A theoretical framework for assessing managing and indexing the intellectual capital

Date21 October 2013
Published date21 October 2013
DOIhttps://doi.org/10.1108/JIC-03-2013-0032
Pages501-521
AuthorMichele Grimaldi,Livio Cricelli,Francesco Rogo
A theoretical framework for
assessing managing and indexing
the intellectual capital
Michele Grimaldi
Faculty of Engineering, University of Cassino, Cassino (FR), Italy
Livio Cricelli
Faculty of Engineering, University of Cassino and Southern Lazio,
Cassino (FR), Italy, and
Francesco Rogo
FINMECCANICA S.P.A., Group Intellectual Property Management, Rome, Italy
Abstract
Purpose – The purpose of this paper is to propose a theoretical framewo rkwhic h defines, analyses
and assesses the intellectual capital (IC) value drivers (VDs) to increase the value creation of an
organization.
Design/methodology/approach – The proposed framework is composed by an arrangement of
procedural steps. In the first step IC VDs are selected by reason of their relevance and of their
occurrences in recent literature. Then, an assessment of the VDs is carried out on the basis of their
strategic importance and of their inter-relationships with otherVDs. Finally, an index is constructed
from the combination of the static and dynamic characteristics of the selected VDs.
Findings – This integrated framework provides managers with the possibility of monitoring the
response of IC performance to their strategic decisions and helps them to adjust and improve measures
to reach the prefixed objectives. Managers’ perception is the fundamental input to the assessment of
the contribution of the IC to the value creation process.
Originality/value – The modalityof building the proposed synthetic index innovates the assessment
of IC from a quantitative point of view. The framework offers a high degree of flexibility both in
defining and managing IC and in assessing each IC value driver in dependence of any variations
in market scenery and of any external or internal input of innovation.
Keywords Intellectual capital, Assessments, Index, Intellectual capital management, Value drivers
Paper type Research p aper
1. Introduction
During the last two decades, the ever-increasing competitive environment has forced
organizations to devise strategic measures in order to enhance their value creation
process. In addition to the traditional assets, as defined in the classic economic theory,
other powerful resources have shown to be able to successfully impact on firms’
results, the intangible assets ( IAs), which are actually considered as crucial for
reaching the prefixed target ( Brooking, 1996; Edvinsson and Malone, 1997; Hall, 1992;
Stewart, 1997 ). In the opinion of many authors, IAs and intellectual capital (IC)
elements are specific of each organization and are stri ctly dependent on the
organizational context as they play a relevant role univocally interacting with the
tangible assets in achieving a competitive position ( Miller,1994; Teeceand Pisano, 1994;
Peppard and Rylander, 2001; Cuganesan, 2005; Marr, 2005; Cricelli and Grimaldi, 2008).
Academics and practitioners have dealt with several research topics and case studies
about the complexity of IC and have lookedat the investigation of the IC management to
pursue straight and efficient approaches.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
Received 11 March 2013
Revised 28 March 2012
3 April 2013
Accepted 4 April 2013
Journal of Intellectual Capital
Vol.14 No. 4, 2013
pp. 501-521
rEmeraldGroup Publishing Limited
1469-1930
DOI 10.1108/JIC-03-2013-0032
501
Indexing the
intellectual
capital
In this paper, the following research questions are posed:
.Is it possible to assist managers in improving or reorganizing the value creation
process?
.Can managers’ opinions about value concept be taken into account to adjust the
decision process of IC management?
.Is it possible to provide managers with a methodological approach capable of
identifying the IC elements and their relationships?
This paper gives answers to the research questions advanced above by supplying
managers with a framework based on a procedure which defines, analyses and
assesses the IC value drivers ( VDs) to increase the value creation of an organization.
The paper is structured as follows. The next Section 2 provides a background
of the most relevant theoretical issues raised through recent years. The third
Section 3 deals with the development of the framework procedure into its five steps.
Finally, Section 4 concludes and discusses the implications and limitations of
the work.
2. Theoretical background
Many factors have enhanced the importance of IC and most of them are related to the
rapid changing of the world economies, such as the development of the information
technology and the information society; the even more growing impor tance of
knowledge and the knowledge-based economy; the modification of interpersonal
activities and the network society; the emergence of innovation as the prin cipal
determinant of competitiveness.
First research works about IC published in the latest nineties were specifi cally
focused on defining IC, o r better, making distinctions among the proposed
terminologies ( Itami, 1991; Hall, 1992; Edvinsson and Malone, 1997; Nahapiet and
Goshal, 1998; Petty and Guthrie, 2000; Sullivan, 1998). Undoubtedly, disagreement of
opinions, not completely settled yet, were the consequence of the strong conceptual
relationship which, on the one hand, links knowledge, IA and IC, if considered
as intellectual categories, while, on the other hand, makes them differ if looked at as for
their intrinsic essence. In fact, neither IAs are synonym of IC nor IC is synonym of
knowledge, this last including, to complicate things, not only IA knowledge stocks but
also knowledge flows running among IAs. The “complexity of the problem is related to the
number and types of relations and elements in a system” ( Rescher, 1998) and it is
unquestionable that IC and issues about IC show a strong degree of complexity.
2.1 Taxonomy of IC
Attempts to more profoundly understanding IC motivated the construction of different
classification schemata, mostly based on the three well known broad classification
categories advanced by the “first generation” of scholars: human, structural and
relational capital ( Kaplan and Norton, 1992; Brooking, 1996; Edvinsson and Malone,
1997; Stewar t, 1997; Sveiby, 1997 ). In particular, Sveiby (1997) proposed employee
competence, internal structu re and external structure. Stewart (1997) identified human
capital, structural capital and customer capital, while Edvinsson and Malone (1997)
distinguished between human capital and structu ral capital, this last being divided
in turn into organizational capital and customer capital. Several studies investigated
the taxonomy of IC components, most of them showing recurrent similarity. Moreover,
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