UU – MBA - 717

Week 7 – Topic Overview

The Role of Knowledge Management and Intellectual Capital

in Strategy

Learning Outcomes
After successfully completing this week, you will be able to

• Describe what is meant by knowledge.

• Identify the characteristics of knowledge.
• Assess the importance of Knowledge Management in strategy.
• Identify the Intellectual Capital in an organization.
• Describe the structure that constitutes the balance of intellectual capital.
• Apply an appropriate framework when measuring intellectual capital.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 1|Page
UU – MBA - 717

Contents
1. Knowledge Management ............................................................................................................... 3

1.1 Resource-Based View of Knowledge Management for Competitive Advantage ................. 4

1.2 What is Knowledge Management? ........................................................................................ 5

1.3 The role of knowledge in organizations................................................................................. 7

1.4 Knowledge creation and sharing ............................................................................................ 8

1.4.1 The SECI model ................................................................................................................... 9

2. Intellectual Capital ....................................................................................................................... 11

2.1 Identifying Intellectual Capital ............................................................................................. 11

3. The link between Knowledge, Intellectual Capital, and Strategy .................................................. 14

References .......................................................................................................................................... 16

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 2|Page
UU – MBA - 717

1. Knowledge Management

We live in the Knowledge Age, a new era that is likely to have a radically different outlook and which will entail a
new business compass to traverse (van Buren, 1999). Quickness is crucial to the success of firms in the rapidly
changing setting of the knowledge era. The concept of knowledge in strategic thinking is not a new one and underpins
several perspectives from the traditional ideas of planning to the resource-based view of strategy (Drew, 1999).
However, the learning basis of Strategy as Practice theory and approaches to Intellectual Capital (IC) brings
awareness of knowledge more to the front of strategic thought. Therefore, it is pertinent to pause and consider a
definition of the term before exploring it in more depth:
“Knowledge is awareness, consciousness or familiarity gained by experience or learning”
(Johnson, Scholes & Whittington, 2011, p. 43)
The important characteristic of the Johnson et al. (2011) view is the deliberate way that knowledge is generated
through activity. Thus, gaining knowledge is not a passive exercise and to understand it the activities involved need
to be explored. A Knowledge Management System (KMS) is focused on the ability to communicate, coordinate, and
collaborate using information. Knowledge sharing has several apparent strategic advantages. When employees'
expertise is shared, the value of that knowledge increases, allowing an organization to grow.
Individuals and organizations started to recognize the growing importance of knowledge in the emerging competitive
environment in the mid-1980s. The international competition was changing to increasingly emphasize product and
service quality, responsiveness, diversity, and customization. Some organizations had been pursuing a knowledge
focus for some years, but during this period it started to become a more widespread business concern. Faraj and
Wasko (2002) found that knowledge contributions were due to
1. participants wanting to create relationships with others who have similar interests.
2. participants being driven by the need for actualizing their potential, learning, and advancing the community.
In a 1989 survey, several Fortune 50 CEOs agreed that knowledge is a fundamental factor behind an enterprise’s
success and all its activities. They agreed that enterprise viability centers directly upon the competitive quality of the
knowledge assets and their successful exploitation. Leaders of progressive organizations and nations are pursuing
ways to create and generate value from knowledge assets within their organizations. Often, personal beliefs spur these
efforts, paired with strong convictions that competitive knowledge assets and their effective utilization are critical for
success. The explicit focus on knowledge is so recent that business practitioners still lead KM exploration and
implementation work (Drew, 1999).

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 3|Page
UU – MBA - 717

Organizational knowledge is the sum of all knowledge contained within an organization that can provide business
value. It may be gained from intellectual property, product knowledge, lessons of failure and success, conferences,
or customer communications, just to name a few sources. Knowledge is always learned, preserved, and transmitted
by people, so it is the key responsibility of Human Resources (HR) to help manage this knowledge.

