The balanced scorecard - A tool for managing knowledge?

Abstract

Traditionally, managerial control has been based on financial measures such as earning capacity. Today, new forms of managerial control are required, since the companies' most valuable resources are not the same as they used to be. Intangible assets that are essential to long-term success, such as employee knowledge, are now considered to be just as important as the financial capital. This thesis focuses two concepts that we believe have, and further will, add insights of how to manage a company today: the Balanced Scorecard and knowledge management. The Balanced Scorecard provides a new way to manage more of a company's resources than just the financial, by offering a widened scope for essential management activities and processes for future competitiveness. The knowledge management concept aims at increasing the effectiveness of a company's internal processes, and provides insight of how to manage intangible resources and personnel, which is an important part when developing a company's competitive strengths. The main purpose of this thesis has been to explore whether the Balanced Scorecard is a proper tool for managing knowledge in an organisation. The results Tom our study show that the answer to our research question must be twofold. The knowledge management concept is extensive and cannot, as a whole, be incorporated in a single management control tool like the Balanced Scorecard. Still it is useful for putting knowledge into focus in an organisation and showing that knowledge management a strategic issue. Our research also indicates that all hinds of companies, in different businesses, seem to need a tool for managing knowledge. How the knowledge management issues are to be implemented in the Balanced Scorecard, and which measures that should be used, has to be individual to each company.