Gauging the impact of knowledge management practices on organizational performance – a balanced scorecard perspective

DOIhttps://doi.org/10.1108/VJIKMS-07-2016-0038
Publication Date12 February 2018
Pages21-46
Date12 February 2018
AuthorVikas Gupta,Meenu Chopra
SubjectInformation & knowledge management,Knowledge management,Knowledge management systems
Gauging the impact of knowledge
management practices on
organizational performance a
balanced scorecard perspective
Vikas Gupta and Meenu Chopra
Delhi School of Management, Delhi Technological University, Delhi, India
Abstract
Purpose This paper aims to explore knowledge management (KM) literature to understand the
relationships among different KM practices and organizational performance (OP) in terms of the four
balanced scorecard (BSC) outcomes, i.e. learning and growth, internal process, customer satisfaction and
nancialperformance, as a measure of OP.
Design/methodology/approach A systematic review of peer-reviewed journal articles has been
carried out of theoretical and empirical articles to understand the linkages between KM practices and OP,
accessed mainly through sources, such as ProQuest, EBSCO host, Google Scholar and other e-databases.
Measures of OP have also been extracted from the literature and groupedunder the four BSC outcomes to
gauge the gravityof the effect. An integrated conceptual framework helps to explorethe relationship between
the said variables.
Findings This study provides a conceptual model of the effect of various KM practices on different
aspects of OP measured through BSC. It contributes to organizations by helping them understand the
importance of integrationof the KM efforts to obtain desirable results. It will, for the rst time, put the entire
organization in perspectiveand help managers draw a bigger picture to understand the overall effect of KM
practices.
Research limitations/implications First, the KM practicesshortlisted for this research are extensive
but the list may not be exhaustive. Second, the model is not empirically proved.Findings of the study would
help in creatinga roadmap to enhance performance by a successful implementationof KM practices.
Originality/value This paper contributesto KM literature by adding the fact that KM practicesnot only
affect learningand growth perspective of an organization but also havefar-reaching effects on OP in terms of
customerservice perspective, internal process perspectiveand nancial perspective.
Keywords Literature review, Organizational performance, Balanced scorecard,
Knowledge management practices
Paper type Literature review
1. Introduction
In the twenty-rst century, knowledgemanagement (KM) is widely acknowledged as a tool
for sustaining a competitive edge.Developing and maintaining KM, it seems, are extremely
important for long-term survival and success of an organization (Galati, 2015;Durst et al.,
2013;Bigliardi et al., 2010).Organizations are implementing various KM practicesto gain an
advantage over competitors. Underconditions of erce competition, globalization and rapid
innovation, KM and its implications are vital for achieving success in business (Zack et al.,
2009). KM, it is stated, hasa profound effect on the various aspects of business performance.
It is assumed that a large part of knowledge that exists in an organization is tacit and
informal. This knowledge helps the organization to have the business competitiveness and
Knowledge
management
practices
21
Received14 July 2016
Revised18 May 2017
Accepted30 May 2017
VINEJournal of Information and
KnowledgeManagement Systems
Vol.48 No. 1, 2018
pp. 21-46
© Emerald Publishing Limited
2059-5891
DOI 10.1108/VJIKMS-07-2016-0038
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2059-5891.htm
innovativeness. Hence, it becomes imperative to identify KM practices within an
organization, which when followed, give an organization a competitive edge. Also, it is of
importance to exploreaspects of business impacted by the use of these KM practices.
Nonaka (1991) proposed that knowledge andits proper utilization are sources of lasting
competitive advantage. Other researchers in the eld of sustainable competitive advantage
(Adams and Lamont, 2003;Sinha et al.,2012) have also written that knowledge, which
includes what the organization knows,how it uses what it knows and how fast it can know
something new, isthe only thing that offers an organization a competitiveedge.
KM is a widely used concept in business management discussions and hence has been
widely investigated in different contexts (Miozzo et al.,2016), in different industries
(Bigliardi Galati andPetroni, 2014) and in different countries (Mertins et al., 2001). Similarly,
balanced scorecard (BSC) has been investigated in different contexts (Bigliardi and Ivo
Dormio, 2010), different industries (Bigliardi and Bottani, 2010) as well as in different
countries (Speckbacher et al.,2003). However, a study on organizational performance (OP)
involving the perspectivesof both KM and BSC is missing. Major research in thearea of KM
and OP has been theoretical andconceptual with most of the papers focusing on developing
a framework of the relationship between KM and OP through a case study approach
(Nonaka and Takeuchi, 1995;Edvinsson and Malone, 1997;Zaim et al., 2007). Recent
researchers have triedto empirically assess the effect of KM practices on the performanceof
an organization (Lee and Choi, 2003;Gloet and Terziovski,2004;Darroch, 2005;Tanriverdi,
2005; Daniel and Simon, 2006; Zack et al.,2009;Kianto, 2011;Andreeva and Kianto, 2012;
Sinha et al.,2015). This body of research contains valuable and insightful concepts and
frameworks that havehelped develop KM as a discipline.
However, one notices thatOP has been understood and measured in various ways across
existing studies, ranging from innovativeness (Darroch and McNaughton, 2003;Gloet and
Terziovski, 2004;Kiessling et al.,2009;Kianto, 2011,Sinha et al.,2015), product and
employee improvement (Kiessling et al.,2009) to product leadership, customer satisfaction
and operational excellence (Zack et al.,2009), competitive position (Lee and Choi, 2003) and
nancial outcomes (Tanriverdi, 2005;Darroch, 2005;Palacios Marqués and José Garrig
os
Sim
on, 2006;Zack et al.,2009;Andreeva and Kianto, 2012). The overall conclusion is that
KM does have an impact on performance, though some extent of disagreement exists as to
whether this effect is direct or mediated through some other variables (Andreeva and
Kianto, 2012). The papers link KM with various outcomes; however, a more all-inclusive
approach such as BSC would help the new age managers to comprehendthe impact of KM
practices on various business performance indicators in a better way. To the best of our
knowledge, very few researchershave examined the effect of KM practices on OP based on
BSC. Literature on the measurementof the effect of KM practices on OP through BSC is very
recent (Tubigi and Alshawi, 2015;Valmohammadi and Ahmadi, 2015) and bears limited
scope. An attempt has been made to study relevant literatureon KM practices and its effect
on aspects of OP. The principal objective of this research is to study the literature
concerning the perceived quality and extent of KM practices to clearly examine the
relationship between KM practices and performance outcomes. The model is a result of a
thorough analysis of research papers, which makes it in-depth and comprehensive in its
approach toward developingan understanding of the relationship.
Second, although the overall conclusion from these research papers is that KM does
impact some aspectsof business performance, it seems all this informationexists in bits and
pieces and needs to be brought to onecommon platform for better understanding. There is a
need for integration of the existing set of information and this integration is going to be
useful in both theory and practice.
VJIKMS
48,1
22

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