A framework for evaluating economics of knowledge management systems

Organizations are implementing knowledge management (KM) systems with the assumption that the result will be an increase in organizational effectiveness, efficiency, and competitiveness. Implementing KM systems, however, may be a problem to organizations: too much or too little effort might lead to unwanted outcomes. This paper shows how the introduction of KM systems, which lead to knowledge-sharing, has a negative as well as a positive effect. Important variables from economic perspectives are identified and presented as an integrated framework to illustrate their interrelationships. This paper also explains the implications of an integrated framework for knowledge flow in organizations.