Applying a systems thinking framework to assess knowledge assets dynamics for business performance improvement

Knowledge assets represent strategic resources and sources of organizational value creation. Their effective development and deployment is at the basis of organizational value creation capacity. However there is still a lack of applied approaches and tools explaining how knowledge assets dynamics take place in organizational value creation mechanisms. In particular, there is a managerial need to define decision-support frameworks that can enable managers to understand how knowledge assets interact each other and with organizational performance in order to support the achievement of company’s strategic objectives. A better understanding of why and how knowledge assets management initiatives can be turned into value creation mechanisms with positive impacts on business performance is fundamental to avoid misallocation of resources and to support management decisions.This paper proposes a systems thinking-based framework, the Knowledge Assets Dynamics Value Map (KAVDM), to explicate the working mechanisms by means knowledge assets can evolve on the basis of knowledge management initiatives and affect business performance improvements. The KAVDM offers a holistic view of the mechanisms at the basis of how knowledge assets are translated into organizational value. It supports the explanation and monitoring of how knowledge assets are interpedently and dependently linked, and how the management of one knowledge asset activates flow dynamics, that influence both other knowledge assets and business performance. Using the KAVDM managers can reflect upon the knowledge components grounding a company’s value creation and assess their mental models and views of the reality. Finally, an application of the KAVDM within a construction company is presented and its main managerial benefits addressed.     

Knowledge assets value creation map: Assessing knowledge assets value drivers using AHP

The paper presents an application of the analytic hierarchy process (AHP) methodology to support the complex decision making process concerning with the development of causal models showing how organisational knowledge assets contribute to create company’s value. The research is grounded in the resource-based view of the firm, which argues that organisational resources are bundled together. This involves difficulties in understanding which are the most important knowledge assets and how they contribute to company’s performance improvements. The application of the AHP allows to assess the weights for setting the priorities among knowledge assets against the company’s performance targets. Adopting the AHP, the knowledge assets value creation map (KAVCM) is proposed as an approach to visualise and analyse the cause-and-effect relationships linking knowledge assets with company’s performance. This allows to understand how to lever and drive knowledge assets in order to sustain company’s value creation dynamics. The application of the KAVCM is, finally, tested by its application to the identification of the knowledge assets value drivers at the basis of NPD performance improvements within an Italian leader company operating in sofa industry.     

Using Fuzzy AHP to manage Intellectual Capital assets: An application to the ICT service industry

In today’s competitive business environment, Intellectual Capital (IC) management is ever more recognized as a fundamental factor in gaining competitive advantage. Actually, most firms have only a vague idea of how to manage investments in IC and what they should obtain from these investments. As a result, many companies overlook to balance IC investments, overinvesting in some IC components and neglecting other ones. Following this lead, the aim of the paper is to assess the relative importance of IC components, with respect to their contribution to the company value creation, in order to obtain guidelines for IC management and investments.We propose a model for IC evaluation by integrating Fuzzy Logic and Analytic Hierarchy Process (AHP). This Fuzzy AHP approach allows to capture and foster IC dynamics: experts and managers are greatly supported by the use of linguistic variables in the evaluation process of the company intangible assets. Finally, the application of the Fuzzy AHP methodology to a group of ICT service companies is presented.     

Stocks and flows underlying organizations’ knowledge management capability: Synergistic versus contingent complementarities over time

What are the components of a knowledge management (KM) capability and how do they impact firm performance? Based on prior research, we modeled a firm's KM capability in terms of its accumulations of stock – in the areas of human resources, technology infrastructures, and strategic templates – and regulation of flow, via institutionalization and internal and external learning processes. We then considered the extent to which these components complement one another in their impact on two types of firm performance – efficiency, based return on assets, and value creation, assessed as Tobin's q (the ratio of the capital market value of the firm to the replacement value of its assets). We posited differential types of stock-flow complementarities across these two performance outcomes over time – stable, positive effects on firm efficiency, synergistic complementarity, and initially positive, but subsequently negative effects on value creation, contingent complementarity. Data gathered from 218 Korean firms supported this premise. Implications for practice in the evolving fields of organizational capability and complementarities were explored.     

