Exploring the Correlation Between Knowledge Management Maturity and Intellectual Capital Efficiency in Mainland Chinese Listed Companies

In today's knowledge-based society, discussion on intellectual capital (IC) has become intertwined with knowledge management (KM). KM may be viewed as the activities and processes to create and maximise IC. It may be possible to suggest that an organisation's level of knowledge utilisation is associated with its level of intellectual capital. The purpose of this research was to explore whether there is an association between KM maturity level, as a proxy of assessing the level of KM efficacy and IC utilisation efficiency in companies listed on CSI 100 (China Securities Index Co., Ltd.) in mainland China. A self-assessment of KM maturity level, developed based on the KM self-assessment framework proposed by Collison and Parcell, was used to gauge the knowledge utilisation of an organisation. The intellectual capital efficiency coefficient (ICE), component of the Value Added Intellectual Coefficient (VAIC™), was used to assess the efficiency of intellectual capital. Overall, 26 questionnaires were collected from the surveyed organisations to evaluate their level of KM, which accounted for 25% of the sample. Finally, correlation analysis with SPSS was performed to examine if there was a correlation between ICE and the maturity level of KM in the sampled companies in mainland China. The results showed that the association between the two variables was not statistically significant. In fact, no conclusive evidence was found to support an association between efficiency of utilising intellectual capital, and KM maturity score. The lack of an association may suggest that there may be other intervening variables yet to be identified in the relationship between KM and IC. This study is an attempt to explore the above assertion and to conduct empirical studies in studying their applicability in China, one of the fastest growing economies in the world. While we are not seeking to generalise the results, it may serve as a good reference for further studies in examining the intricate "relationship" between IC and KM, that is, linking a process view of KM to the measurement of value creating intangibles of a corporation epitomised by IC.

[1]  Chimay J. Anumba,et al.  Knowledge management practices in large construction organisations , 2005 .

[2]  Antti Lönnqvist,et al.  Investigating the value and efficiency of intellectual capital , 2007 .

[3]  S. Mann.  Intellectual Capital: The New Wealth of Organizations , 1999 .

[4]  Nick Bontis,et al.  Managing Organizational Knowledge by Diagnosing Intellectual Capital , 2000 .

[5]  Vivek B. Arora.  People's Republic of China : selected issues , 1996 .

[6]  Baldev Raj,et al.  Knowledge management maturity models - a morphological analysis , 2010 .

[7]  Gil Ariely.  Knowledge Management As A Methodology Towards Intellectual Capital , 2002 .

[8]  L. G. Pee,et al.  A Model of Organisational Knowledge Management Maturity Based on People, Process, and Technology , 2009, J. Inf. Knowl. Manag..

[9]  Y. Hwang,et al.  An Empirical Investigation of the Relationship between Intellectual Capital and Firms’ Market Value and Financial Performance , 2005 .

[10]  Karl-Erik Sveiby.  The New Organizational Wealth: Managing and Measuring Knowledge-Based Assets , 1997 .

[11]  Geoff Parcell,et al.  Learning to Fly: Practical Knowledge Management from Some of the World's Leading Learning Organizations , 2004 .

[12]  N. Bontis.  Managing organizational knowledge by diagnosing intellectual capital: framing and advancing the state of the field , 2001 .

[13]  Ante Pulic,et al.  VAIC™ - an accounting tool for IC management , 2002, Int. J. Technol. Manag..

[14]  Sari Salojärvi,et al.  Knowledge management and growth in Finnish SMEs , 2005, J. Knowl. Manag..

[15]  Daniel Zéghal,et al.  Analysing value added as an indicator of intellectual capital and its consequences on company performance , 2010 .

[16]  Atreyi Kankanhalli,et al.  Knowledge Management Metrics: A Review and Directions for Future Research , 2005, Int. J. Knowl. Manag..

[17]  Chinho Lin,et al.  The construction and application of knowledge navigator model (KNMTM): An evaluation of knowledge management maturity , 2009, Expert Syst. Appl..

[18]  Gil Ariely.  Intellectual Capital and Knowledge Management , 2011, Encyclopedia of Knowledge Management.

[19]  Samuel Kai-Wah Chu,et al.  An Empirical Study of the Impact of Intellectual Capital on Business Performance , 2011, J. Inf. Knowl. Manag..

[20]  A. Pulic.  Measuring the performance of intellectual potential in the knowledge economy , 2002 .

[21]  Steven Firer,et al.  Intellectual capital and traditional measures of corporate performance , 2003 .

[22]  Clemente Minonne,et al.  Measuring the effects of knowledge management practices , 2010 .

[23]  Majid Ramezan,et al.  Intellectual capital and organizational organic structure in knowledge society: How are these concepts related? , 2011, Int. J. Inf. Manag..

[24]  Kin Hang Chan,et al.  Charting intellectual capital performance of the gateway to China , 2011 .

[25]  I. Nonaka,et al.  Handbook of Organizational Learning and Knowledge , 2003 .

[26]  P. N. Rastogi,et al.  Knowledge management and intellectual capital – the new virtuous reality of competitiveness , 2000 .

[27]  Kin Hang Chan.  Impact of intellectual capital on organisational performance , 2013 .

[28]  Shyh-Rong Fang,et al.  Cross-country comparison of intellectual capital performance of commercial banks in Asian economies , 2009 .

[29]  H. Saint‐Onge.  Tacit Knowledge: The Key to the Strategic Alignment of Intellectual Capital , 1996 .

[30]  P. Ståhle,et al.  Value added intellectual coefficient (VAIC): a critical analysis , 2011 .

[31]  K. Wiig.  Knowledge management: Where did it come from and where will it go? , 1997 .