management for ﬁnancial
The case of an East Asian conglomerate
Ravi S. Sharma
Wee Kim Wee School of Communication & Information, Nanyang
Technological University, Singapore
Priscilla Teng Yu Hui
Ministry of Education, Raglan Grove, Singapore, and
National Trades Union Congress, Jalan Bukit Merah, Singapore
Purpose – This paper aims to study the economic signiﬁcance of using a blended business and
knowledge strategy through the lens of conventional ﬁnancial management before and after the
implementation of KM initiatives in a knowledge-intensive, high-growth ﬁrm that had gone through
business diversiﬁcation through organic developments as well as mergers and acquisitions for over a
Design/methodology/approach – The economic value added (EVA) method is proposed as a
measure of the effective usage of capital funding in the ﬁrm before and after its KM program. The
extent of the economic impact due to the contributions of various KM strategies was analyzed using
standard ﬁnancial management reporting. This enabled the derivation of follow-on KM initiatives that
were consistent with the target objectives.
Findings – The EVA method was found to be valid and credible in determining the net impact of
various KM initiatives. This was in a form that was comprehensible to top management and KM
Research limitations/implications – Knowledge management as a strategic imperative has
gained signiﬁcance over the past decade for its ability to handle the complexity of information to
further create, transfer and reuse intellectual capital. More importantly, KM is seen as the key business
enabler across different enterprises for its ability to enhance competitiveness and shareholder value.
The EVA method used in this paper has allowed the valuation of KM initiatives.
Practical implications – The emergence of KM as a blended business strategy has hence proved to
be vital for the sustainability of the knowledge-driven business model that looks beyond the physical
and ﬁnancial into intellectual and social capital.
Originality/value – The paper presents a longitudinal case study of a fairly large East Asian
Keywords Knowledge management, Intellectual capital, Financial management, Economic value added
Paper type Research paper
The current issue and full text archive of this journal is available at
This work is reported as part of the ongoing efforts of the Knowledge Management Program at
NTU. The authors would like to thank their industry collaborators – who must remain
anonymous for reasons of conﬁdentiality – for giving them this opportunity to conduct the joint
research. Many thanks are also due to their colleagues Margaret Tan and Miguel
Morales-Arroyo for their collegiate contributions.
VINE: The journal of information and
knowledge management systems
Vol. 37 No. 4, 2007
q Emerald Group Publishing Limited