Monday, May 5, 2014

Knowledge Management vs Intellectual Capital

In my previous post I described the relationships between knowledge management (KM) and intellectual capital (IC). After re-reading this post I realized some additional insight is needed to better understand these relationships.

First of all, defining knowledge management. Knowledge management can be considered as a system of processes, people, and technology working together to increase the organization's performance through learning (Seleim & Khalil, 2011). This KM system, as Liebowitz (2012) argued, is consists of 80% people and processes while the remaining 20% is the enabling technology. This means these systems are predominantly determined by the organization's ability to engage people and apply the right supporting processes to manage knowledge.

Intellectual capital is considered the next step in knowledge management. IC is the organizational value added when the organization's knowledge assets are leveraged. It is considered the stock of the available knowledge assets (Seleim & Khalil, 2011). Intellectual capital includes human capital, organizational capital, and the relational capital.

If we look at the intersection of KM and IC using the diagram I developed we can say that knowledge is generated, managed, and applied through the KM processes. The available and actionable knowledge is then leveraged as IC to create new value and this IC potentially (if applied correctly) leads to increased performance for the organization.

References

Liebowitz, J. (2012). Beyond knowledge management: What every leader should know. Boca Raton, FL: CRC Press.

Seleim, A., & Khalil, O. (2011). Understanding the knowledge management-intellectual captial relationship: A two-way analysis. Journal of Intellectual Capital, 12(4), 286-614.

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