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.

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 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.

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?

An intellectual capital ontology in an integrated reporting context

2019 ◽  
Vol 20 (1) ◽  
pp. 83-99 ◽  
Author(s):  
Riccardo Stacchezzini ◽  
Cristina Florio ◽  
Alice Francesca Sproviero ◽  
Silvano Corbella
Keyword(s):  
Intellectual Capital ◽  
Value Creation ◽  
Social Ontology ◽  
Integrated Reporting ◽  
Core Element ◽  
Content Type ◽  
Creation Story ◽  
Socially Constructed ◽  
The Empirical Analysis

Purpose The purpose of this paper is to investigate the intellectual capital (IC) ontology in an integrated reporting context to explore the function that integrated report (IR) preparers assign to IC elements and the role of integrated thinking in this process. Design/methodology/approach Social ontology theory helps elucidate how an energy-sector company socially constructed an IC ontology in which IC is a core element of the value creation story told in the IR. The empirical analysis benefited from in-depth interviews with the corporate staff. Findings The subjective nature of IC ontology emerges, in that IC’s function is defined during the very process of IR preparation. The intangible elements drive sustainability-oriented financial value creation according to the sustainability approach embraced by the company’s business model. Integrated thinking both facilitates this perspective on IC is shared among various departments of the company and provides a procedure for scrutinising what counts as IC in this integrated reporting context. Research limitations/implications The research scope is limited to the IR preparation process. Further research could explore IC ontologies beyond this process. Originality/value This study is the first to explore IC ontology empirically within an innovative integrated reporting context. It opens paths to further research on the relationships between IC and integrated thinking.

scholarly journals Conceptualising the contemporary corporate value creation process

2017 ◽  
Vol 30 (4) ◽  
pp. 906-931 ◽  
Author(s):  
Carol A. Adams
Keyword(s):  
Sustainable Development ◽  
Value Creation ◽  
Corporate Strategy ◽  
Stock Exchange ◽  
Social Contexts ◽  
Integrated Reporting ◽  
Content Type ◽  
The Sustainable Development ◽  
Corporate Reporting ◽  
The Impact

Purpose The purpose of this paper is to examine and explain the complex interrelationships which influence the ability of firms to create value for their providers of finance and other stakeholders (loosely referred to in practice as “integrated thinking”). In doing so it examines the interrelationships between: environmental, social and governance (ESG) risk; delivering on corporate strategy; non-financial corporate reporting; and, board oversight. Design/methodology/approach Interviews were conducted with board chairs and non-executive directors of large listed companies on the Johannesburg Stock Exchange (where Boards are required to have a social and ethics sub-committee and approve integrated reports which have been mandatory since 2010) and the Australian Stock Exchange (where Board directors’ liability legislation results in Boards being reluctant to adopt integrated reporting which is voluntary). Findings The research finds that contemporary reporting processes, and in particular those set out in the King III Code and the International Integrated Reporting Framework, influence cognitive frames enhancing board oversight and assisting organisations in managing complexity. This results in increased awareness of the impact of ESG issues together with a broader view of value creation despite investor disinterest. Research limitations/implications A number of avenues of research are suggested to further examine the interrelationships identified. Practical implications The research assists the development of practice and policy by articulating and enhancing the understanding of linkages, which loosely fall under the vague practitioner term “integrated thinking”. Social implications The conceptualisation can inform national and global discussions on the appropriateness of corporate reporting and governance models to achieve sustainable development and contribute to the Sustainable Development Goals. Originality/value The paper conceptualises emerging and complex interrelationships. The cross-country comparison allows an assessment of the extent to which different national social contexts with differing governance and reporting frameworks lead to different perspectives on, and approaches to, value creation.

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 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.

Impact of intellectual capital on financial performance: evidence from the Bangladeshi textile sector

2018 ◽  
Vol 14 (4) ◽  
pp. 429-454 ◽  
Author(s):  
Leena Afroz Mostofa Chowdhury ◽  
Tarek Rana ◽  
Mahmuda Akter ◽  
Mahfuzul Hoque
Keyword(s):  
Financial Performance ◽  
Performance Management ◽  
Emerging Economies ◽  
Intellectual Capital ◽  
Textile Industry ◽  
Value Added ◽  
Annual Reports ◽  
Future Research ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the influence of intellectual capital (IC) on financial performance and, in turn, to provide insights into its impact on emerging economies. Design/methodology/approach Data were collected from 34 textile firms in Bangladesh between 2013 and 2017. The IC efficiency, through value-added intellectual coefficient (VAIC) model, and its impact on financial performance, through return on assets (ROA), return on equity and asset turnover (ATO), was examined using descriptive statistics and multiple regression techniques. The analysis is based on secondary data obtained from annual reports. Findings The results indicate the impact of VAIC components on financial performance and also demonstrate diverse relationships with changes in financial indicators. The VAIC components significantly influenced productivity outcomes, with tangible capital playing a major role in both productivity and profitability. Moreover, it was found that structural capital had a considerable effect on ATO and ROA with human capital indicating an insignificant impact on all financial performance indicators. Research limitations/implications The research outcome is specific to the textile industry in emerging economies. The study may guide future research on IC performance in textile firms and cross-industry comparisons. Practical implications Managers, firm owners and regulators need to align IC to performance management to sustain the competitive advantage in globalised competitive settings. Originality/value The study provides an empirical evidence and extends knowledge of IC utilisation for enhancing the financial performance of the textile firms in emerging economies.

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

2018 ◽  
Vol 19 (5) ◽  
pp. 935-964 ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Generalized Method Of Moments ◽  
Value Added ◽  
Secondary Data ◽  
Share Price ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

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