1.1 Resource-Based View of Knowledge Management for Competitive Advantage

KM is a key approach to solving current problems such as competitiveness and the need to innovate, which is faced
by businesses today (Wickramasinghe, 2003). Competitive advantage can be created in numerous ways, for instance,
by size, location, access to resources (Ghemawat,1986), or even by plain luck (Barney, 1996). The lasting advantage
comes from using knowledge management systems to support what we do well and to add value to resources we
possess that are not readily available to competitors (Rothaermel, 2018, p. 141).
To gain a deeper understanding of how the interplay between resources and capabilities creates core competencies
that drive firm activities leading to competitive advantage, we turn to the resource-based view of the firm. This
model systematically aids in identifying core competencies. As the name suggests, this model sees resources as key
to superior firm performance (Rothaermel, 2018).
Resources fall broadly into two categories:
1. tangible and intangible: Tangible resources have physical attributes and are visible. Examples of tangible resources
are labor, capital, land, buildings, plant, equipment, and supplies.
2. intangible resources: They have no physical attributes and thus are invisible. Examples of intangible resources are a
firm’s culture, its knowledge, brand equity, reputation, and intellectual property.
Competitive advantage is more likely to spring from intangible rather than tangible resources. Tangible assets, such
as buildings or computer servers, can be bought on the open market by any comers who have the necessary cash.
However, a brand name must be built, often over long periods. Google (founded in 1998) and Amazon.com (founded
in 1994) accomplished their enormous brand valuation fairly quickly due to a ubiquitous Internet presence, while
the other companies in the global top-10 most valuable brands—Apple, IBM, Microsoft, McDonald’s, Coca-Cola,
Visa, AT&T, and Marlboro—took much longer to build value and have it recognized in the marketplace
(Rothaermel, 2018).
In the resource-based view of the firm, a resource includes any assets as well as any capabilities and competencies
that a firm can draw upon when formulating and implementing strategy. Besides, the usefulness of the resource-
based view to explain and predict competitive advantage rests upon two critical assumptions about the nature of
resources, to which we turn next (Rothaermel, 2018).

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 4|Page
UU – MBA - 717

Two assumptions are critical in the resource-based model (Rothaermel, 2018):

1. resource heterogeneity and
2. resource immobility.
In the resource-based view, a firm is assumed to be a unique bundle of resources, capabilities, and competencies.
The first critical assumption—resource heterogeneity—comes from the insight that bundles of resources,
capabilities, and competencies differ across firms. This insight ensures that analysts look more critically at the
resource bundles of firms competing in the same industry (or even the same strategic group), because each bundle
is unique to some extent. The second critical assumption—resource immobility—describes the insight that resources
tend to be “sticky” and don’t move easily from firm to firm. Because of that stickiness, the resource differences that
exist between firms are difficult to replicate and, therefore, can last for a long time.

1.2 What is Knowledge Management?

Knowledge management (KM) is the process of leveraging organizational knowledge to deliver long‐term advantage
to a business and is based on a business strategy that involves various knowledge‐centric business processes and
developing organization structures to support these (Shankar, Gupta and Narain, 2003). These, in turn, require
technology to capture, codify, store, disseminate and reuse the knowledge. Successful deployment of KM is not a
simple process. Organizational knowledge relates to ‘Strategic Capability’ but raises the question of whether it can
be managed (Forcadell and Guadamillas, 2002). Indeed, the concept is referred to as Knowledge Management in
much of the literature and organizational practice. The answer may depend on the assumption that “knowledge" like
any other asset can be stored, measured, and moved around in an organization. It is a question that it will pay to have
in mind as we work through this half of the module.
In this manner, there is a distinction between Explicit knowledge and Tacit knowledge. The distinction between tacit
and explicit knowledge is perhaps the most fundamental concept of knowledge management. Such a distinction was
first made by Michael Polyani in the 1960s, but it forms one of the central planks of Nonaka and Takeuchi's
book ‘The Knowledge-Creating Company’ (Nonaka and Takeuchi, 2007). According to the authors, acit
knowledge (knowing-how) is the knowledge embedded in the human mind through experience and jobs. Know-how
and learning are embedded within the minds of people. Personal wisdom and experience, context-specific, more
difficult to extract and codify. Tacit knowledge includes insights, intuitions. Explicit knowledge (knowing-that) is
knowledge codified and digitized in books, documents, reports, memos, etc. Documented information that can
facilitate action. Knowledge-what is easily identified, articulated, shared and employed. However, Dalkir (2005, p.8)
notes that tacit knowledge is quite a relative concept: - what is easily articulated by one person may be very difficult

