Visualizing intellectual capital using service-dominant logic

2017 ◽  
Vol 29 (6) ◽  
pp. 1745-1768 ◽  
Author(s):  
Janet Davey ◽  
Rachael Alsemgeest ◽  
Samuel O’Reilly-Schwass ◽  
Howard Davey ◽  
Mary FitzPatrick
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Value Creation ◽  
Hotel Industry ◽  
Annual Reports ◽  
Future Research ◽  
Research Approach ◽  
Content Type ◽  
Reporting Practices ◽  
Operant Resources

Purpose The purpose of this paper is to investigate intellectual capital (IC) reporting, from a service-centric approach, in the hotel industry. The strategic enhancement of value-creation and sustainable competitive advantage requires both management and measurement. Sound measurement and reporting practices enable management performance to be judged; one such practice is IC disclosure. Service-dominant (S-D) logic emphasizes that intangible operant resources, the foundation of IC, are at the core of competitive advantage. Design/methodology/approach A disclosure instrument based on S-D logic and designed specifically for the hotel industry was applied to the annual reports and sustainability reports (in English) of 30 Asian hotel companies. Content analysis measured the disclosures of dynamic IC assets typically overlooked by traditional IC disclosure instruments. Findings The majority of IC communication concerns lower-order basic operant resources. Although more than one-third of the companies’ disclosures of IC assets relate to collaborative processes and practices that support networked value-creation, most disclosures demonstrate a prevailing firm-centric orientation. IC items regarding reciprocated relationship and informational management were minimally reported. Research limitations/implications A single research approach was used. Future research could use other communication channels to triangulate. Practical implications The results highlight opportunities for hotel companies to better report their IC assets as part of their value-creating strategies. Originality/value This research is one of the first to operationalize S-D logic concerning IC. It provides a promising framework for understanding IC reporting in the hotel industry.

scholarly journals Intellectual capital reporting, leadership and strategic change

2016 ◽  
Vol 17 (1) ◽  
pp. 61-83 ◽  
Author(s):  
Richard Slack ◽  
Matthias Munz
Keyword(s):  
Intellectual Capital ◽  
Value Creation ◽  
Corporate Strategy ◽  
Annual Report ◽  
Strategic Change ◽  
Annual Reports ◽  
Future Research ◽  
Integrated Reporting ◽  
Leadership Change ◽  
Content Type

Purpose – A change in leadership can signal a shift in corporate strategy to drive future value creation. To help achieve this, a different emphasis may be placed upon the intellectual capital (IC) resources within the organisation. The purpose of this paper is to examine the changes in volume, composition and emphasis of IC disclosure in annual reports mapped against the re-orientation of corporate strategy and associated leadership change. Design/methodology/approach – A longitudinal period of over three decades (1979-2010) is examined. Adopting a case-based approach, Daimler AG is purposively selected for this research having a number of distinct changes in strategy over the period, reflective of leadership change. Using content analysis, annual report IC-related disclosures (structural, relational and human capital) by Daimler AG are examined, by category and more detailed sub-categories, against corporate strategy. Findings – The composition and emphasis of IC disclosures found in the annual reports changes over the longitudinal period and is reflective of the prevailing corporate strategy at that time. There were four identified periods of strategy, each associated with leadership change. The prevalence and qualitative focus of IC disclosures relevant to each period reflects the importance of respective IC components in corporate value creation. Research limitations/implications – The research is based on annual report IC disclosures within one case company and hence reflect the messages conveyed by that company over the longitudinal period. Additionally, the authors recognise that the annual report is only one source of corporate information, but as a historic record it serves to consistently capture management disclosure over a long-time period. Future research, adopting an econometric approach, could further test the linkages between leadership change, strategic shift and IC-related disclosure. Practical implications – The research reveals how IC-related disclosure shifts to reflect leadership and strategic change within a case company. Through such disclosure, the authors are able to gain greater insight into how a specific business seeks to create value drawing on the components of IC underpinning corporate strategy. Originality/value – The research provides new insights into IC disclosure by mapping its content and emphasis against changes in corporate strategy. This has contemporary significance due to the wider disclosure debate concerning strategy and value creation in the annual report, for instance through integrated reporting. Further, the research shows the value of annual reports for longitudinal disclosure research.

