KNOWLEDGE ASSET MANAGEMENT: KNOWLEDGE ASSETS AND THEIR
INFLUENCE ON THE DEVELOPMENT OF ORGANIZATIONAL STRATEGIES
Knowledge assets represent the fount of an organization’s competences and capabilities that are deemed
essential for its growth, competitive advantage and human development. The aim of this research is to define,
within the context of Turkish firms in the both the manufacturing and services industries, what constitutes a
knowledge asset, and to identify any link between strategic management and knowledge management. To
achieve this, a survey was conducted by the questionnaire of Paul James (2005). The questionnaire consisted of a
total number of 37 items. The first 31 items were used to reveal what the knowledge assets are and which
knowledge assets were perceived as the most important by the firms. And the last 6 questions were used to
explore the knowledge asset influence on the development of an organization’s strategy. Since data collection
process is still continuing, no research finding at this stage of the study is reported.
BİLGİ VARLIKLARI YÖNETİMİ: BİLGİ VARLIKLARI VE ÖRGÜTSEL
STRATEJİ GELİŞTİRMEYE ETKİLERİ
Bilgi varlıkları organizasyonlar için büyüme, rekabet avantajı ve insan kaynakları gelişimini destekleyen önemli
bir kaynak ve yeteneği temsil etmektedir. Bu araştırmanın amacı, üretim ve hizmet sektörlerinde faaliyet
gösteren Türk işletmelerinde bilgi varlığı kavramından ne anlaşıldığı, hangilerinin işletmeler açısından önemli
olarak algılandığı, bilgi varlıklarının stratejik yönetim çalışmalarında yer alıp almadığı ve eğer yer alıyor ise
hangi amaçla kullanıldığının belirlenmesidir. Araştırmanın amacına yönelik olarak, Paul James (2005) tarafından
senesinde geliştirilen bilgi varlıkları ölçeği kullanılarak bir anket çalışması gerçekleştirilmektedir. Toplam 37
sorudan oluşan anketin ilk 31 sorusu işletmeler tarafından bilgi varlıklarından ne anlaşıldığı ve hangilerinin
önemli olarak algılandığını ortaya koymayı amaçlamakta iken, kalan 6 soru vasıtası ile işletmelerin strateji
geliştirme esnasında bilgi varlıklarından nasıl yararlandıkları belirlenmeye çalışılacaktır. Veri toplama aşaması
halen devam etmekte olduğundan, araştırma sonuçlarına ait bu aşamada herhangi bir bulgu verilememektedir.
Since around 1960’s, just after Drucker used the terms “knowledge work” and “knowledge
worker”, there has been a growing interest in the knowledge and its management which have
been gaining momentum (Wiig, 1997). Although the interest was initially focused on
information technology, more recently the nature of the issue has shifted to knowledge
management that included some other aspects of social sciences such as the human,
sociology, communications, learning, business and strategy (Leonard-Barton 1998; Stephens,
Asst. Prof. Dr., Yeditepe University, firstname.lastname@example.org
Asst. Prof. Dr., Yeditepe University, email@example.com
Asst. Prof. Dr., Beykoz Logistics School of Higher Education, firstname.lastname@example.org
2001). According to Dilnutt (2000), “knowledge management brings together the concepts of
knowledge work and strategic management, in order to manage the required resources and
capabilities through the facilitation of knowledge development, creation, representation,
access and transfer”. Many researchers (e.g., Nonaka, 1991; Drucker, 1993; 1995; Michalisin,
Smith & Kline, 1997; Leonard-Barton, 1998; Pemberton, Stonehouse, & Yarrow 2001;
Davenport & Prusak, 2000; Hamel, 2002), suggest that “knowledge is the cornerstone of
competitive advantage”. Knowledge is a key resource in a rapidly changing global market
where the development of innovative services, products and solutions is required to attract
and retain customers and get ahead of the competition (Spender, 1996). For this reason,
knowledge management as an emerging discipline is becoming increasingly important to
organizations seeking to improve their efficiency and competitive abilities (Davenport &
Prusak, 2000; Rowley, 1999).