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 5|Page
UU – MBA - 717

to externalize by another. Thus, the same content may be explicit for one person and tacit for another. There is one
more distinction of knowledge that arise in the mid-2000s: Implicit knowledge. Implicit knowledge or embedded
knowledge is intuitive and embedded experience. It is ineffable, but you know it when you see it, such as the
experience of senior employees, subject matter experts, the nature of professional relationships, and institutional
processes. It’s transmitted through social relationships.
Knowledge can be found almost anywhere in an organization and comes in many tangible and intangible forms. For
example:
• Individual—a person’s notebook, loose documents and files, customer queries and complaints, or an
individual’s memory. These are good sources of tacit knowledge.
• Group/Community—communities of practice, communities of excellence, project teams, internal teams,
training groups, mentorship programs. These are good sources of explicit, implicit, and tacit knowledge.
• Structural—routines, processes, culture, traditional ways of doing things, IT systems, suppliers. These are
sources of implicit knowledge.
• Organizational memory—the knowledge of your entire organization. It can be contained in guidelines,
regulations, reports, market research, records, and data. These are good sources for a combination of tacit and explicit
knowledge.
To help make sense of knowledge, two sets of relationships are worth examining as they provide the foundations for
the strategic value that can be derived. Firstly, is the idea of a Knowledge Pyramid that illustrates that way that
knowledge is built from the data and information generated in business life. The DIKW Pyramid (Figure 1) represents
the relationships between data, information, knowledge, and wisdom. Each building block is a step towards a higher
level - first comes data, then is information, next is knowledge and finally comes wisdom. Each step answers different
questions about the initial data and adds value to it. The more we enrich our data with meaning and context, the more
knowledge, and insights we get out of it so we can take better, informed and data-based decisions.
Figure 1 - The DIKW Pyramid
(Fricke, 2019)

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 6|Page
UU – MBA - 717

Wisdom

Knowledge

Information

Data

Secondly, is the balance of three elements that come together in any organizational context i.e. People; Process;
Technology.

1.3 The role of knowledge in organizations

Part of the difficulty in making sense of the knowledge in an organization is the myriad ways in which it is evident
in all of the activities that a business is engaged with, but it can be encapsulated in the following quote:
“We know that the source of wealth is something human: knowledge. If we apply knowledge to tasks, we already
know how to do, we call it productivity. If we apply knowledge to tasks that are new and different, we call it
innovation. Only knowledge allows us to achieve these two goals.” (DeTienne and Jackson, 2001)
Examples of organizational knowledge are:

• Market insights: What do customers value?

• Competitive intelligence: What about new entrants or substitute products?
• Technological expertise: Can lead to innovative products or processes
• Understanding of Environmental (PESTEL) factors: Strategic knowledge
According to a study by Tseng (2016), the most important reasons knowledge management is needed within an
organization are:

1. Speeds up access to information and knowledge: In his famous quote, Lew Platt, former CEO of Hewlett-Packard,
once said: “If HP knew what HP knows, we would be three times more productive”. In other words, knowledge

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 7|Page
UU – MBA - 717

management makes it easier to find the information or the people who hold the information you need. It increases
efficiency and productivity and allows you to work better, reducing the tendency to “reinvent the wheel”.
2. Improves decision-making processes: Employees can improve the quality and speed of decision-making by
accessing the knowledge of the entire organization when they need it. When making decisions, enterprise
collaboration tools facilitate the access to opinions and experiences of different people, which may contribute
additional perspectives to the choices made.
3. Promotes innovation and cultural change: Enable and encourage the sharing of ideas, collaboration and access to
the latest information. Knowledge management enables individuals to stimulate innovation and the cultural
changes needed to evolve the organization and meet changing business needs
4. Improves the efficiency of an organization’s operating units and business processes: With faster access to
information and resources across the organization, knowledge workers can act quickly. A study conducted by
McKinsey & Co. in November 2011, wherein more than 4,200 executives were interviewed worldwide, showed
that the use of social collaboration technologies has improved business processes and the organization’s
performance in general.
5. Increases customer satisfaction: The sharing of knowledge and cross-collaboration help to increase the value
offered to customers. The organization can give faster answers or shorten the time it takes to improve a product
or service.

Knowledge management is now considered as one of the pressing challenges in economic development related to the
world of industry, studies in services, and information. The adoption and implementation of knowledge management
practices may be considered as a breakthrough factor for companies willing to integrate in the knowledge-based
economy. Evidence shows that organizations and companies are paying increasingly greater attention to knowledge
management systems for ensuring their possession, exchange, and use of productive knowledge to improve the
training level and increase productivity. However, literature does not provide any universal definition of “knowledge
management” (Bello and Margilaj, 2018).