Intellectual capital disclosure by Chinese and Indian information technology companies

2016 ◽  
Vol 17 (3) ◽  
pp. 507-529 ◽  
Author(s):  
Qianyu Wang ◽  
Umesh Sharma ◽  
Howard Davey
Keyword(s):  
Information Technology ◽  
Sample Size ◽  
Intellectual Capital ◽  
Annual Reports ◽  
Future Research ◽  
Content Type ◽  
Market Capitalization ◽  
Reporting Practices ◽  
External Capital

Purpose – The purpose of this paper is to examine the extent and quality of voluntary intellectual disclosures by information technology (IT) companies of China and India. Design/methodology/approach – The research method adopted for this study is content analysis. The research is limited to the intellectual capital information disclosed in companies’ annual report. The sample for this research is based on 20 IT companies listed by market capitalization listed on Shenzhen or Shanghai stock exchange market, and the largest 20 companies listed on Indian stock market. Findings – Indian IT companies tends to perform better than Chinese IT companies in extent and quality of disclosures. The extent of disclosure of both countries is at a relatively high level. The most frequently reported disclosure category in India is external capital, while the least one is human capital. In China, external capital is the most frequently disclosed category, while the internal capital is the least one. Research limitations/implications – The sample size of the study is relatively small. Future research can expand on the sample size to get an overview of the intellectual capital disclosure, and conduct a longitudinal study to capture the trend of reporting practices. Practical implications – The findings of this study have implications for policy makers and standard setters for rethinking of inclusion of intellectual capital disclosure in annual reports as compulsory items. This will not only add tot he quality of information but various stakeholders will be able to make an assessment of the values of a firm. Originality/value – Previous studies of intellectual capital (IC) disclosure have covered little on the relationship between market capitalization and quality of disclosure and cross-country disclosure on IC. This research tends to extend the literature on IC disclosure.

scholarly journals Transforming the stakeholders’ Big Data for intellectual capital management

2018 ◽  
Vol 26 (3) ◽  
pp. 420-442 ◽  
Author(s):  
Lorna Uden ◽  
Pasquale Del Vecchio
Keyword(s):  
Big Data ◽  
Conceptual Framework ◽  
Activity Theory ◽  
Intellectual Capital ◽  
Value Creation ◽  
Organizational Values ◽  
Service Science ◽  
Future Research ◽  
Content Type ◽  
Service Ecosystems

PurposeThis paper aims to define a conceptual framework for transforming Big Data into organizational value by focussing on the perspectives of service science and activity theory. In coherence with the agenda on evolutionary research on intellectual capital (IC), the study also provides momentum for researchers and scholars to explore emerging trends and implications of Big Data for IC management.Design/methodology/approachThe paper adopts a qualitative and integrated research method based on a constructive review of existing literature related to IC management, Big Data, service science and activity theory to identify features and processes of a conceptual framework emerging at the intersection of previously identified research topics.FindingsThe proposed framework harnesses the power of Big Data, collectively created by the engagement of multiple stakeholders based on the concepts of service ecosystems, by using activity theory. The transformation of Big Data for IC management addresses the process of value creation based on a set of critical dimensions useful to identify goals, main actors and stakeholders, processes and motivations.Research limitations/implicationsThe paper indicates how organizational values can be created from Big Data through the co-creation of value in service ecosystems. Activity theory is used as theoretical lens to support IC ecosystem development. This research is exploratory; the framework offers opportunities for refinement and can be used to spearhead directions for future research.Practical implicationsThe paper proposes a framework for transforming Big Data into organizational values for IC management in the context of entrepreneurial universities as pivotal contexts of observation that can be replicated in different fields. The framework provides guidelines that can be used to help organizations intending to embark on the emerging paradigm of Big Data for IC management for their competitive advantages.Originality/valueThe paper’s originality is in bringing together research from Big Data, value co-creation from service ecosystems and activity theory to address the complex issues involved in IC management. A further element of originality offered involves integrating such multidisciplinary perspectives as a lens for shaping the complex process of value creation from Big Data in relationship to IC management. The concept of how IC ecosystems can be designed is also introduced.

