Leveraging intellectual capital in developing countries: evidence from Kenya
| Published date | 14 May 2018 |
| Date | 14 May 2018 |
| Pages | 562-580 |
| DOI | https://doi.org/10.1108/JIC-11-2016-0109 |
| Author | Silvia Ferramosca,Alessandro Ghio |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Leveraging intellectual
capital in developing countries:
evidence from Kenya
Silvia Ferramosca
Department of Economics and Management, University of Pisa,
Pisa, Italy, and
Alessandro Ghio
Department of Accounting, Monash University, Caulfield, Australia
Abstract
Purpose –The purpose of this paper is to explore how organization’s resources and community aspects
shape intellectual capital (IC) performance in developing countries. In fact, it is still unclear to what level
organizational aggregation can influence forms of IC performance in the simultaneous presence of strong
traditional legacy and eagerness for development.
Design/methodology/approach –The study is based on a project of aggregation of artists in Kenya.
It uses a mixed methods approach.
Findings –The analysis first documents that multiple capital resources, i.e., human, social, and
organizational contribute to improve IC performance. Social and organizational resources have the largest
positive effects. This study then supports the importance of community aspects in fostering IC performance.
In this light, it appears to facilitate knowledge interaction and interrelationship networks rather than
accentuate possible pre-existing groups’rivalry.
Research limitations/implications –The results are inferred from a single case study, and so the reader
is given the caveat that the results cannot be easily generalized. The evidence gathered can represent a useful
ground on which to build future studies comparing different legal, social, cultural, and economic contexts.
Practical implications –This study gathers insights on how organization’s resources can lead to IC
performance in developing countries and in a setting characterized by a high degree of institutional
complexity. It also addresses the call for more research on programs implemented at local level to leverage IC
and to valorize traditional knowledge in a sustainable and concrete way.
Originality/value –Evidence on IC in developing countries is still scant, besides their potential for growth.
This study attempts to address this gap. Moreover, it pays attention to the context by analyzing the
community aspects. Finally, the use of mixed methods further validates previous evidence on the relationship
between organization’s resources and IC performance.
Keywords Knowledge, Kenya, Developing countries, Intellectual capital, Community, Resources
Paper type Research paper
1. Introduction
Intellectual capital (IC) performance is strongly related with the resources available (Verona,
1999; Wernerfelt, 1984). At the same time, IC performance is often the result of individual
activity, which questions the extent of the benefits of grouping people in an organization,
especially in the presence of a context characterized by multiple communities (Bounfour and
Edvinsson et al., 2005). This issue is particularly crucial in developing countries, where
tensions arise between strong ties to traditions and the eagerness to foster innovation.
Therefore, this paper aims to better understand how diverse organization’s resources in
developing countries influence IC performance, in particular by looking at a highly
individualistic form of IC performance, namely art creation. It then explores the impact of
community aspects on IC performance in relation to the other organization’s resources.
An in-depth understanding of organization’resources in relation to IC performance is a
crucial issue for developing countries (Andreeva and Garanina, 2016). The latter is
characterized by high potential for growth, for instance, the World Bank shows that
developing countries’economies grew at 4.3 percent in 2015 and are projected to grow
Journal of Intellectual Capital
Vol. 19 No. 3, 2018
pp. 562-580
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-11-2016-0109
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
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JIC
19,3
4.8 percent in 2016, whereas developed economies show a 2.4 percent growth in 2015, which
is projected at 2.9 percent in 2016 (World Bank Group, 2016). In particular, despite its large
heterogeneity, Africa has a large, still unfulfilled, potentiality (AfDB et al., 2016). Developing
countries possess a strong connection to their traditions (Abraham, 2015; Iliffe, 2015).
This feature could represent a competitive advantage for them, if appropriately valorized.
At the same time, it could be a limitation since it could lead to increased rivalry among
different communities, discouraging collaboration and sharing of information. Therefore,
besides its economic relevance, the study of IC in developing countries is further
theoretically motivated by the presence of the peculiar role that the community aspect plays,
which needs to be taken into account in understanding the impact of the different resources
on IC performance.
In this study, IC performance, the result of organization’s resources, is measured as art
creation. Art represents one of the most complex results of IC performance (Sgourev, 2013).
It is often performed at individual level, but it requires a broad audience in order to be
valorized (Collingwood, 1938; Beardsley, 1965; Sgourev, 2013). Moreover, it is characterized,
on the one hand, by the expectation to disrupt the existing products, and on the other hand,
it is often strongly connected to traditional knowledge and culture. The latter plays a crucial
role in art creation, and in the way, the related work is organized. This aspect is extremely
evident in countries with a strong traditional legacy, where divisions due to traditional
heritage still represent a major source of conflict (Iliffe, 2015). Furthermore, art represents
one of the most important form of IC performance in developing countries, but is still poorly
valorized (Sieber and Walker, 1987). So far, there has been a lack of evidence on the
functioning of organizations grouping together artists, especially in a context characterized
by high rivalry and traditional legacy. Therefore, it is possible to observe that art creation
provides an ideal setting to investigate IC performance.
Overall, a gap exists in the understanding of how organization’s resources contribute to
IC performancein developing countries.Resting on the resource-basedtheory, this paper aims
to investigate: how diverse organization’s resources impact IC performance in developing
countries, and the impact of the community aspect in relation to the other organization’s
knowledge resources. Specifically, the paper considers the following resources, i.e., human,
social, and organizational to investigate the two impacts mentioned above.
To address these research questions, this paper performs an in-depth case study on an
art school program, named in this work “WE”for anonymity, in Malindi (Kenya).
This organization had been initially launched by an Italian artist as part of a broader project
with the scope to promote the local culture. In particular, it aims to train local artists and to
facilitate the international exposure of their work. This setting provides an ideal field of
enquiry since it is characterized by a high level of informality, the presence of strong
cultural roots, and communication difficulties that further exacerbate the tensions among
organizations’members in the work creation process.
The empirical findings document that multiple organization’s resources, i.e., human,
social, and organizational impact IC performance. Social and organizational resources have
the largest positive effect, meaning that grouping together people is beneficial for the final
outcome. Furthermore, the community aspect has an incremental positive role to social
capital. Thus, it is possible to infer its role in facilitating knowledge interactions and creation
of networks, which overall positively influence IC performance.
This research represents an attempt to understand organization’s resources in IC
performance in developing countries. Moreover, it gathers insights on the influence of
community aspects into relational resources (i.e. social and organizational), further
developing IC theory concerning different institutional and socio-cultural contexts.
The remainder of this paper is organized as follows. Section 2 presents the conceptual
framework based on the resource-based view. Section 3 describes the research design used
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Leveraging IC
in developing
countries
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