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13 - Measuring knowledge work
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- By Rob Austin, Associate Professor Harvard Business School, USA, Pat Larkey, Professor Carnegie Mellon University, USA
- Edited by Andy Neely, Cranfield University, UK
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- Book:
- Business Performance Measurement
- Published online:
- 22 September 2009
- Print publication:
- 13 December 2007, pp 279-303
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- Chapter
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Summary
Introduction
The explosive growth of the information-related and science-based sectors of industrialized economies has seen concomitant growth in the demand for products and services with potential to help organizations apply what they know more profitably. There are entirely new occupational categories – combinatorial chemist, network manager, software engineer, to name just a few – that produce economic value mostly by creating and manipulating symbols. Even in traditional occupations, ways of working have come to depend on intellectual activity more than physical activity. Factory workers invent and share process improvement ideas; salespeople develop novel ways to use the Web to reach or retain customers.
As the nature of work has changed, the relationship between an organization's measured resources and its market success has become tenuous. Factors that contribute substantially to a firm's market success largely elude traditional means of quantification. Unlike materials and equipment, core competencies comprised of the distinctive abilities of employees and teams are not easily captured on balance sheets. This fact not only makes valuation of individual firms harder, it also complicates traditional analyses for allocating resources, improving processes, and compensating employees.
Existing notions of performance measurement and organizational control meet with substantial challenges in knowledge work settings. In this chapter, we identify distinctive characteristics of “knowledge work” that impact our ability to measure it, and briefly discuss the research challenges and practical implications associated with those characteristics. Conceptually, these characteristics can be placed in three categories.
First, knowledge work is less observable than physical work.
20 - The future of performance measurement: Measuring knowledge work
- from Part VI - Performance measurement – emerging issues and trends
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- By Rob Austin, Pat Larkey
- Edited by Andy Neely, Cranfield University, UK
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- Book:
- Business Performance Measurement
- Published online:
- 06 July 2010
- Print publication:
- 07 March 2002, pp 321-342
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- Chapter
- Export citation
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Summary
Introduction
It has become widely accepted, as we approach the end of this century, that organizations’ abilities to create, retain, communicate, and use knowledge are critical to their success (Davenport and Prusak, 1998; Nonaka-Takeuchi, 1995). Management of knowledge has become a frequently acknowledged source of “core competencies” (Prahalad and Hamel, 1990), which themselves give rise to sustainable competitive advantages (Leonard and Barton, 1995). The explosive growth of information-related sectors of industrialized economies has seen concomitant growth in the demand for products and services with potential to help organizations apply what they know more profitably. That same rapid growth has created entirely new occupational categories – web designer, network manager, software engineer, to name just a few – which produce economic value mostly by creating and manipulating thoughts, ideas, and symbols. Even in traditional occupations, ways of working have come to depend on intellectual activity, perhaps more than on physical activity. Factory workers invent and share process improvement ideas; salespeople develop novel ways to use the web to reach or retain customers.
One consequence of this shift in the nature of work is that the relationship between an organization's measured resources and its market success has become more tenuous. Unlike materials or equipment, core competencies are not listed on balance sheets; neither are the distinctive abilities of employees and teams, which can be an obviously significant reason for a firm's success. In some sectors of the economy, factors that contribute substantially to a firm's market success largely elude traditional means of quantification. This fact not only makes valuation of individual firms harder, it also complicates traditional analyses aimed at figuring out where to allocate resources, how to improve processes, and whom to reward.