An intellectual capital maturity model (ICMM) to improve strategic management in European universities

2015 ◽  
Vol 16 (2) ◽  
pp. 419-442 ◽  
Author(s):  
Giustina Secundo ◽  
Susana Elena- Perez ◽  
Žilvinas Martinaitis ◽  
Karl-Heinz Leitner
Keyword(s):  
Higher Education ◽  
Strategic Management ◽  
Intellectual Capital ◽  
Step Change ◽  
Current Level ◽  
Future Research ◽  
Research Approach ◽  
Maturity Model ◽  
Content Type ◽  
European Universities

Purpose – The public sector is one of the least addressed areas of intellectual capital (IC) research. Universities are an interesting area of investigation because they are considered critical players in the knowledge-based society. The purpose of this paper is to develop a more general, flexible and comprehensive “IC Maturity Model” for Universities (ICMM), a framework for defining and implementing IC measurement and management approaches, as part of the whole strategic management of universities. Thus, the ICMM proposes a staged framework to initiate a step-by-step change within a university based upon its current level of IC management maturity. The different steps of maturity might be an answer to cope with the huge diversity of European universities, some of which have strong managerial orientation, while others follow collegial forms of governance. Design/methodology/approach – The research approach is based on what has been called the “third stage” of IC research (Dumay and Garanina, 2013), focused on the practices of IC approaches rather than on its theoretical conceptualisation. The ICMM has been developed under the “Quality Assurance in Higher Education through Habilitation and Auditing” project framework, initiated by the Executive Agency for Higher Education and Research Funding of Romania (EUFISCDI). Three Mutual Learning Workshops (MLWs) were organised as a mean to bring together 15 international experts and practitioners to share their views and experience on IC reporting and setting up task forces. Findings – An ICMM, which is a flexible model of implementing IC approaches within public universities, is developed. The ICMM provides a theoretical continuum along which the process of maturity can be developed incrementally from one level to the next, moving from IC data collection, awareness of IC, adjustment of IC specific indicators, measurement of IC, reporting of IC, interpretation and decision making, strategy and planning. Research limitations/implications – Future research needs to conduct empirical studies in universities to generalise the effectiveness of the ICMM model and guidelines for implementation. Practical implications – The ICMM provides a staged framework to initiate a step-by-step change within a university based upon its current level of IC management maturity and its IC value creation dynamics. It allows universities to follow different paths, not necessarily a linear sequence. Originality/value – Although several methods for IC measurement and management exist, most of these cannot accommodate the trade-off between the comparability aims and the efforts to capture the institution’s uniqueness when designing an IC model.

Involuntary disclosure of intellectual capital: is it relevant?

2017 ◽  
Vol 18 (1) ◽  
pp. 29-44 ◽  
Author(s):  
John Dumay ◽  
James Guthrie
Keyword(s):  
Intellectual Capital ◽  
Mass Communication ◽  
Annual Reports ◽  
Future Research ◽  
Content Type ◽  
Social Good ◽  
Key Issues ◽  
The Impact ◽  
A Company ◽  
Share Value

