A study on achieving corporations' business performance via implementation of knowledge management : a comparative study of most admired knowledge enterprise (MAKE) and non-MAKE companies

Abstract

Organisations believe that obtaining a knowledge management (KM) award does not only promote their brand but also enhance their business performance through the award application process. However, there is no definitive evidence that winning such an award would improve an organisation’s business performance. A growing number of companies put more emphasis on their intangible assets because they regard intellectual assets as a company’s core competency and the main source of competitive advantage (Martín-de-Castro, 2006). The purpose of the study was to explore whether companies that have received the Most Admired Knowledge Enterprise (MAKE) Award boasted a better business performance than those that did not win or participate in the award. By investigating the relationship between intellectual capital (IC) components and companies’ performance indicators and studying the eight criteria of the MAKE Award, this research study found that the relationship between companies’ IC and their performance indicators was not statistically significant, which was coherent with previous studies. Specifically, there was no statistically significance in IC value and business performance between the MAKE award winners and the non-MAKE companies. However, all of the neutral variable (CEE, HCE and SCE) were significantly associated with ATO for the MAKE group and ROE for the non-MAKE group. Since HCE and SCE are related to intangible assets which align with the MAKE award judging criteria, the qualitative findings fortified that some key elements retain corporate investment in people, process and technological tools. The invested resources were used to develop communities to identify, capture and share knowledge. Such knowledge sharing activities lead companies to becoming learning organizations supporting individual and team learning, and transforming process oriented operations to retain critical knowledge even when staff members leave the organization. The research was conducted by using a mixed methodology. A quantitative study was based on the MAKE award winners list of 2009; 59 MAKE award winners and their counterparts, which did not join or win the award, were determined. Then, financial data were collected from publicly available annual reports from the 2009-2016 period. Applying the value added intellectual coefficient™ (VAIC™) methodology, regression models were developed and created to examine the association and connections between companies’ IC and their performance indicators. A semistructured interview guide was also developed to interview senior representatives of six companies including from both the MAKE-winning and non-MAKE companies. These qualitative findings were analysed and consolidated with the results of the quantitative study. A significant limitation was that winning companies without outstanding performance results did not want to participate in this study because of their deep-rooted fears of losing face. By adopting the benchmarking approach of maintaining the companies' anonymity, six companies participated in the study. This research was also limited by its small sample size. A more in-depth information could be obtained by conducting focus groups and workshops with participants representative of the sample.