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Knowledge Measurement: From Intellectual Capital Valuation to Individual Knowledge Assessment

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The Palgrave Handbook of Knowledge Management

Abstract

Knowledge measurement is recognised as an essential precursor to effective knowledge management (KM) due to its key role in discovering the value of knowledge assets and unveiling their contribution to value creation. This, in turn, enables the formulation of sound KM strategies which seek to bridge knowledge gaps and design KM processes and systems in light of the firm’s intellectual capital. To overcome the complex challenge of measuring intangibles, existing measurement frameworks adopt a financial, scorecard or performance-based approach to appraise knowledge. Although current models provide a useful holistic view of organisational knowledge, they do not consider individual knowledge workers who lead the creation, sharing and application of knowledge to drive organisational performance. This chapter provides an extensive review of the different types of knowledge measurement models in the KM literature. It then argues for the need for individual knowledge assessment to elucidate the role of knowledge holders in firm knowledge dynamics, thus allowing for better allocation and retention of human capital. The antecedents and factors of individual knowledge are then explored through the findings of a recent managerial study by the authors. The study is conducted as a first step towards a new individual knowledge assessment platform.

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Acknowledgement

The authors would like to thank Miss Jenni Floody for her contribution to this chapter. Special thanks to Pharos University in Alexandria, Egypt, for its support of this research.

Author information

Authors and Affiliations

  1. College of Business, Dublin Institute of Technology (DIT), Dublin, Ireland

    Mohamed A. F. Ragab & Amr Arisha

Authors
  1. Mohamed A. F. Ragab
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  2. Amr Arisha
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Editor information

Editors and Affiliations

  1. Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore, Pakistan

    Jawad Syed

  2. School of Management and Enterprise, Faculty of Business, Education, Law and the Arts, University of Southern Queensland, Toowoomba, Queensland, Australia

    Peter A. Murray

  3. School of Business and Economics, Loughborough University, Loughborough, Leicestershire, United Kingdom

    Donald Hislop

  4. Muscat University, St Helens, Merseyside, United Kingdom

    Yusra Mouzughi

Appendix

Appendix

Skandia Navigator Intellectual Capital Metrics (Edvinsson and Malone 1997)

Customer Focus

  • Annual sales/customer

  • Average customer size

  • Average duration of customer relationship

  • Average time from customer contact to sales response

  • Customer rating

  • Customer visits to the company and the number of customer hits to the company website

  • Customers IT literacy

  • Customers lost

  • Customers/employees

  • Days spent visiting customers

  • IT investment per sales person (and perhaps dollars used in advertisement and their effectiveness)

  • IT investment/service and support employee

  • IT literacy of customers

  • Market share

  • Number of contracts/IT employees

  • Number of customers

  • Number of external IT customers

  • Number of internal IT customers

  • Points of sale

  • Rate of repeat customers

  • Ratio of sales contact to sales closed

  • Revenue generating staff

  • Satisfied customer index, e.g. customer contact/support/service through electronic means, number of items of merchandise returned, number of refunds made, etc.

  • Service expense/customer/contact

  • Service expense/customer/year

  • Support expense/customer

  • Telephone electronic accessibility

Process Focus

  • Administrative expense/employee

  • Administrative expense/gross premium

  • Administrative expense/managed assets

  • Administrative expense/total revenues

  • Change in IT inventory

  • Contracts filed without error

  • Contracts/employee

  • Contribution of IT inventory less than two years old to quality goal

  • Corporate performance/quality goal

  • Corporate quality performance, e.g. ISO 9000

  • Cost of administrative error/management revenues

  • Cost of IT inventory less than two years old/increase in profits

  • Cost of IT inventory less than two years old/increase in revenues

  • Discontinued IT inventory/IT inventory

  • Employees working at home/total employees

  • Function points/employee month

  • IT capacity (Central Processing Unit and Direct-Access Storage Device)

