Strategic use of IC reporting in small and medium‐sized IT companies. A progress report from a Nordic project
| Date | 01 December 2005 |
| Published date | 01 December 2005 |
| Pages | 558-569 |
| DOI | https://doi.org/10.1108/14691930510628825 |
| Author | Eggert Claessen |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Strategic use of IC reporting in
small and medium-sized IT
companies
A progress report from a Nordic project
Eggert Claessen
Tolvumidlun hf., Reykjavik, Iceland
Abstract
Purpose – The purpose of this paper is to report on how IT sector organizations in all five Nordic
countries have worked together to start a project on using intellectual capital (IC) reporting to improve
strategy formulation in SMEs in the IT sector. The project, called PIP (Putting IC into Practice), is
partly funded by the Nordic Innovation Centre (www.nordicinnovation.net).
Design/methodology/approach – The paper builds on the existing literature as well as the
experience from the Nordic project.
Findings – The objective of the project is to produce, implement and disseminate harmonized
indicators for realising intangible values in companies. Results from the project include the
identification of common indicators for intangible values and how they can be used as supportive
evidence for IC reporting. By using these indicators with strategy maps and scorecards, the companies
are provided with tools and information to improve their strategy formulation process and develop
further their competitive advantage.
Practical implications – The project aims to provide ways to put IC into practice as a tool for
management in order to improve performance. Providing an open source framework for assisting the
knowledge transformation process within companies is an important step is this respect. If successful,
this will affect the management and reporting of IC.
Originality/value – This paper reports on the practical application of the resource-based view of
strategy, where intangible resources play a major role in the internal development path of a company.
Even though the scope is limited to SMEs in information technology in the Nordic countries, the
results are of interest, especially in terms of practical value to other types of companies and industries.
Keywords Intellectualcapital, Disclosure, Knowledgemanagement, Small to medium-sizedenterprises
Paper type Case study
Introduction
The development in world business has changed the focus in management from
looking only at tangible resources to looking at intangible assets and their relationship
to future value creation. The problem for management has been that there appear to be
gaps between what gets measured internally and what gets reported externally. This
can be attributed to lack of reliability of measurement of intangible asset and a lack of
understanding of how to present valid measures due to the characteristics of
intangibles (Gray et al., 2004). Rylander et al. (2000) argue that the goal of disclosure
should be to provide relevant, reliable, and timely information to those who need to
know it so that they can make decisions concerning their relations with the company.
Supporting the argument for successful implementation of measures and reporting is
Thomas (2003), who suggests that corporate reports are more likely to generate
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/1469-1930.htm
JIC
6,4
558
Journal of Intellectual Capital
Vol. 6 No. 4, 2005
pp. 558-569
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930510628825
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