Purpose The purpose of this paper is to present an exploratory essay evaluating whether involuntary intellectual capital disclosure (ICD) is value relevant to stakeholders. The authors define involuntary disclosure as “what external stakeholders and stakeseekers disclose about a company”. This essay is timely because it lays the foundations for future ICD research that departs from traditional analyses of corporate reports, especially annual reports. Design/methodology/approach The paper provides a critical reflection on current and future developments in ICD research. The normative arguments rely on the experience and expertise along with examples from the ICD literature and contemporary business media to critique existing ICD research and practice and to offer new ways forward for future research. Findings In highlighting the limitations of the traditional ICD literature, the authors provide a foundation from which researchers should contemplate a powerful new force in ICD brought about by the rapid transformation in technologies and forces of mass communication. The authors introduce the concept of “involuntary disclosure”, and highlight several key issues that intellectual capital (IC) researchers should consider if they want their academic endeavours to contribute not only to practice, but to a wider environmental and social good. Practical implications Involuntary disclosures produced by stakeholders and stakeseekers introduce opportunities and threats to organisations, bringing new risks that impact share value and reputations. How well organisation manage these risks, and the impact inside and outside organisational boundaries, to provide economic, environmental and social value, should provide ample fuel for future transformational IC research. Originality/value The most value relevant disclosures are not what an organisation discloses or reports about itself, but rather what stakeholders and stakeseekers communicate. However, how reliable are involuntary disclosures and how can stakeholders and organisations verify IC disclosures coming from outside the organisation? If involuntary IC disclosures are value relevant, how might organisations seek to influence and manage them to serve their ends?

Value creation through intellectual capital in developed European markets

2014 ◽  
Vol 41 (2) ◽  
pp. 272-291 ◽  
Author(s):  
Elena Shakina ◽  
Angel Barajas
Keyword(s):  
Production Function ◽  
Intellectual Capital ◽  
Value Creation ◽  
Research Question ◽  
Intangible Capital ◽  
Future Research ◽  
Content Type ◽  
Log Linear ◽  
European Markets ◽  
Hedonic Approach

Purpose – This paper aims to investigate the production function of firms based on the use of intellectual capital. The authors come up with this problem since believe that the new economy conditions require an adjustment and a development of classical firm theory. Design/methodology/approach – The research question addressed in this study is mainly related to the empirical validation of the function based on companies' intangibles in the Cobb-Douglas framework. This model enables the authors to advocate the idea of the complementarity of intellectual resources as well as simplifies the analysis of intellectual capital features. To accomplish the purpose of the research, the authors design a log-linear model and estimate it on a sample of more than 400 European and American companies. Findings – Application of Cobb-Douglas framework allowed designing a production function based on intellectual capital. The complementarity of intellectual capital components is justified on the empirical results obtained in this research. The increasing return to scale for intellectual capital was established for the sample examined in this study. Research limitations/implications – The main shortcoming of the approach implemented in this study is related to the proxy indicators of intellectual capital. Nevertheless, the authors statistically validate the chosen indicators applying hedonic approach. Practical implications – Practical accomplishment of this research is mainly associated with the conclusion about an increasing return to scale of intellectual capital. This phenomenon appears to be of a particular importance for investment decisions. Originality/value – The findings of this paper provide a new insight into intellectual resources interrelation that enhances companies' value creation. The authors also hope to assist future research attempts in application of the theory of company's growth driven by its intangible capital.

Intellectual capital, strategy and financial crisis from a SMEs perspective

2014 ◽  
Vol 15 (2) ◽  
pp. 294-315 ◽  
Author(s):  
Sandra Cohen ◽  
Vassilios-Christos Naoum ◽  
Orestes Vlismas
Keyword(s):  
Financial Crisis ◽  
Strategic Management ◽  
Intellectual Capital ◽  
Economic Recession ◽  
Future Research ◽  
Research Approach ◽  
Cross Sectional ◽  
Content Type ◽  
Strategic Position ◽  
Practical Implications