For a more effective and efficient knowledge management, the sub-components of knowledge
management or “the knowledge assets” have to be understood thoroughly. Although
discussions about knowledge management and intellectual capital often use the term
“knowledge assets”, the review of the literature on these topics has failed to find an agreed
definition. The aim of this research is to define, within the context of Turkish companies,
what constitutes a knowledge asset and which are the most important, and to identify how
knowledge assets influence the organizational strategies.
2. Knowledge Based View (KBV)
Knowledge Based View (KBV) of the organization has its basis on Resource Based View
(RBV) because knowledge assets are defined as unique, valuable and inimitable resources that
affect profitability and performance (Taylor, 1997).
Resource Based View, defined in Wernerfelt's, (1984) study, and evolved through the 1990s,
suggests that firms should endeavor to develop their own idiosyncratic resources and
capabilities and by these means formulate their strategies (Aaker, 1989; Barney, 1991;
Javidan, 1998). This view focuses on firm specific resources, which include assets,
capabilities, organizational processes, attributes, information and knowledge (Barney 1991:
101). In the literature various definitions and classifications of a firm’s resources are given.
For example, April (2002) classifies assets as tangible and intangible assets, whereas Grant
(1991) classifies them as resources and capabilities and Hamel (2002) makes a distinction
between core competencies, strategic assets and core processes. In short it can be said that any
kind of asset that the company can exploit to gain competitive advantage is a resource. This
view has been extended to a more specific view of the firm, knowledge based view, which
focuses on intangible assets such as company specific knowledge and the ability to combine
and create knowledge (Nonaka & Takeuchi 1995; Grant 1996).
Theorists, supporting both the Resource Based View (RBV) and Knowledge Based View
(KBV), perceive organizations as a body of knowledge (Spender, 1996). Knowledge-based
view considers a firm as a heterogeneous knowledge production entity and stresses that
knowledge, especially tacit knowledge, is the very source of sustainable competitive
advantage (Foss, 1996; Barney & Wright, 1998; Dehning & Stratopoulos, 2003).
Accordingly, proponents of this view stress the importance of developing knowledge creation
and transformation models. They also claim that management systems, operational processes,
corporate culture, and resource management are the fundamental sources of competitive
advantage (Flamholtz & Hua, 2003).
Prior to further discussion of KBV and knowledge assets it is deemed to be useful to clarify
what knowledge is. Smith, Collins, & Clark (2005), after drawing attention to the fact that
organizational knowledge is a fuzzy concept which has been described in a number of ways
(Huber, 1991; Nonaka & Takeuchi, 1995), defined organizational knowledge as the validated
understanding and beliefs in a firm about the relationship between the firm and its
environment. Keskin (2005) defines knowledge as an organized combination of data,
integrated with a set of rules, procedures, and operations that have developed through
experience and practice. Walczak (2005) provided a similar concept to this definition, but
considers an additional issue; high quality decision making. Additionally, Walczak (2005)
defines knowledge as any data, skill, context, or information that enables high quality
decision making and problem solving to take place.
Most writers distinguish between explicit and tacit knowledge (Nonaka, 1991; Polanyi, 1996).
Nonaka (1991, 1994) defines explicit knowledge as the knowledge which has been codified
and expressed in formal language. Whereas tacit knowledge is harder to express, represent
and communicate, explicit knowledge can be easily gathered, stored, and disseminated. Tacit
knowledge is intuitive, unarticulated and cannot be verbalized. This dimension of knowledge
highly involves people because it is mostly developed by the people in the organization and
stored in them (Li & Tsai, 2009). According to Nonaka, Toyama, & Konno (2000),
knowledge is created in social interactions amongst individuals and organizations, contingent
upon a particular time and space, and it is related to human action. Thereby, it is dynamic,
context-specific, and humanistic. They additionally claim that knowledge is deeply rooted in
individuals’ value systems as it has the active and subjective nature represented by such terms
as “commitment” and “belief”. Nonaka et al. (2000) suggest that information becomes
knowledge when it is contextualized and interpreted in accordance with beliefs and
commitments of individuals.
Knowledge and the capability of creating and utilizing knowledge are considered to be the
most important source of a firm’s sustainable competitive advantage (Nonaka et al., 2000).
