What is the Value of Knowledge Management Practices?

Abstract

What are the appropriate sources from which to draw evidence about Knowledge Management (KM) and its added value to organisations? This paper attempts to answer this question, first examining the literature for approaches to measuring KM from the perspective of Intellectual Capital (IC) theory. However, findings indicated that many measurement methods or frameworks have limitations. Following the literature review, the researchers then approached KM practitioners, within the UK car manufacturing industry, and undertook in‑depth interviews in an attempt to understand how these organisations value their KM practices. The UK car manufacturing industry was selected because little previous research has been undertaken in this context, most previous studies having concentrated mainly on service industries. It was discovered that, in most of the organisations studied, the link between KM, business benefits and bottom line is almost axiomatic, especially amongst those who are enthusiastic advocates of KM. Drawing on the evidence from the in‑depth interviews, the paper concludes that there is an absence of linking mechanisms between value and measurement. This is due to the differences between the concept of a value and measurement approach and the importance of these two concepts to justify the outcome of KM practices. Recommendations are made through the development of a theoretical framework that includes both objective and subjective dimensions of KM measurement strategy.