Linking knowledge management practices to organizational performance using the balanced scorecard approach

Abstract

PurposeThe purpose of this study is to develop a decomposed model to inspect the effect of knowledge management practices (knowledge sharing culture [KSC], knowledge-based human resource management [KHRM], strategy and leadership [S&L], information and communication technology [ICT] on organizational performance [OP]) by using the four balanced scorecard outcomes (BSC) (learning and growth [L&G], internal process [IP] perspective, customer satisfaction [CS] perspective and financial performance [FP]).Design/methodology/approachThe research methodology included development of a research model based on comprehensive literature review followed by survey of knowledge-intensive organizations. A sample of 277 employees was obtained and structured equation modeling analysis using SPSS AMOS was conducted to test the proposed hypotheses.FindingsThe study shows that KSC and KHRM have a highly significant effect on all the four aspects of OP; S&L positively and significantly affects only L&G and IP but does not have any significant effect on the other two, i.e. CS and FP, while ICT practices did not affect any of the measures significantly.Research limitations/implicationsThe data are limited to 277 middle and senior level managers of Indian firms, which may be a limiting factor for generalizability.Originality/valueThe proposed model uncovers the dynamics of individual relationships between KM practices and measures of performance (proposed by BSC) in comparison to existing models which have mainly focused on the overall effect.