserts that a company’s advantage over the competition can be attributed to the company’s strategic resources. These resources may be categorized as operand resources (tangible resources such as products, raw materials, and facilities that are aligned with the traditional conceptualization of “resources” throughout history) (Constantin and Lusch, 1994) or operant resources (intangible assets such as brand name, knowledge, or organizational capabilities) (Collis and Montgomery, 2008). In RBV, competitive advantage occurs when an organization applies its unique resources in a manner that allows the company to compete more efficiently or effectively than the competition (Collis and Montgomery, 2008). A more recent view of resources in the organization is the dynamic capabilities perspective. A dynamic capability is the ability of the firm to continually modify and apply resources in The current issue and full text archive of this journal is available at www.emeraldinsight.com/0887-6045.htm Journal of Services Marketing 24/5 (2010) 400–411 q Emerald Group Publishing Limited [ISSN 0887-6045] [DOI 10.1108/08876041011060693] Received: November 2007 Revised: December 2008 Accepted: February 2009 The authors contributed to the manuscript equally. The order of the authorship is decided randomly. 400