  • IT capacity/employee

  • IT expense/administrative expense

  • IT expense/employee

  • IT performance per employee

  • Network capability/employee

  • Orphan IT inventory/IT inventory

  • PCs and laptops/employee

  • Processing time, out payments

  • Replacement cost of IT inventory (including incompatible software) discontinued by manufacturers

  • Total yield compared with index

  • Value of IT inventory discontinued by manufacturers

Renewal and Development Focus

  • Average age of company patents

  • Average contacts by customer/year

  • Average customer age; education; income

  • Average customer duration with company in months

  • Average customer purchases/year

  • Business development expense/administrative expense

  • Capacity of EDI systems

  • Capacity upgrades

  • Common training programs of company and partners

  • Company historic rate of new products reaching market

  • Company products (or components) designed by partners

  • Competence development expense/employee

  • Contribution of corporate communications network to corporate revenues

  • Contribution of engineering design system to corporate revenues

  • Contribution of MIS to corporate revenues

  • Contribution of process control system to corporate revenues

  • Customer opportunity base captured

  • Direct communications to customer/year

  • Educational investment/customer

  • Investment in competitive intelligence programs

  • Investment in new customer service/support/training programs

  • Investment in new product support and training

  • Investment in strategic partner development

  • IT development expense/IT expense

  • IT expenses on training/IT expense

  • Marketing expense/product line

  • New markets development investments

  • New products currently in development

  • Non-product-related expense/customer/year

  • Number of company patents

  • Opportunity share

  • Patents pending/software/data/databases developed

  • Percentage of customer training, service and support provided by partners

  • R&D expense/administrative expense

  • R&D invested in applications

  • R&D invested in basic research

  • R&D invested in product design

  • R&D resources/total resources

  • Ratio of new products (less than two years) to full company product family

  • Relationship investment/customer

  • Satisfied employee index

  • Share of ‘method and technology’ hours (%)

  • Share of development hours

  • Share of employees under age 40

  • Share of training hours

  • Structural capital development investment

  • Training expense/administrative expense

  • Training expense/employee

  • Upgrade of Electronic Data Interchange systems

  • Value of company’s engineering design system

  • Value of company’s management information system

  • Value of corporate communications network

  • Value of corporate sales engineering system

  • Value of EDI systems

  • Value of Process control system

Human Focus

  • Annual turnover of full-time permanent employees

  • Assigned to full-time employees who spend less than 50 percent of work hours at a corporate facility

  • Assigned to part-time employees and non-full-time contractors

  • Average age of full-time permanent employees

  • Average years of service with company

  • Average years with company of full-time permanent employees

  • Company managers with advanced degrees: Business, science, engineering, liberal arts, etc.

  • Employee turnover

  • Empowerment index

  • Full-time or permanent employees who spend 50 percent of work hours at a corporate facility

  • IT literacy of staff

  • Leadership index

  • Managers assigned to full-time permanent employees

  • Motivation index

  • Number of employees/employee shares of the company (percent shares owned by employees, program for employees to buy company shares, etc.)

  • Number of female managers

  • Number of full-time permanent employees

  • Number of full-time temporary employees, average years with company of full-time temporary employees

  • Number of managers

  • Number of part-time employees or non-full-time contractors, average duration of contract

  • Per capita annual cost of training, communication, and support programs for full-time permanent employees

  • Per capita annual cost of training, communication, and support programs for full-time temporary employees

  • Per capita annual cost of training, communication, and support programs for part-time employees and non-full-time contractors

  • Percentage of company managers of different nationality than the company registry

  • Time in training (Days/Year)

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Ragab, M.A.F., Arisha, A. (2018). Knowledge Measurement: From Intellectual Capital Valuation to Individual Knowledge Assessment. In: Syed, J., Murray, P., Hislop, D., Mouzughi, Y. (eds) The Palgrave Handbook of Knowledge Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-71434-9_9

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