Purpose – The purpose of this paper is to investigate the relationship of intellectual capital (IC) with the strategy of small-medium enterprises (SMEs) and their executive decisions regarding the strategy of their IC portfolio during a financial crisis. Design/methodology/approach – The analysis is informed by the responses of 162 Greek SMEs on a structured questionnaire. Greek SMEs constitute an appropriate research setting since they operate within an environment of economic recession, financial turbulence and operational uncertainty. Findings – Initial analysis indicates that SMEs’ strategic position seems to affect the composition of their IC portfolio, especially when a SME is strategically classified as Analytic according to Miles and Snow's (1978) typology. Moreover, Greek SMEs do not seem to follow the suggested by literature executive decisions for the strategic management of their IC portfolio. They apply on their IC components strategies that could be classified as “Act” or “Analyse” under Wissenzbilanz's typology (Bornemann and Alwert, 2007) regardless of the prospects for improvement expected for these IC components. Therefore, while SMEs seem to care about their IC, they do not manage it in a coherent and strategically beneficial way. Research limitations/implications – The study applies a novel methodology. By properly adapting the Wissenzbilanz's typology for IC executive decisions, it provides a research approach for collecting cross sectional firm data for IC executive decisions. A possible limitation but also an area for future research is to examine the implications of the relations between SMEs’ strategy and IC portfolio on SMEs’ financial performance. Practical implications – The practical implications of this study are twofold. First, managers should take into consideration that IC seems to be a strategic enabler even in periods of financial crisis and, thus, decisions regarding IC investments should not be abandoned. Second, SMEs tend to follow different than the recommended by literature executive decisions for the components of their IC portfolio. This might reduce the potential returns on IC investment. Therefore randomly investing in IC will not result in the expected benefits. Originality/value – The contribution of this study is that explores the relations of SMEs’ executive decisions in relation to the strategic management of their IC components as well as the influence that the strategic position of SMEs exerts on the composition of their IC portfolio during a financial crisis.

Knowledge management and value creation in the post-crisis banking system

2019 ◽  
Vol 23 (2) ◽  
pp. 263-278 ◽  
Author(s):  
Francesco Campanella ◽  
Armand Derhy ◽  
Francesco Gangi
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Value Creation ◽  
Knowledge Creation ◽  
Economic Value ◽  
Banking System ◽  
Positive Influence ◽  
Content Type ◽  
Creation Process ◽  
The Relationship

Purpose This paper aims to demonstrate the existence of a relationship between the knowledge creation process and competitive advantage in the banking system. The framework of knowledge creation processes adopted in this research is the spiral of knowledge proposed by Nonaka and Takeuchi (1995). The concept of competitive advantage is limited to the measurement of economic value by adopting methods that compare the financial performance of the banks with related markets. The objective of this research is to answer the following research question: Which factors of the spiral of knowledge are relevant for increasing a bank’s economic value? Design/methodology/approach The sample used for this empirical research is composed of 960 banks operating in 24 countries. The sample was analyzed from 2012 to 2015 and includes 3,840 observations. Regarding the methodology, hypothesis demonstration was carried out using a panel analysis (generalized least squares regression) on a set of variables. Findings The results show that Nonaka and Takeushi’s spiral of knowledge has a positive influence on value creation in the banking system. However, not all factors of the four modalities of converting tacit knowledge into explicit knowledge and vice versa have a positive influence on the economic value of banks. Therefore, by excluding factors that have a negative influence or are not significant, it is possible to formulate an empirical model that illustrates the relationship between the spiral of knowledge and the economic value of banks. Originality/value There is a lack of studies on the knowledge creation process in the banking system because most of the research is geographically limited, and empirical tests are performed on small samples. Second, generally, these studies are limited to the relationship between intellectual capital and bank performance measured by accounting ratios. However, intellectual capital is only one component of the broader concept of knowledge. This research uses a large and geographically diverse sample and studies the relationship between the spiral of knowledge and economic value, which is measured by various financial techniques.

scholarly journals Intellectual capital disclosure: evidence from UK accounting firms

2018 ◽  
Vol 19 (4) ◽  
pp. 768-786 ◽  
Author(s):  
Angus Duff
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Professional Service ◽  
Future Research ◽  
Accounting Firms ◽  
Content Type ◽  
Reporting Practices ◽  
Wide Range ◽  
Internal Capital ◽  
The Uk

