The evaluation of core competencies in networks: the network competence report
| DOI | https://doi.org/10.1108/JIC-01-2016-0014 |
| Pages | 189-216 |
| Published date | 09 January 2017 |
| Date | 09 January 2017 |
| Author | Francesca Francioli,Massimo Albanese |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
The evaluation of core
competencies in networks: the
network competence report
Francesca Francioli and Massimo Albanese
Department of Economics and Business Studies, University of Genoa, Genoa, Italy
Abstract
Purpose –The purpose of this paper is to propose a model to disclose, report, and manage intellectual capital
(IC) in a network of companies. To this end, it provides a monetary evaluation of core competencies (CCs),
which may be defined as a bundle of various types of intangibles, aggregating their value into a network
statement, called a network competence report (NCR).
Design/methodology/approach –The paper utilises the interventionist approach. The intervention was
conducted by the authors and studied through joint reflections on documentation from meetings and
individual, semi-structured interviews.
Findings –The NCR makes IC more transparent, thereby allowing companies and network managers to
assess the strengths and weaknesses of CCs with a consequent potential insight into their potential earnings.
Research limitations/implications –This method is labour-intensive, especially in its first application,
and the data collection requires considerable company involvement. The interventionist approach may have
influenced the empirical results, which may be affected by subjectivity. As the paper involves a single
network, care should be taken in generalising its empirical evidence.
Practical implications –In making IC management more effective, the NCR is valuable for academics,
management, political authorities and, more generally, for a network’s stakeholders. The NCR is a tool for
internal and external communication purposes, creating the conditions to mobilise IC. The proposed model
supports the diagnosis of networks by providing CC maps and assessments relevant to their governance and
competitiveness. The NCR depicts company and network CCs, allowing intertemporal comparisons that
facilitate understanding of the effectiveness of the network’s actions and the importance of belonging to it.
Originality/value –This paper represents a first attempt to evaluate, in monetary terms, CCs in a network.
Its value lies in its practical implications. Moreover, the paper investigates IC in applied terms, contributing to
reducing the gap between theory and practice.
Keywords Intangibles, Intellectual capital reporting, Intellectual capital disclosure,
Interventionist approach, Monetary evaluation, Network core competencies
Paper type Research paper
1. Introduction
Over recent decades, there has been a rapid global transition from an industrial to a
knowledge-based economy, in which wealth is created by developing and managing
knowledge (Andriessen, 2004a,b; Ricceri and Guthrie, 2009; Dumay and Garanina, 2013),
commonly termed “intellectual capital”(IC). Numerous practitioners (such as Skandia and
KPMG) (see Mouritsen et al., 2001; Andriesson, 2005) and scholars (see, for instance, Sveiby,
1997, 2001; Pettyand Guthrie, 2000; Bontis, 2001; Andriesson, 2005) have proposed a range of
methods for measuring and evaluating IC. However, despite the growing strategic relevance
of this research topic, there remains limited understanding of how organisations manage,
measure, and report their IC (see, for instance, Guthrie, 2001; Marr, 2005; Chiucchi, 2013).
In particular, the analysis and management of core competencies (CCs), which serve as an
appropriate lens to identify company IC (Andriessen, 2004b), underlines some deficiencies.
The ability of traditional accounting systems to cope with IC is limited (see e.g.
Edvinsson and Malone, 1997; Lev, 2001; Guthrie et al., 2006; Arvidsson, 2011). In particular,
regarding IC in networks, which are forms of collaboration frequently adopted in the
globalised market, there are no established methods for its evaluation, disclosure, and
reporting (Håkansson and Lind, 2004; Håkansson et al., 2014).
Journal of Intellectual Capital
Vol. 18 No. 1, 2017
pp. 189-216
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-01-2016-0014
Received 27 January 2016
Revised 8 July 2016
15 September 2016
30 September 2016
30 September 2016
Accepted 1 October 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
189
The evaluation
of CCs in
networks
Consequently, this is a promising field of research, with some authors calling for further
network-focussed research (see e.g. Håkansson et al., 2014). This paper has been developed
in response, and is premised on the fundamental assumption that CCs characterise
inter-organisational collaborations. CCs can be considered, especially in the case of small- and
medium-sized enterprises (SMEs), as a bundle of IC elements. In particular, the paper develops a
model to evaluate a network’s CCs in monetary terms, thereby adopting the perspective of a
network manager who needs such information to manage and promote the network.
More generally, this work addresses the following research questions:
RQ1. To what extent can CCs be measured in a network?
RQ2. What is the monetary value of CCs in a network?
The paper is empirical in nature, based on a research project initiated in 2012 involving the
Department of Economics and Business Studies of the University of Genoa and the Distretto
Ligure delle Tecnologie Marine (DLTM): the latter is an Italian organisation established to
promote and transfer knowledge within a network of companies within the maritime sector.
The DLTM needed guidance in managing the network’s IC by confirming the key role of
CCs in this context; it, therefore, requested a tool to identify, measure (in monetary terms),
disclose, and report CCs to enable implementation of policies supporting company
relationships and network competitiveness.
This paper has practical applicability for management, practitioners, and academics, and
contributes to advancing the general body of knowledge relating to the measurement and
management of IC in networks. It achieves this by:
(1) evaluating the level of competitiveness, potential, sustainability, and robustness
of CCs;
(2) disclosing the value of CCs;
(3) revealing the problem of value overlaps in a network statement; and
(4) providing a template to report CCs in a network statement.
The paper is structured as follows. Section 2 provides the theoretical background. Section 3
outlines the research objectives and the method chosen to address the issues, and depicts the
research context. Section 4 presents the empirical evidence deriving from the first
application of the network competence report (NCR). Section 5 is dedicated to the paper’s
discussion, and Section 6 considers the conclusions.
2. Literature review
This section summarises the theoretical topics relevant to this paper, which intersect the
literature on IC and on inter-organisational collaboration. The paper’s originality relates to
the intersection in the literature between IC disclosure and the resource based view (RBV),
and its contribution to IC disclosure in inter-organisational collaboration.
Networks
The term “network”iswidely used in a variety of fields (organisational theory, management,
sociology, etc.), generating broad related literature and thereby losing precision (Oliver and
Ebers, 1998).
From this paper’s perspective, networks are created when individuals –whether in the form
of organisations or individuals –interact (Salancik, 1995). Regarding inter-organisational
collaboration, networks arise from the voluntary agreement(s) between organisations to work
together. Thus, they represent a mode of organising (in economic and strategic terms) activities
through inter-organisational coordination and collaboration (Grandori and Soda, 1995).
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