Knowledge Audit with Intellectual Capital in the Quality Management Process: An Empirical Study in an Electronics Company


  • Percy Chi Wai Chan
  • W.B. Lee


group quality assurance, intellectual capital, intellectual capital statement, IC value tree, taxonomy, value added quality management processes


Most of the intellectual capital (IC) assessment tools are based on a “top‑down” approach which does not explore deeply into the particular business process and the specific knowledge needs. Those IC assessment tools generally measure the intellectual capital of an organization as the return on intangible assets covering Human Capital (HC) such as staff skills, innovativeness and work experience, Structural Capital (SC) such as IT systems, documents and patents, and Relational Capital (RC) such as relationship with customers and suppliers. Traditional IC assessment tools with “IC reporting” deliverables aim at identifying useful knowledge that can create wealth for the organization in assessing the performance and value creation process. In contrary, a systematic “knowledge audit” is a process‑oriented and stock‑taking approach for evaluating the “knowledge healthiness” of an organization from the “bottom‑up”. There is potential to merge two methodologies into one integrated assessment tool to present a comprehensive IC reporting in an organization. Knowledge assets underpin the capabilities and core competencies of any organization. The importance of a knowledge audit is the first step in determining how knowledge is handled in mission critical business processes in an organization. Quality management processes are the main subsets inside an organization’s critical business processes. A knowledge audit provides an evidence based assessment of the knowledge assets within an organization, however, there is a lack of a systematic approach in the way knowledge audits are conducted. In addition, there is no standard way of measuring Intellectual Capital (IC) through a better understanding of knowledge assets that are captured from a knowledge audit. The two different streams of KM and IC are complementary and provide the cornerstones for the definition of a managerial framework to identify, assess, exploit and manage organizational knowledge. In view of the importance of the knowledge audit and the deficiencies in the standard ways of IC measurement, a structured knowledge audit approach has been applied. This paper presents an integration of knowledge audit and IC reporting approach which has been applied in a Quality Assurance (QA) Department of an electronics company, for knowledge assets stock‑taking in six specified Value Added Quality Management Processes (VAQMP). More than 74 staff, over 4 corporate functions and 5 departments in two manufacturing plants, from different work levels involving 6 quality management processes from each plant, participated in the research. 52 Participants were provided with various knowledge audit forms to complete in order to provide information about the IT tools/platforms, documents, implicit knowledge, as well as the critical industrial technologies in each VAQMP process. Quantitative and qualitative analysis was then undertaken, including stakeholder analysis and the identification of critical knowledge workers, industrial technologies, crucial documents, implicit knowledge, as well as the knowledge fountain and knowledge discovery points of the process. The outcomes and effectiveness of the knowledge audit were evaluated in both KM and IC aspects. In most Intellectual Capital assessment tools, the workflow of the business process and the specific knowledge needs are not taken into account. On the other hand, this structured knowledge audit helps to identify critical organizational knowledge that needs to be captured and transferred for the healthy operation and sustainability of the quality management processes, in order to prevent quality crises. Finally, after the consolidation of the explicit and implicit knowledge inventories, as well as constructing an IC value tree, an intellectual capital statement for the Group Quality Assurance (GQA) Department was produced.



1 Apr 2011