1.4 Knowledge creation and sharing

Knowledge is key to sustainable competitive advantage. Knowledge which is tacit and embedded in the routines and
culture of an organization is difficult to imitate. Sustainable competitive advantage is, therefore, more achievable
where organizations are adept at knowledge creation (Thompson et al., 2013). Understanding what knowledge is and
how valuable it can be to strategic thinking is a fruitful starting point but one that does not necessarily offer practical
benefits. It is important, therefore, to consider the ways that knowledge is generated and more significantly shared.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 8|Page
UU – MBA - 717

To this end, several categorizations lend themselves to exploring these ideas. Firstly three activities are at the heart
of organizational use of knowledge, namely (Nevis, 1995):
• Acquisition
• Sharing
• Utilization
Secondly Nevis themes can be reflected through the need to (Davenport, 1998):
• Create Repositories
• Improve Access
• Enhance Environment
Often, though not exclusively these factors are managed through the use of information technology. However, as we
have already considered in the need for a knowledge balance there exists a danger that technology is seen as a panacea
rather than a tool. Indeed, a more fundamental understanding of knowledge is offered through the ideas of knowledge
conversion, principally in the work of Nonaka who explored the ideas of tacit and explicit knowledge and the way
they can interact to develop knowledge. The resulting SECI model is an effective means of organizations starting to
consider the methods of knowledge sharing that can be utilized.

1.4.1 The SECI model

The SECI model of Nonaka (1994) is the best-known conceptual framework for understanding knowledge generation
processes in organizations (Farnese et al., 2019). The SECI model consists of four modes of knowledge conversion:
socialization (tacit to tacit), externalization (tacit to explicit), combination (explicit to explicit), and internalization
(explicit to tacit).
• Socialization is the process of sharing tacit knowledge through observation, imitation,
practice, and participation in formal and informal communities (Yeh et al., 2011). The
socialization process is usually pre-empted by the creation of a physical or virtual space where
a given community can interact on a social level.
• Externalization is the process of articulating tacit knowledge into explicit concepts (Yeh et
al., 2011). Since tacit knowledge is highly internalized, this process is the key to knowledge
sharing and creation.
• Combination is the process of integrating concepts into a knowledge system (Yeh et al.,
2011).

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 9|Page
UU – MBA - 717

• Internalization is the process of embodying explicit knowledge into tacit knowledge (Nonaka
& Takeuchi, 2007).
Diagram 1 – The SECI Model
(Nonaka & Takeuchi, 2007)

Nonaka and Takeuchi (1995) also delineated four knowledge assets that are considered indispensable to enhance
the value of a firm. While again delineated to address the knowledge needs of a business organization, these four
knowledge assets can be easily applied to educational institutions (Ozmen and Muratoglu, 2010). As in any
organization, knowledge creation and exploitation in education must be effectively managed. Figure 2 helps to
create an inventory of an institution’s knowledge assets. Since knowledge assets are inherently dynamic, cataloging
is not enough (Nonaka & Takeuchi, 1995). New and existing knowledge assets must be effectively delineated and
integrated to create a knowledge system.

Figure 2 – Four categories of knowledge assets

(Nonaka & Takeuchi, 2007)

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 10 | P a g e

UU – MBA - 717

2. Intellectual Capital

This theme introduces the concept of Intellectual Capital (IC). It considers the issues in measuring and understanding
intellectual capital and explores example frameworks aiming to make sense of intellectual capital.

What is Intellectual Capital?

One of the ways of considering the idea of IC is as “A firm’s holistic prowess and potential for creating value” (Rastogi,
2002). The academic perspective offered by Rastogi can be developed in a more business direction along the lines of
“Intellectual Capital is something you cannot touch, but it still makes you rich.” (Sullivan, 1998). The background to
this concept can be found in at least three disciplines (Edvinsson and Sullivan, 1996):

• Sociological – in the way that people, and how they communicate, are at the heart of the thinking
on the term;
• Economic – the term capital is a clear indication of how businesses look to derive value from the
human resource that is increasingly at the heart of organizations;
• Accounting – As knowledge-based aspects are at the core of Intellectual Capital it is not surprising
that companies look to understand how they can better reflect the value of a business to include
the intellect of its staff and activities.