Nonaka et al. (2000) claimed that knowledge is created through the interaction and
intersection between tacit and implicit knowledge. The knowledge conversion process
(interaction between the two types of knowledge) results in qualitatively and quantitatively
expanded knowledge. This process has three modes: Socialization, Externalization,
Combination, and Internalization (SECI). Nonaka et al. (2000: 8) have further developed this
view and suggested a model of knowledge creation which consists of three elements; “(i) the
SECI process, the process of knowledge creation through conversion between tacit and
explicit knowledge, (ii) ba, the shared context for knowledge creation, and (iii) knowledge
assets, the inputs, outputs, and moderator of the knowledge-creating process”. Nonaka et al.
(2000) also distinguish knowledge assets as the inputs, outputs and moderating factors of the
3. Knowledge Assets
Nonaka et al. (2000: 20) regard the knowledge assets as the basis of knowledge-creating
process and define them as “firm-specific resources that are indispensable to create values for
the firm”. There are various other definitions of knowledge assets and among them Boisot
(1999: 3) defined the knowledge assets as, “stocks of knowledge from which services are
expected to flow for a period of time that may be hard to specify in advance, with an
economic life viable within industry and market context”. However, as Nonaka et al.’s (2000)
definition is the most comprehensive one, it will be considered as the basis of discussions in
In the literature a variety of assets are specified as knowledge assets. Among them are a firm’s
controlled skills, competences, and capabilities and the way that they are used to create output
(Reed & DeFillippi, 1990); facts, assumptions, and heuristics of economic value (Wilkins
1997); patents, copyrights, databases, employees’ brains, processes, and information in
information systems (Housel & Bell, 2001); adaptations and interpretations of information,
expertise, experiences, errors and other inferences (Debowski, 2006). As many other assets
could also be listed, it is clear that they have to be categorized. Nonaka et al. (2000)
developed a taxonomy of knowledge assets which comprised four types: experiential,
conceptual, systemic, and routine knowledge assets.
Experiential knowledge assets- are the ones that are gained through mutual hands-on
experience of the members of the organization, and between the members of the organization
and its stakeholders. Skills, know-how, care, love, trust, facial expressions and gestures are
among the examples of experiential knowledge assets. As can be inferred from the above
given examples, these assets are tacit, and it is difficult to be aware of them. However they are
very valuable because they are firm specific and inimitable (Nonaka et al., 2000).
Routine knowledge assets- are another type of tacit assets that have become routine and
reflected in the actions and practices of the organization. Know-how, culture and the way of
performing the day-to-day business are considered as routine assets. They can be gained
through stories and myths about the company and they are very practical.
Conceptual knowledge assets- are more explicit in nature and they are transmitted through
images, symbols and language. They are based on the perceptions customers and members.
Examples include brand equity, concepts, and designs. Although they have tangible forms and
it is easier to grasp than experiential knowledge assets, it is hard to understand what members
and other’s perceptions are.
Systemic knowledge assets- are another type of explicit knowledge which is systemized and
arranged. They include clearly stated technologies, product specifications, manuals, and
documentations. Contrary to experiential knowledge assets, systemic knowledge assets are the
most tangible ones and thus they can be transferred relatively easily.
4. Identifying and Managing Knowledge Assets
In order to make use of knowledge assets and to manage knowledge creation and exploitation
effectively organizations must be able to identify and quantify these resources. Hence, a
company has to map its stocks of knowledge assets while keeping in mind that they are
dynamic, and new knowledge assets can be created from existing ones (Nonaka et al., 2000).
The importance of knowledge assets depends on the goals, objectives and the strategy of the
specific organization. A very important knowledge asset of one company may be useless for
another one. Therefore, the knowledge assets should be analyzed at the basis the company’s
goals and objectives. For this purpose, Carlucci & Schiuma (2006) have proposed a
knowledge assets value spiral that aims to answer the question of identifying and improving
knowledge assets. In their framework, knowledge assets are defined on the basis of their
contribution to the organizational performance.
The Knowledge Asset Value Spiral has four main phases: definition of key company’s
performance targets, analysis of knowledge asset value drivers, definition of knowledge asset
management process, and assessment of performance improvements (Carlucci & Schiuma,
Definition of key company’s performance targets- First of all, the fundamental issues for
company’s value creation and the key persons whose achievement is related to management
of organizational knowledge assets should be revealed. The aim is to align knowledge
management initiatives with the company’s strategy (Carlucci & Schiuma, 2006).
