Can return on investment in knowledge management initiatives in organizations be measured?

Maayan Nakash, Dan Bouhnik

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Purpose: This paper focuses on the meanings attributed to the measurement of return on investment (ROI) in knowledge management (KM) initiatives in knowledge-intensive organizations. At the heart of this exploratory research is the introduction of a unique coherent perspective of discipline experts regarding the ROI metric, as part of their perception of assessing effectiveness in this field. Design/methodology/approach: The research begins with in-depth semi-structured personal interviews and continues with focus groups, as part of a qualitative research paradigm. The data were analyzed using a thematic analysis method, based on the grounded theory approach. Findings: The findings provide empirical evidence regarding the significant challenges associated with the objective assessment of KM performance, which is deeply rooted in numerical-financial values. Despite the high status of ROI in the business environment, the authors find that decision-makers surprisingly avoid evaluating ROI for the most important resource of the organization, notwithstanding the immeasurable hopes that depend on this performance measure and the expectation of establishing the profitability of investment in organizational KM. Originality/value: The uniqueness of this research is the adoption of the skeptical-critical research approach. For the first time, the authors interrogate the suitability and relevance of the general model of the ROI metric as a means of proving the value and contribution of well-managed knowledge to organizations. The authors call for adoption of a new integrative perspective for evaluating effectiveness, which will reflect the holistic set of KM in organizations.

Original languageEnglish
Pages (from-to)417-431
Number of pages15
JournalAslib Journal of Information Management
Volume74
Issue number3
DOIs
StatePublished - 16 May 2022

Bibliographical note

Publisher Copyright:
© 2021, Emerald Publishing Limited.

Keywords

  • Business performance
  • Investment appraisal
  • Knowledge management
  • Knowledge management measurement
  • ROI
  • Return on investment

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