Exploiting and transferring presentational knowledge assets in R&D organizations

Nowadays, how to exploit and transfer the value of knowledge assets effectively has been the primary challenge faced by global R&D organizations. Surprisingly, there seems to be little argument about managing presentational knowledge assets, which are widely used by knowledge workers to present their ideas, proposals, findings and reports. This paper develops the management model and related IT enabling tools that support users to better exploit and transfer presentational knowledge assets. The solution integrates text extractor, slideshow generator, knowledge repository, content-based retrieval and ontology-enabled search engine along with the goal of portraying the search results in a visual navigation form. The performance satisfaction of the proposed system was proved statistically by conducting the user’s survey of effectiveness and usability. This solution has demonstrated to be a feasible way for better managing contents, prompting cognitive learning, improving presentation production and presentational knowledge transformation, and consequently facilitates the value leverage of the presentational knowledge assets.     

An extended Fuzzy-AHP approach to rank the influences of socialization-externalization-combination-internalization modes on the development phase

Continuous innovation intended to deliver products with new attributes is an imperative driver for organizations to remain competitive in today’s fast changing market. A successful innovation is often associated with adoption and execution of all SECI (socialization-externalization-combination-internalization) modes of knowledge creation within any Product Development (PD) phase. This article is an attempt to argue with the general notion and to distinguish different PD phases’ affinity corresponding to distinct SECI modes. In this regard, the paper proposes an extended Fuzzy Analytic Hierarchy Process (EFAHP) approach to determine the ranking in which any PD phase is influenced from SECI modes. In the EFAHP approach, the complex problem of knowledge creation is first itemized into a simple hierarchical structure for pairwise comparisons. Next, a triangular fuzzy number (TFN) concept is applied to capture the inherent vagueness in linguistic terms of a decision-maker. This paper recommends mapping TFNs with normal distributions about X-axis. This allows us to develop a mathematical formulation to estimate the degree of possibility (importance value) when two TFNs do not intersect with each other (current techniques in literature calculate this value as zero). In order to demonstrate the applicability and usefulness of the proposed EFAHP in ranking SECI modes, an empirical study of development phase is considered. Five criteria and their 19 sub-criteria for measuring the phase’s performance are identified based on both an extensive discussion with subject matter experts and rigorous literature survey. After stringent analysis, we found that the mode that highly influenced the development phase is ‘combination mode’. The article discusses the application of lean tools that can be employed to improve the knowledge creation process.     

Exploring value networks: theorising the creation and capture of value with open source software

The emergence of open source software (OSS) as a form of peer production and innovation challenges theories of organisation and strategy due to its non-reliance on traditional governance mechanisms to organise production. OSS requires firms to rethink the processes that facilitate value creation and capture. The objective of this paper is to theorise how firms create and capture value from OSS. We derive a model from extant research and refine it through the study of three inter-organisational networks. The findings reveal how a firm's ability to access a value network of complementors is crucial for effective value creation and capture. Two types of networks are evident: a high-density network of familiar partners and a low-density network of multiple, often unfamiliar, partners. Leveraging these networks depends on the level of commitment, volume of knowledge exchange and the alignment of objectives among participant firms. Effective governance is revealed as critical for creating and capturing value within both types of network; and depends on both formal and informal mechanisms.     

Revealing performance heterogeneity through knowledge management maturity evaluation: A capability-based approach

