Measures for organizations engaged in a knowledge economy

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Authors
Rodgers, Waymond
Housel, Thomas J.
Subjects
Advisors
Date of Issue
2009
Date
Publisher
Emerald
Language
Abstract
Purpose - The financial reporting practices of modern day organizations operating in a knowledge-based economy will eventually change as intangible assets increasingly become such organizations’ most valuable assets. Financial reports need to be supported by intangible performance metrics, in order to ensure that the reports are rigorously interpreted and applied, and if any issues or problematic practices exist, they may be identified and resolved in a timely fashion. This paper aims to focus on this issue. Design/methodology/approach - This paper provides support for the use of knowledge value-added (KVA) metrics to assist firms in better understanding, evaluating, and reporting intangible assets, and to provide them with more transparency in their operations. Currently, the general consensus seems to be that before any real progress can be made in converging intangible performance metrics with traditional financial reports, modern day organizations need to more actively depict their intangible assets. Findings - A case study demonstrated how KVA measures support financial ratios of a company as well as providing for a better comparison of one industry with another. Further, from this case study the KVA methodology provided an approach for objectively obtaining information about the performance of knowledge assets as well as a means of benchmarking organizations operating in a knowledge economy. Research limitations/implications - Future research should empirically test whether an organization’s performance and operations is better captured by the added value of intangible measures, such as KVA metrics. Originality/value - The paper shows that implementing intangible asset measures, along with traditional financial measures may provide a better overall platform that is understandable to managers, creditors, investors, and public institutions.
Type
Article
Description
The article of record as published may be found at http://dx.doi.org/10.1108/14691930910977770
Series/Report No
Department
Information Sciences (IS)
Organization
Naval Postgraduate School (U.S.)
Identifiers
NPS Report Number
Sponsors
Funder
Format
Citation
W. Rodgers, T.J. Housel, "Measures for organizations engaged in a knowledge economy," Journal of Intellectual Capital, v. 0, no.3 (2009), pp. 341-353.
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.