Drawing on from the Economic and Accounting basis of the concept a simple, but powerful, the question raises itself
- Is it a way of making tangible the intangible? As the Thomas Stewart quote illustrates, ‘if the modern business is
increasingly based on the knowledge and skills it contains, who can they be captured and made sense of?’

2.1 Identifying Intellectual Capital

With the growth of the knowledge economy, organizations have found that the value of an organization is not just the
financial capital of an organization but also its intellectual capital. Since intellectual capital is an intangible asset,
identification of its indicators and its variables from the financial and cost perspective has become a challenge for
managers. A potential difficulty raised by the concept of Intellectual Capital is how to structure and identify what
constitutes the balance of Intellectual Capital within an organization. Therefore, several categories of Intellectual
Capital can be distinguished in the literature. Below are examples of the categories that are often referred to (Edvinsson
and Sullivan, 1996):
1. Social Capital – Relationships within & outside the organization.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 11 | P a g e

UU – MBA - 717

2. Human Capital – The people within the organization.

3. Structural Capital – The processes and operations of the organization.
4. Customer Capital – Value of external relationships.
Importantly, whatever the category, a critical consideration is that knowledge underpins all of them and it is the
ability to consider these skills and activities that is at the core of the value of exploring and improving Intellectual
Capital.
Converting knowledge or intellectual capital into long-term business value is, in practice, a far more difficult process
than in theory. While developing and implementing knowledge or intellectual capital philosophies in management
processes, companies experience difficulties in measuring the contribution of their intangibles to business results
and, what is more critical, companies fail in their efforts to reproduce the conditions and the processes that have
unlocked the value creation potential of their intangibles. The challenge for corporations in the coming years is to
identify all the elements of their value creation cycle (their strategically important tangible and intangible resources)
and how these must flow, interact and contribute to sustain the organic development of the organization and
significantly enhance its value creation capabilities.
2.2 How Do We Measure Intellectual Capital?

Business has always relied on its intangible resources, along with tangible and capital resources, to create value and
achieve the organization’s goals. Business performance and success depend on how well an organization manages
its resources. Formerly, business resources comprised 80 percent of tangible and capital resources, with intangible
assets making up around 20 percent. Gradually, this changed with intangible assets reaching 80 percent of the assets
of most organizations by 1999. Leonard Nakamura estimated the corporate sector investment in intangible assets in
2000 was about $1 trillion - comparable to that sector’s investment in property, plant and equipment. Half of this
was related to the intangibles of research and development, and of software. The balance was other intangibles, such
as brands, human resources, and organizational processes (Holtham and Youngman, 2000).
Wanting to measure something is a starting point but it does not necessarily identify the way that the measurement
should be carried out or the headings that will help to fill the IC containers that have already been introduced. Other
forms of capital do not present such an awkward problem as finance can be clearly measured and the physical assets
of an organization can be counted and evaluated. In contrast, the intelligence of a company is not such a
straightforward and agreed concept as it is dependent on subjective assessments. So, what sort of headings lend
themselves to help us understand the IC within an organization? For example, if we are looking to develop the Human
Capital of a company the following are starting points:

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 12 | P a g e

UU – MBA - 717

• Qualifications

• Training

• Skills

• Experience

Inevitably there is a close link here with ideas of performance management and performance indicators e.g., Critical
Performance Indicators (CPIs). Intellectual capital is thus strategic. This connection between intellectual capital
and corporate strategy is pivotal as knowledge-intensive companies often make their intellectual capital work through
organizational procedures rootable in various places, e.g. information systems, branded goods, patents, research, just-
in-time production methods, extensive cooperative relations with customers and suppliers, internal training systems,
quality management systems etc. Intellectual capital must be managed in a long-term perspective. It takes a long time
to develop organizational competencies because they represent experiences in combining intangible and tangible
assets gained over time. It is developed and embodied over time.
The goal of intellectual capital measurement is not to determine how much knowledge or intellectual capital has the
firm by counting the number of computers or key employees, but how effective the organization is in creating value
from it. Performance measurement can be divided into three main phases which are designing, implementing and
using performance measures (Crăciun and Scrioşteanu, 2008). Sometimes updating the measurement system is
considered as a fourth phase.
1. Designing refers to choosing what to measure and defining the performance measures.
2. Implementing refers to putting the measures in practice by, e.g., educating employees and developing
information systems.
3. Performance measurement research has focused most on designing, almost as much on implementing
and least on using performance measurement. Consequently, the process for choosing indicators or
metrics used by the measurement systems is similar and follows these general steps:
1. Use one of the intellectual capital structures.
2. Identify the assets that will be monitored under each of the classes by determining the desired
outcomes.
3. Determine the key success factors (KSFs) that will enable the attainment of the desired outcomes,
and link them to financial performance.
4. Design indicators that monitor the KSFs.
5. Measure and track the indicators over a defined period of time.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 13 | P a g e

