9 / 75
8
TOWARDS AMETA THEORY OFACCOUNTING FOR KNOWLEDGE MANAGEMENT: REVIEW THE
REALITIES TO STAGE THE CRITICAL THINKING OF KNOWLEDGE BUSINESS MODEL
SBE, Vol.20, No.1, 2017
ISSN 1818-1228
©Copyright 2017/College of Business and Economics,
Qatar University
success. These new rules have entailed
businesses to fundamentally rethink their past
assumptions about management. Stewart 2007
argues that to understand the unique rules of
knowledge economy especially how to create
value, it is essential to identify the role of three
assumptions. The first is knowledge and its
management as the most important engine of
production. The second is knowledge capital
as a key pillar of the organizational capitals.
The third is how to adopt new knowledge
technologies, business practices, management
techniques and strategies. Gorey
et al
., 1996
proclaimed that there are four organizational
enablers facilitate the management of the
organizational knowledge. These enablers
are leadership, culture, technology, and
measurement (See Figure-1). The accounting
measurement
is the process that
includes
not only how the organization quantifies its
knowledge capital, but also how resources
are allocated to fuel its growth. Further, it’s
the connection process where accounting
match knowledge management. This unique
relationship has been depicted in Figure-1
below. Knowledge management has improved
profitability by raising productivity and
streamlining, downsizing, outsourcing, andout-
competing the competition (Kurzynski, 2009).
Changing profit patterns and mechanisms has
been considered one of the most fundamental
changes due to the new practices of knowledge
management. These practices are the engine
to translating creative thinking, new ideas,
and innovation into valuable products and
services to guarantee business survive. Value
is the product of knowledge and companies
cannot generate profits without these ideas,
skills, and talent of people. The literatures
especially knowledge oriented contextualize
much of those knowledge strategies, models,
and knowledge-profit relationship (Nonaka
and Takeuchi, 1995; Kaplan and Norton,
1996; Edvinsson and Malone, 1997; Anderson,
2000; Prusak, 2001; Stewart, 2001; Amidon,
2003; Omotayo, 2015). However, beside it is
concentrated on intangibles; the knowledge
management is just as much about people,
organizational processes, and information
technology. It’s more concerned with the
flows of knowledge that take place as part
of organizational processes rather than the
stocks of knowledge presented in financial
reports (Edwards
et al
., 2004). For example,
Nonaka and Takeuchi (1995), link knowledge
management to the organizational success, and
then making profit. They claim that knowledge
companies are profitable because of their
skills and expertise about how to translate
the organizational knowledge into products
and services. This dynamic represents the
virtuous cycle of competition, invention,
innovation, productivity, and growth.
Further, such dynamic cycle combines three
streams: value stream, revenue stream and
the logistical stream. These streams entail that
the knowledge business model has to address:
investment and how it is funded, the ongoing
costs, and the revenue and how it generated
(Mohammad, 2013a). This conceals the fact
that the organizational processes of knowledge
management which center the knowledge
business model have two and only two goals:
to innovate and to market. All of their other
processes are cost. Thus, any knowledge
company to properly function in the knowledge
era, it needs knowledge management
Figure-1: Knowledge Management Arena
(Royalty Image)