Leveraging intellectual capital through product and process management of human capital
| Published date | 01 December 2002 |
| Date | 01 December 2002 |
| Pages | 415-429 |
| DOI | https://doi.org/10.1108/14691930210448323 |
| Author | William H.A. Johnson |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Leveraging
intellectual
capital
415
Journal of Intellectual Capital,
Vol. 3 No. 4, 2002, pp. 415-429.
#MCB UP Limited, 1469-1930
DOI 10.1108/14691930210448323
Leveraging intellectual capital
through product and process
management of human capital
William H.A. Johnson
Michael G. DeGroote School of Business, McMaster University,
Hamilton, Ontario, Canada
Keywords Intellectual capital, Human resource utilization, Tacit knowledge
Abstract The current framework of intellectual capital is examined. It is argued that
transformation of human capital into structural capital is counter-productive for certain types of
highly tacit, experiential and intuitive knowledge. In fact, the very process of structuralizing
intellectual capital may institutionalize knowledge stocks and create core rigidities or result in the
``false recipe'' syndrome. An important understanding is that intellectual capital does not have to
be explicitly owned by the firm in order to be valuable to it. Attempts to measure all aspects of
intellectual capital may be counter-productive and neglect the actual management of these
intellectual capital assets towards a higher real firm valuation. Ultimately, a strategy for
determining what knowledge to structuralize and manage as product and what knowledge not to
structuralize and manage as process is necessary for a practical and profitable means of
developing value in the concept of intellectual capital.
The purpose of this paper is to open up dialogue about distinguishing between
those knowledge sets (i.e. basic understandings of relationships among
information elements) that can be explicated and those that cannot within the
reasonable parameters of cost and resource allocations. An earlier version of
the paper was written in 1998 for a conference on intellectual capital and then
shelved. However, a reading of the new literature on intellectual capital
continues to suggest a need for a framework to distinguish between product
and process aspects of the framework. Specifically, how might managers and
scholars go about effectively managing strategies towards creating value from
intellectual capital? In this paper the distinction between the product and
process of intellectual capital is re-introduced as a way to better manage this
aspect of the knowledge resources of the organization. The logic agrees with
Haldin-Herrgard's (2000) recent assertion that tacit and explicit knowledge
must be managed differently. While adopting a philosophical perspective, it
offers a simple managerially relevant alternative to recent epistemological
conceptualizations (O'Donnell et al., 2000). The paper does not refute these and
other interesting ways of viewing intellectual capital but argues only that an
effort to distinguish tacit and explicit knowledge sets and managing them
differently would be of utmost value to organizations. It takes two synergistic
perspectives, one philosophical and the other economic, to look at this
interesting problem.
The current issue and full text archive of this journal is available at
http://www.emeraldinsight.com/1469-1930.htm
An earlier version of this paper was originally presented at the 8th International Forum on
Technology Management, 2-6 November 1998 in Grenoble, France.
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