UU – MBA - 717

6. Review and adjust. The measurement of intellectual capital is possible by means of four categories
forms:
• Human resources: This category covers statements about the composition,
management and satisfaction of the human resources.
• Customers: This category covers statements about the composition, management and
satisfaction of the customers.
• Technology: This category typically covers statements about the scope, function and
application of the IT system.
• Processes. This category typically covers statements about the scope, equipment and
efficiency of the business activities.

3.The link between Knowledge, Intellectual Capital, and Strategy

Over the course of the 1990s the level of interest as well as the sophistication of best practices in the management of
intangible assets has increased dramatically (Suzanne and Patrick, 2000). The current market economy is primarily
concerned with the expression of direct financial revenues, but the expression of intangible capital is gaining traction,
as it is also a component of the subject's market value. In today's world, communicating an organization's importance
must be more focused on the retention of key employees and the use of their expertise and creativity skills to
emphasize image, brand, and basic equity development. Those companies that use their ability to discover and grow
human resources to gain a competitive edge, will soon be in a better position (Ozmen and Muratoglu, 2010).
In recent years, strategists are demanding more and more information about investment profitability, not just in terms
of material provision and technology, but also in terms of human resources (Sullivan, 1998). It is much easier to report
and evaluate technology investments than it is to report and evaluate human resource investments. Such issues do
exist, and they must be acknowledged. But, at this moment, companies are not sufficiently aligned with the theory of
human capital investment; as a result, several times, employee investment is reflected in terms of costs that are
equivalent (and often higher) than the cost of physical capital.
According to Heisig (2009), the critical success factors involved in knowledge management and strategic options
include human-oriented factors (culture, people, and leadership), organization-oriented factors (processes and
structures) and management-processes-oriented factors (strategy, goals, and measurement). Obeidat et al. (2017), add
that intellectual capital can facilitate knowledge sharing in may ways.
As previously mentioned, human capital is known as an organization's most valuable intangible asset, the foundation
of all forms of information, and the primary source of intellect, knowledge, creativity, and invention, so it is critical

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 14 | P a g e

UU – MBA - 717

for knowledge sharing. The value of management support to a team's success lies in providing appropriate policy
support and allocating resources as required, both of which represent managers' capacity.
Additionally, information sharing can be influenced by positive aspects of knowledge management, such as
technology, structure, and culture. Byrne (2001) claims that organizational structure is essential in promoting
knowledge sharing, while Egbu (2004) claims that a strong organizational infrastructure, versatile knowledge
structure, knowledge-friendly community, and positive motivational strategies can all help to promote knowledge
sharing.
Furthermore, information sharing is at the heart of the knowledge management process, and intellectual capital will
help with knowledge integration, sharing, and development by promoting interpersonal communication. According
to Mu and Benedetto (2011), if an organization has a mutual partnership network, its participants will easily meet one
another's demands, fostering collaboration, facilitating information exchange and sharing, and increasing resource
integration productivity. High levels of interaction can strengthen the social ties among partners, strong relationships
can improve the closeness of interactions, and close interactions can promote knowledge exchange and transfer as
well as achieve knowledge sharing. Last but not least, given the unique, socially dynamic, and path-dependent
characteristics of businesses, information sharing is seen as a valuable input for innovation. Only when shared,
integrated, and utilized through organizational learning, knowledge can be transformed into new products,
technologies, and services to meet the needs of customers and improve the innovation performance of enterprises.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 15 | P a g e