Purpose The purpose of this paper is to examine the extent and quality of voluntary intellectual capital disclosures (ICD) by professional accounting firms (PAFs) in the UK. Design/methodology/approach The research method adopted for this study is content analysis considering the ICD in firms’ annual reports, corporate social responsibility reports, websites and recruitment materials. The sample for this research is based on 20 PAFs ranked by fee income. The paper employs institutional theory as its theoretical lens. Findings The findings of this paper show that ICDs vary across different forms of reports. The most frequently reported disclosure category is human capital, while the least reported category is internal capital. Monetary disclosures are most likely to relate to internal capital, while pictorial disclosures are most likely to relate to human capital. Research limitations/implications The sample size of the study is relatively small reflecting the extreme market concentration of accounting services in the UK and internationally. Future research can conduct a longitudinal study to capture the trend of reporting practices and consider narrative and discursive approaches to ICD. Originality/value No previous studies of intellectual capital (IC) disclosure have considered ICDs in professional service firms that are in themselves rich sources of human capital. Furthermore, the investigation uses a wide range of communications and assesses monetary, non-monetary, narrative and pictorial disclosures. This research extends both the IC disclosure and PAFs’ literatures.

Disguising diversification for innovation

2019 ◽  
Vol 11 (1) ◽  
pp. 119-138
Author(s):  
Michal Lysek
Keyword(s):  
Product Development ◽  
Defense Mechanism ◽  
Innovation Management ◽  
Theory And Practice ◽  
Annual Reports ◽  
Future Research ◽  
Research Approach ◽  
Content Type ◽  
External Forces ◽  
Do So

Purpose Axis, HMS and Sectra are three Swedish companies whose managers argue that you should never be radical on two fronts: creating new products for new markets at the same time. This paper aims to show however that while Axis’ managers claim not to be radical on two fronts, they still perform horizontal diversification, but they do so by disguising it as product development. Just like certain animals disguise themselves for protection, Axis’ managers disguise diversification as a defense mechanism, to protect themselves. In so doing, they have learned to manage the dynamics of innovation, by shifting between periods of focus and diversification. Design/methodology/approach This study was based on an inductive research approach influenced by grounded theory. In total, 32 interviews were performed with top and middle-line managers from three Swedish companies: Axis, Sectra and HMS. A total of 91 A4 transcript pages, 66 A4 e-mail pages, 52 annual reports (from 1999 to 2017) and 256 company presentations and newspaper articles (from 1988 to 2015) were collected and analyzed. Open and selective coding yielded 105 sub-categories, which were grouped into four main categories and presented as detailed descriptions. The results were based on the interpretation of those descriptions and related to disguise as a defense mechanism in psychology. Findings Innovation is a difficult process often met with hostility. Axis’ managers however have found a way to go beyond their existing business domain, while still protecting themselves from internal and external opposing forces that would go against such a risky strategy. To do so, they first expand their existing business domain. Then they perform horizontal diversification and disguise it as product development, as a defense mechanism to protect their desire to create innovation from managers who would oppose their risky strategy. In so doing, they convince other stakeholders that innovation through diversification is the best strategy for their company. Research limitations/implications This study was only performed at three Swedish technological companies. For future research, other Swedish companies could be included, and not only technological companies either, to explore whether diversification is considered a strategy that needs to be disguised in other businesses as well, and how managers from those businesses deal with internal and external forces. Practical implications Managers from Axis, Sectra and HMS are fully aware that innovation as well as diversification is difficult. Ideas that seem interesting and full of potential for some people may seem too risky and dangerous for others. To protect diversification as a strategy for innovation, Axis’ managers have found a way to disguise diversification, and make it seem less dangerous. In so doing, they are able to diversify and create innovation. A strategy for disguising diversification therefore has practical managerial implications of how managers can deal with internal and external forces that would go against such a strategy. Originality/value This study connects defense mechanisms in psychology with innovations strategy and innovation management and solves a practical dilemma that managers often struggle with: how to create innovation despite barriers that exists and oppose such a strategy. Managers will most likely always face different barriers to innovation, and perhaps solving them is not possible. This study shows how Axis’ managers have found a way to go around this problem, when solving it is not possible. This strategy thus shows originality and value for both theory and practice related to innovations strategy and innovation management.

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