Analysis of knowledge asset value drivers- A visual framework that portrays and valuates the
links between organizational performance and knowledge assets has been proposed
(Knowledge Asset Value Creation Map). To map knowledge assets, first, knowledge assets
that influence achievement of the objectives are determined. Carlucci & Schiuma, (2006)
proposed building a “matrix of direct dependencies”, in which the company’s knowledge
assets are listed and the performance objectives are listed in rows and columns respectively.
Afterwards, managers have to decide whether the knowledge asset is important or not for the
achievement of each objective. The proposed map not only shows the links between
knowledge assets and objectives but also shows knowledge the interaction between the assets
for value creation. Upon drawing this map, managers can clearly see the contribution of
knowledge assets to company’s performance. Thus, they can concentrate on the most
important knowledge assets that can be considered the key knowledge asset value drivers
(Carlucci & Schiuma, 2006).
Definition of knowledge asset management process- After analyzing value asset drivers the
managers should figure out the appropriate knowledge processes that would facilitate
improving and maintaining key knowledge asset value drivers (Carlucci & Schiuma, 2006).
Assessment of performance improvements- In this phase the success of knowledge
management practices is evaluated. The managers determine the effect of knowledge assets
on the performance of the organization. By this way both the effectiveness of existing
strategies are analyzed and investments into certain key knowledge asset value drivers are
justified. In case assumptions were spotted to be wrong, new knowledge asset drivers should
be identified (Carlucci & Schiuma, 2006).
Another framework is provided by Li & Tsai (2009) that has two features, the impact of
knowledge assets on sustainable competitive advantage and their impact on appropriability.
Appropriability is defined as quality of being imitable or reproducible. The skills, abilities or
knowledge that is deeply embedded in a particular organizational culture and that cannot be
extracted and re-established elsewhere have weak appropriability. To find out whether a
knowledge asset has an impact on sustainable competitive advantage the following questions
Is the knowledge asset valuable?
Is the knowledge asset rare?
Is the knowledge asset easily imitated by competitors?
Can the knowledge asset be easily substituted? (Li & Tsai 2009: 290)
The writers have stated patents, formulas, manufacturing skills, styles of products,
products/services expertise, organizational culture, technological capabilities, management
systems, close and long-term relationships with strategic partners, reputation as assets having
a strong effect on sustainable competitive advantage. Appropriability can be determined by
the answers of the following questions (Li & Tsai 2009: 290):
Can the knowledge asset be effectively protected from imitation?
Can the knowledge asset by its nature be easily imitated or even improved?
Are there abundant complementary assets relevant to the knowledge asset, which can be
controlled by a firm?
Examples of knowledge assets that have greater impact are, “patents, unique manufacturing
processes, crucial formulae, and employees’ expertise, which can produce high added value,
in-house-developed skills and facilities, primary processes, excellent manufacturing systems,
closer relationships than competitors with pivot customers and suppliers” (Li & Tsai 2009:
The literature review indicated that there has been limited research into what constitutes a
knowledge asset, and into what the complete life cycle of a knowledge asset may be. This is
particularly true in the Turkish business context where there has been little research into
Knowledge Management itself. Hence, the nature of the research is exploratory and theory-
The study focuses on a broad set of Turkish firms in the both the manufacturing and services
industries. A total of 1000 firms, namely, the first 500 and the second 500 largest firms
announced by Istanbul Chamber of Industry annually will constitute the research sample.
Survey method was used to collect data. A questionnaire developed by Paul James (2005) was
used for data collection purpose and the questionnaire consisted of a total number of 37 items.
The first 31 items were used to reveal “what the knowledge assets are” and “which knowledge
assets were perceived as the most important” by the firms. And the last 6 questions were used
“to explore the knowledge asset influence on the development of an organization’s strategy”.
Namely the research aimed to find the answers of three questions:
Q. 1 – What are knowledge assets?
Q. 2 – Which are the most important knowledge assets?
Q.3 – How do existing knowledge assets influence the development of an organization’s
Since data collection process is still continuing, no research finding at this stage of the study
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