The dynamic capabilities view (DCV) focuses on renewal of firms’ strategic knowledge resources so as to sustain competitive advantage within turbulent markets. Within the context of the DCV, the focus of knowledge management (KM) is to develop the KMC through deploying knowledge governance mechanisms that are conducive to facilitating knowledge processes so as to produce superior business performance over time. The essence of KM performance evaluation is to assess how well the KMC is configured with knowledge governance mechanisms and processes that enable a firm to achieve superior performance through matching its knowledge base with market needs. However, little research has been undertaken to evaluate KM performance from the DCV perspective. This study employed a survey study design and adopted hypothesis-testing approaches to develop a capability-based KM evaluation framework (CKMEF) that upholds the basic assertions of the DCV. Under the governance of the framework, a KM index (KMI) and a KM maturity model (KMMM) were derived not only to indicate the extent to which a firm’s KM implementations fulfill its strategic objectives, and to identify the evolutionary phase of its KMC, but also to bench-mark the KMC in the research population. The research design ensured that the evaluation framework and instruments have statistical significance and good generalizabilty to be applied in the research population, namely construction firms operating in the dynamic Hong Kong construction market. The study demonstrated the feasibility of quantitatively evaluating the development of the KMC and revealing the performance heterogeneity associated with the development.     

Knowledge spaces and places: From the perspective of a “born-global” start-up in the field of urban technology

The success of cities increasingly relies on its capacity to capitalize on its knowledge base, but also on its potential to anchor external knowledge and the strategies of knowledge-based firms. In this paper we analyze how a “born global” start-up firm is linked to different types of places, and how it explores and exploits different territorial innovation potentials. Our case company—i.e., Living PlanIT—develops, tests and sells smart city software to processes real-time information collected through sensors embedded in a city’s buildings and infrastructure towards energy savings and manifold efficiency gains. The paper illustrates how the interaction with different places and knowledge-based cities provides unique resources for the technology development, search, experimentation, market formation and societal legitimation. Beyond focusing on a place’s fixed knowledge assets, the paper empirically assesses the innovation functions of different types of knowledge-cities and temporary “non-places” such as international high-level events.     

Business analytics and business value: A comparative case study

With growing adoption of business analytics, it is important for investing firms to understand how business value is created from investments. Studies in IT domain have highlighted how higher investment in technology may not bring more returns, rather how IT as an organizational capability acts as a key mediator in value creation. This research extends the model to business analytics, to identify elements of analytics technology assets and business analytics capability and to understand the mechanism of business value creation using multiple case studies. We capture how analytics resources contribute to business performance by developing operational and organizational performance measures.     

A model of biomimetic process assets to simulate their impact on strategic goals

Process assets (PAs) are acknowledged as contributing to the business value of organizations. Even so, they are still classed and employed as passive elements ready for use for special purposes. This paper considers how the evolution of active PAs over time can best influence the achievement of specific strategic objectives for decision making by CEOs regarding which PAs should be empowered and which do not require investment, etc. This proposal is formulated by rethinking PAs as dynamic elements armed with biomimetic intelligence. This means conceiving of PAs as live elements that interact and make use of swarm intelligence in order to provide a permanent overview of individual PA evolution and its impact on strategic goals. The NetLogo modelling and simulation tool was used to build the proposed model. The input for the simulation model was taken from a real experience of PAs previously identified and assessed in an information technology company.     

Ontology-based data mining model management for self-service knowledge discovery

Data mining (DM) models are knowledge-intensive information products that enable knowledge creation and discovery. As large volume of data is generated with high velocity from a variety of sources, there is a pressing need to place DM model selection and self-service knowledge discovery in the hands of the business users. However, existing knowledge discovery and data mining (KDDM) approaches do not sufficiently address key elements of data mining model management (DMMM) such as model sharing, selection and reuse. Furthermore, they are mainly from a knowledge engineer’s perspective, while the business requirements from business users are often lost. To bridge these semantic gaps, we propose an ontology-based DMMM approach for self-service model selection and knowledge discovery. We develop a DM³ ontology to translate the business requirements into model selection criteria and measurements, provide a detailed deployment architecture for its integration within an organization’s KDDM application, and use the example of a student loan company to demonstrate the utility of the DM^3.     

Personnel selection using analytic network process and fuzzy data envelopment analysis approaches

This paper develops a decision support tool using an integrated analytic network process (ANP) and fuzzy data envelopment analysis (DEA) approach to effectively deal with the personnel selection problem drawn from an electric and machinery company in Taiwan. The current personnel selection procedure is a separate two-stage method. The administration practice shows that the separation between stages 1 and 2 reduces the administration quality and may incur both the top manager’s displeasure and the decision-makers’ depression. An illustrative example by a simulated application demonstrates the implementation of the proposed approach. This example demonstrates how this approach can avoid the main drawback of the current method, and more importantly, can deal with the personnel selection problem more convincingly and persuasively. This study supports the applications of ANP and fuzzy DEA as decision support tools in personnel selection.     

