Relationship between Knowledge Management and Intellectual Capital

Last year I developed a new graduate course designed to cover topics in knowledge management (KM) and business intelligence (BI). Understanding that these two topics are related I included both topics in the same course and named the course Optimizing Intellectual Capital. My reasoning for using the intellectual capital (IC) term in the course name was that BI is a component of KM and KM is related to IC. Using these relationships we can consider a study of intellectual capital to include topics in knowledge management and business intelligence. Earlier this year, while teaching the course, I prepared an ontology diagram depicting these relationships.

In order to better understand how KM and IC are related I found an article explaining this relationship. The authors segmented KM into Knowledge Acquisition, Knowledge Creation, Knowledge Documentation, Knowledge Transfer, and Knowledge Application. The authors also categorized IC into three dimensions of Human Capital, Organizational (structural) Capital, and Relational Capital. Based on this breakdown the authors studied the relationships of the KM processes and IC dimensions.

The authors found that many of the KM processes positively influence development of IC and that each of the dimensions of IC contribute to improvements to certain KM processes. This research shows definitive relationships between KM and IC and not only does KM promote improved IC but also effective IC also promotes improved KM.

Given the complex set of components to this relationship I thought it would be better to view the results through a diagram. Below is my conceptualization on the relationships between KM and IC.

Based on the findings it is clear that each of the processes in the KM iterative cycle contribute to developing some form of IC. Additionally, IC dimensions contribute in developing some of the KM processes but do not promote improving knowledge creation and knowledge application.

References

Herschel, R.T., & Jones, N.E. (2005). Knowledge management and business intelligence: The importance of integration. Journal of Knowledge Management, 9(4), 45-55.

Seleim, A., & Khalil, O. (2011). Understanding the knowledge management-intellectual capital relationship: A two-way analysis. Journal of Intellectual Capital, 12(4), 586-614.