The dynamics of value creation: mapping your intellectual performance drivers
| Date | 01 June 2004 |
| Pages | 312-325 |
| Published date | 01 June 2004 |
| DOI | https://doi.org/10.1108/14691930410533722 |
| Author | Bernard Marr,Giovanni Schiuma,Andy Neely |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
The dynamics of value creation:
mapping your intellectual
performance drivers
Bernard Marr
Cranfield School of Management, Cranfield, UK
Giovanni Schiuma
University of Basilicata, Potenza, Italy, and
Andy Neely
Cranfield School of Management, Cranfield, UK
Keywords Intangible assets, Intellectual capital, Balanced scorecard, Resources
Abstract The paper highlights the importance of visual representations of strategic intent in
order to understand how organizational resources – especially intangible assets and intellectual
capital – are used to create value. Based on the literature the paper provides a taxonomy of
organizational value drivers. Grounded in the resource-based view of the firm, which argues that
organizational resources or assets are bundled together and interdependent, it then highlights
shortcomings in the strategy map approach based on the balanced scorecard. The paper then
introduces the value creation map that utilizes both direct and indirect dependencies to map value
creation. It is suggested that this approach complements the strategy map approach by extending
its view of value creation from direct to both direct and indirect dependencies. Subsequently, the
paper presents a case study of how the value creation map was applied to understand the new
product development process in a leading furniture manufacturing firm.
Introduction
Organizations perform well and create value when they implement strategies that
respond to market opportunities by exploiting their internal resources and capabilities
(Penrose, 1959; Andrews, 1971). Therefore, managers need to understand what are the
key resources and drivers of performance an d value in their organizations.
Traditionally, those resources were physical, such as land and machines, or
financial capital. More recently the concept of intellectual capital has been identified as
a key resource and driver of organizational performance and value creation (Itami,
1987; Teece, 2000; Nahapiet and Ghoshal, 1998; McGaughey, 2002; Delios and Beamish,
2001). The concept of performance drivers suggests causal relationships between
resources and organizational value creation. Penrose argues that it is never resources
themselves that create value, but the services that the resources can render (Penrose,
1959, p. 25).
In order to understand how organizational resources translate into value Kaplan
and Norton (2000, 2003) suggest visually mapping the causal relationships into a
strategy map. Based on the perspectives of the balanced scorecard (Kaplan and
Norton, 1992, 1996a, b) a strategy map contains outcome measures and performance
drivers, linked together in a cause-and-effect diagram. Whereas evidence exists of
causal relationships between non-financial assets and performance (Rucci et al., 1998;
Ittner and Larcker, 1998) there are also some critical voices (Norreklit, 2000, 2003)
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
5,2
312
Journal of Intellectual Capital
Vol. 5 No. 2, 2004
pp. 312-325
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930410533722
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