Rome wasn’t built in a day … reflecting on time, intellectual capital and intellectual liabilities
| DOI | https://doi.org/10.1108/JIC-02-2014-0018 |
| Pages | 2-19 |
| Date | 12 January 2015 |
| Published date | 12 January 2015 |
| Author | Marco Giuliani |
| Subject Matter | Information & knowledge management,Knowledge management |
Rome wasn’t built in a day …
reflecting on time, intellectual
capital and intellectual liabilities
Marco Giuliani
Department of Management, Università Politecnica delle Marche,
Ancona, Italy
Abstract
Purpose –The purpose of this paper is to analyse, through a temporal lens and from a managerial
perspective, the role played by intellectual capital (IC) and intellectual liabilities (ILs) “in practice”
within the value creation and value destruction processes. In particular, this study is based on the
following research question: to what extent are time and its attributes considered, measured, and
discussed with reference to IC and ILs and their influence on financial capital (FC)? In order to achieve
this purpose, the author has carried out a field study.
Design/methodology/approach –A field study method is adopted in order to understand IC and
ILs “in action”from a temporal perspective.
Findings –This study highlig hts the relevance of ti me when IC and ILs are anal ysed from a
dynamic perspecti ve. In particular, the main find ings are the following. First ,i t emerges that the time
dimension of IC tends not to be measured due to the complexity of IC itself and to the lack of
adequate accounting practices. Second, IC time is generally considered to be non-cyclical and
random. Third, even if time is not measured, some companies talk about it and when this is done with
regularity, time perceptions move from an individual sphere to a collective one and they become
more and more reliable. Moreover, IC performance is perceived to be “distant”from FC perform ance:
the succession of events and the time lags are difficult to defineand quantify as the influence of IC on
FC is mediated by several resources and events. Lastly, the value destruction process related to ILs
tends to generate n egative effects f aster than the valu e creation one, esp ecially with refe rence
to the impacts of IC on FC.
Research limitations/implications –The main limitations of this study are twofold. The first is
related to the methodology adopted and the related risks that the results may be subject to both
interviewee and interviewer bias and interpretation. The second is related to the fact that the
constructs to be discussed were not proposed by the firms but by the author, in order to make the
results comparable.
Practical implications –This study contributes to the literature on IC and ILs “in action”and “in
practice”. Moreover, this study enriches the extant IC and ILs literature focusing on time, a variable
that is generally assumed to be a natural unchangeable phenomenon that does not deserve attention. In
particular, the findings highlight the different behaviours and perceptions that occur when IC and ILs
are looked at through a temporal lens. Finally, this study pinpoints that value creation and value
destruction processes seem to have different timings as it takes more time to create value than to
destroy it.
Originality/value –In comparison to previous studies, this study does not focus on the positive
and negative effects of IC separately, but combines the two issues, also comparing the value
creation and the value destruction processes in order to offer a complete picture. Moreover, it
adopts a temporal lens, which has been applied only with reference to IC but not to ILs as well.
Finally, while the extant literature on ILs tends to investigate them from a theoretical perspective
and adopting a static approach, this research investigates ILs empirically from a dynamic
perspective.
Keywords Value creation, Time, Intellectual capital, Intellectual liabilities, Temporal lens,
Value destruction
Paper type Research paper
Journal of Intellectual Capital
Vol. 16 No. 1, 2015
pp. 2-19
©Emerald Group Publishing Limited
1469-1930
DOI 10.1108/JIC-02-2014-0018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
2
JIC
16,1
1. Introduction
“Rome wasn’t built in a day, but when it fell, it burnt in one”. This adage, with its reference
to creation, destruction, and time, provides a very apropos springboard for the discussion
underlying this study. This paper builds on Giuliani (2013) to provide a different analysis
regarding the intellectual capital (IC) value creation and value destruction processes.
While that paper suggests there exist differences between value creation and value
destruction processes in terms of connections, i.e. between (IC) dynamics and intellectual
liability (IL) dynamics, it also offers the possibility of investigating the temporal dimension
of the analysed value processes. Because of length and scope limitations, Giuliani (2013)
did not develop this aspect previously. Consequently, the present study purports to
investigate IC and ILs through a temporal lens (Ancona et al., 2001a).
Within the IC discourse, the idea that IChas an important role in creating competitive
advantages and a relevant influence on the organizational performance is dominant
(Edvinsson, 1997; Stewart, 1997; Sveiby, 1997). Some scholars have highlighted that IC
also has a negative or destructive side that tends to be overlooked, not only in theory but
also in practice (Caddy, 2000; De Santis and Giuliani, 2013; Giuliani, 2013; Harvey and
Lusch, 1999). This implies that (ILs) are “one of the most under-researched or, more
realistically, avoided topics in the IC literature”(Dumay, 2013).
A lens that can be used to shed light on different aspects of IC and ILs is the
temporal lens which puts time in the centre (Ancona et al., 2001a). In fact, this lens
allows the exploration not only of processes and practices, but also of the pace at which
they move, the trajectory over time, what they align with, and the situatedness in time
of a phenomenon. This perspective makes it possible to understand not only whether
value creation and value destruction processes related to IC and ILs develop along
different paths and with different intensities, but also whether they do so at different
paces. In fact, some scholars have argued that it is not only important to understand
what IC is and what it does, but also to investigate when IC does what (Giuliani, 2009;
Giuliani and Skoog, 2012; Skoog, 2003). Although this stream of studies seems
to be relevant, especially for analysing “IC in action”or “IC in practice”(Cuganesan,
2005; Dumay, 2013; Guthrie et al., 2012), to date the time dimension appears to still
be left out of discussions, both in the IC and in the accounting fields (Giuliani and
Skoog, 2012); this implies that research designs or theories risk being temporally
incorrect or incomplete and processes risk being misunderstood or misrepresented
(Tuttle, 1997).
This study attempts to combine the aforementioned aspects, i.e. time, IC and ILs,
in order to address the need for empirical investigations on IC (Cuganesan, 2005;
Cuganesan and Dumay, 2009; Marr et al., 2004) and ILs (Brunold and Durst, 2012;
De Santis and Giuliani, 2013; Garcia-Parra et al., 2009; Jääskeläinen, 2011; Mäenpää and
Voutilainen, 2012) and to contribute to the call for qualitative research on the time
dimension (Ezzamel and Robson, 1995; Hassard, 1996). Stemming from this, the aim of
this paper is to analyse the role played by IC and ILs “in practice”within the value
creation and value destruction processes, by adopting a temporal lens and a managerial
perspective. In particular, this study is based on the following research question:
RQ1. To what extent are time and its attributes considered, measured and discussed
with reference to IC and ILs and their influence on financial capital (FC)?
In order to achieve this purpose, the author has carried out a field study in the nine
companies described and analysed by Giuliani (2013).
3
Intellectual
capital and
intellectual
liabilities
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