Options analysis and knowledge management: Implications for theory and practice

Real options can be a powerful tool for quantifying the value of strategic and operational flexibility associated with uncertain IT investments. They also constitute a new way of thinking as to how knowledge management (KM) can be implemented and managed to maximize the upside potential while minimizing any downside risk. This paper explored how practitioners can incorporate options analysis into contemporary knowledge management. Options analysis is recognizing real options and then determines how they add value. The main issue here is to manage knowledge so that the theoretical option value is realized in practice. This paper developed a new metric, knowledge management performance index (KMPI), for evaluating the performance of a firm in its KM at any given point in time as follows: knowledge creation, knowledge conversion, knowledge circulation and knowledge completion. The higher the efficiency of the KM process, the higher the KMPI, thereby is enabling firms to become increasingly knowledgeable. To prove the contribution of the KMPI, a questionnaire survey was conducted among 121 firms listed on the Taiwan Stock Exchange Corporation (TSEC). This paper makes five important contributions: (1) it shows that if the KM process improves, the KMPI is enhanced. This finding is based on a survey of the questionnaires. As a result, the KMPI can effectively and efficiently represent the KM process; (2) it shows that when the KMPI increases, a company’s performance will be enhanced in five different areas This indicates a significant relationship between the KMPI and the company’s performance; (3) it also shows that the higher the KMPI, the higher the performance of the organization. This is especially valuable to any organization where knowledge is not being used optimally; (4) it provides an option analysis that may be helpful to managers for making the right decision in an uncertain environment; and (5) it presents the first application of the Black-Scholes model to use an actual business situation involving KM as its test bed. The results proved that the option pricing model can act as a measurement guideline for the entire knowledge of the whole company.     

Sources of value in application ecosystems

Mobile application stores have revolutionised the dynamics of mobile ecosystems. Research on mobile application ecosystems has been significantly driven by data that is focused on the visualisation of an ecosystem's dynamics. This is a valuable step towards understanding the nature of the ecosystems, but it is limited in its explanatory power. Thus, a theory-driven approach is needed to understand the overall dynamics of such systems. This study applies a theoretical framework of value creation in e-business in the context of mobile application ecosystems, with a focus on application developers. A qualitative research strategy is employed in testing operationalisation in a sample of developers. The sample comprises 27 application developers from the three leading mobile application ecosystems. The results show that efficiency is the main source of value, products seldom create value through complementarities, and approaches towards lock-in and novelty seem to vary among application developers. The managerial and theoretical implications of such biased value creation in mobile ecosystems are considered.     

Relationship-specific investment,value creation,and value appropriation in cooperative innovation

The rapid development of information technology (IT) makes it possible for different organizations to ally with each other for cooperative innovation. In this paper, two critical issues involved in enterprise cooperation are addressed: (1) how organization value is added via cooperative business and how the profit from the cooperation is appropriated among the cooperators; and (2) how the cooperative innovation can be implemented effectively. The resource-based view is combined with the transaction cost theory, the equity theory, and the risk-return theory to analyze the influence of the relationship-specific investment (RSI) on the value creation and appropriation in cooperation. Based on our theoretical analysis, a number of hypotheses are made to measure the influence and these hypotheses are tested using empirical data collected from 187 high-tech enterprises in the Northeast region of China. The verification has shown that RSI allows information sharing among collaborators for effective coordination and thus improves the performance of cooperative innovation. RSI positively affects the value appropriation based on investors’ contributions and the risk level involved in the cooperation. RSI increases the value appropriation through the performance promotion effect in cooperation. Minor adverse impact is identified on investor’s dependence. In addition, value creation positively affects value appropriation. The drawn conclusion is significant for developing cooperative innovations under the circumstance in which IT is widely applied to enterprises’ business environment.     

