Exploring the Correlation Between Knowledge Management Maturity and Intellectual Capital Efficiency in Mainland Chinese Listed Companies

Abstract

In today's knowledge-based society, discussion on intellectual capital (IC) has become intertwined with knowledge management (KM). KM may be viewed as the activities and processes to create and maximise IC. It may be possible to suggest that an organisation's level of knowledge utilisation is associated with its level of intellectual capital. The purpose of this research was to explore whether there is an association between KM maturity level, as a proxy of assessing the level of KM efficacy and IC utilisation efficiency in companies listed on CSI 100 (China Securities Index Co., Ltd.) in mainland China. A self-assessment of KM maturity level, developed based on the KM self-assessment framework proposed by Collison and Parcell, was used to gauge the knowledge utilisation of an organisation. The intellectual capital efficiency coefficient (ICE), component of the Value Added Intellectual Coefficient (VAIC™), was used to assess the efficiency of intellectual capital. Overall, 26 questionnaires were collected from the surveyed organisations to evaluate their level of KM, which accounted for 25% of the sample. Finally, correlation analysis with SPSS was performed to examine if there was a correlation between ICE and the maturity level of KM in the sampled companies in mainland China. The results showed that the association between the two variables was not statistically significant. In fact, no conclusive evidence was found to support an association between efficiency of utilising intellectual capital, and KM maturity score. The lack of an association may suggest that there may be other intervening variables yet to be identified in the relationship between KM and IC. This study is an attempt to explore the above assertion and to conduct empirical studies in studying their applicability in China, one of the fastest growing economies in the world. While we are not seeking to generalise the results, it may serve as a good reference for further studies in examining the intricate "relationship" between IC and KM, that is, linking a process view of KM to the measurement of value creating intangibles of a corporation epitomised by IC.