Benchmarking in the knowledge era

In today’s highly turbulent and dynamic business environment, knowledge is widely recognized as the only true and sustainable resource for competitiveness. Over the past decade, an increasing amount of contributions has been made to the management literature, both from academics and practitioners, stressing the relevance of knowledge as well as its management for organisational competitiveness; focusing the attention both on the assessment of knowledge assets and intellectual capital (see Haanes and Lowendhal, 1997; Marr and Schiuma, 2001; Roos et al., 1997) and their management (see Davenport and Prusak, 1998; Grant, 1991; Nonaka and Konno, 1998; Ruggles, 1998; Teece, 2000). Nowadays, it is accepted that knowledge is at the heart of organizational capabilities and the need for organizations to continuously generate and refresh their knowledge has never been greater. Leading organizations see themselves, and operate, as learning organisms able to continuously adapt to the competitive context and change their business processes looking for new and improved performance. They recognize that knowledge assets are key strategic resources while tangible assets are a value transient and generally do not play, specifically in the medium and long term, a pivotal role in achieving a strategic competitive advantage. Thus, in order to acquire and maintain competitive advantages organizations must explicitly manage their cognitive resources. They need to appreciate how they can identify and evaluate existing knowledge assets within the organization and how to manage these assets in order to achieve competitive advantage. In this context, we advocate that the assessment and the management of knowledge assets are two main building blocks of company’s performance management system. By knowledge assessment, organisations can identify and evaluate their knowledge assets which are at the basis of performance, and by knowledge management it is possible to define the managerial processes and projects which enable organisations to acquire, create, continually renew and effectively apply their knowledge assets in order to generate value. In order for this to work, it is prudent that organistions have a clear view of what benefits they could expect. This demands an understanding of the link between knowledge management and business performance. This understanding would support the validation of knowledge management investments and can contribute to explain what knowledge should be managed and developed within an organisation to achieve performance improvement. Upon analysing the current research (see Armistead, 1999; Chong et al., 2000; Firestone, 2001), it becomes evident that there is no straight-forward generic link between knowledge management and business performance, but rather a complex set of relationships which appear to be company specific. However an important feature emerging from the literature is the relevant role of the company’s strategy