Conceptual Mapping of Elements Impacting the Value of Knowledge

Abstract

Knowledge, being one of the most critical and essential resource of any organization is now unanimously considered as an asset. Yet it has no place in any of the financial statements that can mention its value or volume. Since the true worth of an organization is largely dependent on its capability to generate positive return in the future. This positive return is primarily based on the volume and the nature of knowledge and its efficient use. And the efficient use of knowledge asset is the unique design and proposition of organizational resources which itself depends on the knowledge. Therefore, it is impossible to ascertain the true worth of an organization without determining the value of knowledge it possesses. This research work attempts to present factors that have an impact on the value of knowledge. Data was collected from professionals and decision-makers who have responsibility related to knowledge management. Starting from the desk research, followed by interviews and questionnaire instrument, the data was collected from business managers working in various industries. Various statistical tools were employed to analyze the data and evaluate the identified items and factors. Finally, the two factors were identified after regrouping of items and initial factors through Principal Component Factor analysis. The new factors were named “Strategic Advantage” and “Core Capabilities”. The integration of “Strategic Advantage” and “Core Capabilities” forms the basic framework for valuing knowledge. The findings will lead to further research in knowledge management. Refinement of the suggested model would enable managers to differentiate the most valuable and useful knowledge assets from the least valuable knowledge. Investors would also benefit from the study as it may help them in evaluating/calculating the actual value/worth of an organization.