We propose a new model of knowledge creation in purposeful, loosely-coordinated, distributed systems, as an alternative to a firm-based one. Specifically, using the case of Linux kernel development project, we build a model of community-based, evolutionary knowledge creation to study how thousands of talented volunteers, dispersed across organizational and geographical boundaries, collaborate via the Internet to produce a knowledge-intensive, innovative product of high quality. By comparing and contrasting the Linux model with the traditional/commercial model of software development and firm-based knowledge creation efforts, we show how the proposed model of knowledge creation expands beyond the boundary of the firm. Our model suggests that the product development process can be effectively organized as an evolutionary process of learning driven by criticism and error correction. We conclude by offering some theoretical implications of our community-based model of knowledge creation for the literature of organizational learning, community life, and the uses of knowledge in society.
Managerial summary: The ability to redeploy resources inside the firm reduces the cost of entry "mistakes." If a new business turns out to have poor profitability, the ability to redeploy more of its resources back into the firm's other businesses allows recycling of investment and can
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.