The transformation of the organization’s intellectual capital: from resource to capital
| Pages | 610-631 |
| Published date | 10 October 2016 |
| Date | 10 October 2016 |
| DOI | https://doi.org/10.1108/JIC-03-2016-0031 |
| Author | Oksana Lentjušenkova,Inga Lapina |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
The transformation of the
organization’s intellectual
capital: from resource to capital
Oksana Lentjušenkova and Inga Lapina
Faculty of Engineering Economics and Management,
Riga Technical University, Riga, Latvia
Abstract
Purpose –Over the last three decades, the role of intellectual capital (IC) in ensuring an organization’s
competitiveness has increased significantly. The purpose of this paper is to analyse and evaluate the
evolution of the concept of (IC) by showing its transformation from resource to capital, while offering a
new perspective on the structure of (IC).
Design/methodology/approach –The formation and development of (IC) is studied on the basis of
literature review, logical and comparative analysis. The new structural components of (IC) are defined
upon studying the relationships of the relevant concepts and the content of the concept at
organizational level today.
Findings –In the scientific literature, (IC) is mainly viewed as a resource or set of resources an
organization uses for creation of competitive advantage and value. Using the information gathered
about different views on (IC), this study shows the development of the sources of the organization’s
competitiveness: from resource to (IC).
Research limitations/implications –This study offers the authors’view on the nature of
the concept of (IC) showing (IC) as a business asset. The analysis of the concept is focused at
organizational level.
Originality/value –The study explains the differences between the interrelated concepts: knowledge,
competence, performance and (IC). The authors offer an improved definition of (IC) by showing the
evolution of its content and offer their own approach to the structure of (IC) that might facilitate
tracking this asset in the organization’s accounts and promote effective management of the asset.
Keywords Value, Intellectual capital, Intangible assets, Human capital, Resource, Capital
Paper type General review
1. Introduction
The concept of intellectual capital (IC) is complex and multifaceted. There are different
opinions about IC, its elements and structure as well as its role in an organization.
This concept consists of two socially significant words: “intellect”from the Latin
intellectus –mind, intellect, intelligence, thinking ability, comprehension and “capital”
from the Latin capitalis –dominant, chief, basic.
The term “IC”first appeared in a letter written by John Kenneth Galbraith in 1969 to
Michael Kalecki, the economist chief editor. Later Stewart (1991) studied this concept
and offered one of the first definitions. He defined IC as “knowledge, information,
intellectual property, experience –that can be put to use to create wealth”. In the 1990s,
many authors actively focused their research on the nature of IC, its structure and
role in an organization’s activities. Various authors tried to formulate a definition of IC
Journal of Intellectual Capital
Vol. 17 No. 4, 2016
pp. 610-631
©Emerald Group Publishing Limited
1469-1930
DOI 10.1108/JIC-03-2016-0031
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
The research and paper development were supported by the National Research Programme 5.2.
“Economic Transformation, smart growth, governance and legal framework for the state and
society for sustainable development –a new approach to the creation of a sustainable learning
community –EKOSOC –LV”.
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17,4
through different approaches –by including some elements characterizing the concept,
by using the structure of IC and by broadening the concept of knowledge, etc.
Edvinsson and Malone (1997) defined IC as knowledge that can be converted into value.
Whereas Roos et al. (1997) believe IC is the most important source of sustainable
competitive advantages in organizations. Unlike many researchers, Bontis et al. (2000)
are of the opinion that IC is a concept under which all organization’s intangible
resources, as well as their interconnections are classifi ed. Andriessen (2006),
while studying the nature of IC, concluded that the “two dominant metaphors that
form the basis for the concept of IC are “knowledge as a resource”and “knowledge as
capital”and he also “highlights that IC is a metaphor”. In the context of the German
approach of intellectual capital statement (ICS), the term IC is defined as the “existing
knowledge of an organization that is critical to success”(Federal Ministry of Economics
and Labour, 2004).
In the scientific literature and in organizational practices, different views exist on
what IC is and, as in many matters, researchers and entrepreneurs share no common
wording of the definition and structure of the concept; there is no consensus on the
nature of IC. Some researchers define IC as a resource, some researchers believe that IC
is an intangible resource, but some researchers view it as knowledge. However, at
organizational level the nature of this concept has not been explained.
Due to changes in the socio-economic environment and the views on the
management, the view on IC has also significantly changed –from a static to a
dynamic. Within the static approach, IC is viewed as knowledge or a set of knowledge
(Bratianu, 2006; Bontis and Fitz-enz, 2002; Inozemtsev, 1995; Stewart, 1997). Within the
dynamic approach, IC is viewed from the aspect of value creation (Bailesteanu and
Burz, 2008; Gogan et al., 2014; Kianto, 2007; Kianto et al., 2013; Kujansivu and
Lönnqvist, 2009). However, in both cases researchers link the concepts of IC
and knowledge, but do not indicate the differences between these two concepts.
Accordingly, they provide no clear answer to the question: what the essence of the
organization’s IC is and how it differs from the knowledge resources of the organization?
From the dynamic perspective IC is often analysed from the valuation and
measurement aspects. One of the latest developments is the dynamics of IC in long-term
perspective (Edvinsson, 2002, 2013), also at the national level (Lin and Edvinsson, 20 11;
Lin et al., 2012).
In a modern organization, its managerial approaches and investment facilities are
changing along with the growing importance of IC and the changes of its components,
thereby changing the managerial approaches and focusing on value creation.
This study aims to analyse and evaluate the development of IC concept, showing the
transformation from resource to capital, while offering a new perspective on the
structure of IC.
2. The formation and development of the IC
Upon exploring the historical evolution of the concept of IC, the authors conclude that it
is associated with two interrelated views on resources. Consequently, two views on
resources and on the formation of profits and competitive advantages exist in
the theory of economics. One of the views is the resource-based view (RBV) where the
organization’s resources or the resources it can acquire are considered to be the source
of its competitive advantage (Barney, 1986; Itami and Roehl, 1987; Makadok, 2001;
Peteraf, 1993; Rumelt, 1984; Wernerfelt, 1984). The second view is the knowledge-based
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