Autonomic-computing approach to secure knowledge management: a game-theoretic analysis

The explosion of knowledge management systems (KMS) and the need for their wide accessibility and availability has created an urgent need for reassessing the security practices and policies in organizations. Security of these assets is a day-to-day job placing a tremendous cognitive load on information-technology (IT) professionals, which can make it almost impossible to manage the security aspects of KMS. Autonomic-computing systems are well suited to manage KMS, as they use high-level system objectives provided by administrators as the basis for managing the security of KMS. The authors model the self-protection and self-healing configuration attributes in autonomic systems through game-theoretic models. The proposed modeling approach progressively moves from a manual intervention-oriented security setup to an autonomic security setup. This allows the authors to compare and contrast the different approaches and provide insights on their applicability to different security environments. The authors find that moving to a partial autonomic system with self-healing mechanisms can provide a stable environment for securing enterprise knowledge assets and can reduce hacking. It is beneficial to implement an autonomic system when manual investigation costs are higher and/or when the volume of malicious traffic is very low. An autonomic approach is especially attractive when it is difficult to impose penalties on malicious users. Autonomic systems can be effective in securing organizational knowledge assets and in reducing the potential damage from malicious users.     

Performance comparison based on customer relationship management using analytic network process

Customer relationship management (CRM) is a multi-perspective business paradigm which aims maximizing the benefits gained from relationships with customers. The aim of this paper is to compare the CRM performances of e-commerce firms using a multiple criteria decision making (MCDM) approach. Analytical network process (ANP) is a MCDM methodology which can take the inner and outer dependencies among multiple criteria into consideration. As there are dependencies among CRM performance evaluation criteria, ANP is used for comparing the CRM performances of the e-commerce firms under consideration. A sensitivity analysis also provided in order to monitor the robustness of the proposed ANP framework to changes in the weights of evaluation criteria. To the authors’ knowledge, this will be the first study which evaluates CRM performance using ANP.     

The monetary value of knowledge assets: a micro approach

Measuring the value of knowledge is rapidly becoming a topic of interest in the wake of the increasing attention for knowledge management. Several approaches have been proposed in the past, most of them focused on measuring at a high level of abstraction the “intellectual capital” of a company. A low-level approach, meant to measure the value of separate knowledge assets is defined in a formal model. The model calculates the return on a knowledge asset (its value) as the difference between the cost incurred for using the knowledge asset in activities to produce products minus the revenues generated by these products. The activity side of this equation relies on Activity Based Costing. For the revenues side different procedures can be used for distributing product revenues over activities and knowledge assets. The approach is illustrated by a case study concerning loan revision performed in a large bank in Netherlands. It was shown that the method is applicable and led in the case study to the unexpected result that the return on most knowledge assets for loan revision was negative. The results of the method could also be used to calculate the financial prospects of re-engineering proposals. To conclude, several constraints and benefits of the method are discussed.     

What you think and what I think: Studying intersubjectivity in knowledge artifacts evaluation

Miscalibration, the failure to accurately evaluate one’s own work relative to others' evaluation, is a common concern in social systems of knowledge creation where participants act as both creators and evaluators. Theories of social norming hold that individual’s self-evaluation miscalibration diminishes over multiple iterations of creator-evaluator interactions and shared understanding emerges. This paper explores intersubjectivity and the longitudinal dynamics of miscalibration between creators' and evaluators' assessments in IT-enabled social knowledge creation and refinement systems. Using Latent Growth Modeling, we investigated dynamics of creator’s assessments of their own knowledge artifacts compared to peer evaluators' to determine whether miscalibration attenuates over multiple interactions. Contrary to theory, we found that creator’s self-assessment miscalibration does not attenuate over repeated interactions. Moreover, depending on the degree of difference, we found self-assessment miscalibration to amplify over time with knowledge artifact creators' diverging farther from their peers' collective opinion. Deeper analysis found no significant evidence of the influence of bias and controversy on miscalibration. Therefore, relying on social norming to correct miscalibration in knowledge creation environments (e.g., social media interactions) may not function as expected.