UU – MBA - 717

References
Barney, J. B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99-120.
Bello, K., & Margilaj, E. (2018). Knowledge, a strategic asset for business organizations. In Proceedings-11th
International Conference on Management, Enterprise and Benchmarking (MEB 2018). Óbuda University, Keleti
Faculty of Business and Management, 6-16.
Byrne, R. (2001). Employees: capital or commodity?. The Learning Organization.
Crăciun, L. I. V. I. U., & Scrioşteanu, A. (2008). How to measure intellectual capital. Annals of the University of
Craiova. Economic Sciences Series, 3(36), 1239-1244.
Dalkir, K. (2005). The knowledge management cycle. Knowledge management in theory and practice. Oxford:
Elsevier.
DeTienne, K. B., & Jackson, L. A. (2001). Knowledge management: understanding theory and developing strategy.
Competitiveness Review: An International Business Journal.
Drew, S. (1999). Building knowledge management into strategy: making sense of a new perspective. Long range
planning, 32(1), 130-136.
Edvinsson, L., & Sullivan, P. (1996). Developing a model for managing intellectual capital. European management
journal, 14(4), 356-364.
Egbu, C.O. (2004). Managing knowledge and intellectual capital for improved organizational innovations in the
construction industry: An examination of critical success factors. Eng. Constr. Archit. Manag. 11, 301–315.
Faraj, S. and Wasko, M.M. (2002). The Web of Knowledge: an Investigation of Knowledge Exchange in Networks of
Practices’. Working Paper.
Farnese, M. L., Barbieri, B., Chirumbolo, A., & Patriotta, G. (2019). Managing knowledge in organizations: A
Nonaka’s SECI model operationalization. Frontiers in psychology, 10, 2730.
Forcadell, F. J., & Guadamillas, F. (2002). A case study on the implementation of a knowledge management strategy
oriented to innovation. Knowledge and Process Management, 9(3), 162-171.
Frické, M. (2019). The knowledge pyramid: the DIKW hierarchy. KO KNOWLEDGE ORGANIZATION, 46(1), 33-46.
Holtham, C., & Youngman, R. (2003, May). Measurement and reporting of intangibles–a european policy perspective.
In Proceedings of the 5th Conference on Intangibles, McMaster University, Canada.
Homans, G.C. (1958). Social Behavior as Exchange. Am. J. Sociol, 63, 597–606
Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnér, P. (2011). Exploring strategy. Financial Times
Prentice Hall.
Mu, J.; Benedetto, C.A.D. (2011). Strategic orientations and new product commercialization: Mediator, moderator, and
interplay. RD Manag, 41, 337–359.
Nonaka, I., & Takeuchi, H. (2007). The knowledge-creating company. Harvard business review, 85(7/8), 162.
Ozmen, F., & Muratoglu, V. (2010). The competency levels of school principals in implementing knowledge
management strategies The views of principals and teachers according to gender variable. Procedia-Social and
Behavioral Sciences, 2(2), 5370-5376.
Rastogi, P. N. (2002). Knowledge management and intellectual capital as a paradigm of value creation. Human systems
management, 21(4), 229-240.
Rothaermel, F. T. (2018). Strategic management: concepts. Dubuque, IA: McGraw-Hill Education.
Shankar, R., Gupta, A., & Narain, R. (2003). Strategic planning for knowledge management implementation in
engineering firms. Work study.
Sullivan, P. H. (1998). Profiting from intellectual capital: Extracting value from innovation. John Wiley & Sons.
Suzanne, H., & Patrick Sr, H. S. (2000). Profiting from intellectual capital: learning from leading companies. Industrial
and Commercial Training, 32(4), 139-148.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 16 | P a g e

UU – MBA - 717

Thompson, A., Peteraf, M., Gamble, J., Strickland III, A. J., & Jain, A. K. (2013). Crafting & executing strategy 19/e:
The quest for competitive advantage: Concepts and cases. McGraw-Hill Education.

Tseng, S. M. (2016). Knowledge management capability, customer relationship management, and service quality.
Journal of enterprise information management, 5(3), 155-168.

van Buren, M. E. (1999). A Yardstick for Knowledge Management. Training & Development, 53(5), 71- 78.
Wickramasinghe, N. (2003). Do We Practice What We Preach? Are Knowledge Management Systems in Practice Truly
Reflective of Knowledge Management Systems in Theory?, Business Process.
Yeh, Y. C., Huang, L. Y., & Yeh, Y. L. (2011). Knowledge management in blended learning: Effects on professional
development in creativity instruction. Computers & Education, 56(1), 146-156.

Week 7 - The Role of Knowledge Management & Intellectual Capital in Strategy 17 | P a g e