The rise of the “new economy”, one principally driven by information and knowledge, is attributed to the increased prominence of intellectual capital (IC) as a business and research topic. Intellectual capital is implicated in recent economic, managerial, technological, and sociological developments in a manner previously unknown and largely unforeseen. Whether these developments are viewed through the filter of the information society, the knowledge‐based economy, the network society, or innovation, there is much to support the assertion that IC is instrumental in the determination of enterprise value and national economic performance. First, we seek to review some of the most significant extant literature on intellectual capital and its developed path. The emphasis is on important theoretical and empirical contributions relating to the measurement and reporting of intellectual capital. The second part of this paper identifies possible future research issues into the nature, impact and value of intellectual management and reporting.

Intellectual capital literature review: measurement, reporting and management

Increasingly, researchers in the field of intellectual capital (IC) need to be able to justify the specific research methods they use to collect the empirical data that they examine to support and test opinions regarding the merit of different approaches to managing and reporting IC. Of the various methods available to researchers seeking to understand intellectual capital reporting (ICR), content analysis is the most popular. The aim of this paper is to review the use of content analysis as a research method in understanding ICR and to offer some observations on the practical utility of the method. Further, the paper examines several research method issues relating to the use of content analysis that have been discussed in the social environmental accounting literature, but not as yet in the IC literature, which we believe are relevant to investigations underway in the field of ICR. This paper reports on several developmental issues we have confronted when using content analysis to examine the voluntary disclosure of IC in annual reports by various organisations. The paper also suggests two theoretical foundations for further investigation into the voluntary disclosure of IC by organisations, and suggests why content analysis is well matched to both these theories as a means to collect empirical data to test research propositions.

Using content analysis as a research method to inquire into intellectual capital reporting

Why are a select few service firms better at what they do - year in and year out - than their competitors? For most senior managers, the profusion of anecdotal "service excellence" books fails to address this key question. In this pathbreaking book, world-renowned Harvard Business School service firm experts James L. Heskett, W. Earl Sasser, Jr. and Leonard A. Schlesinger reveal that leading companies stay on top by managing the service profit chain. Based on five years of painstaking research, the authors show how managers at American Express, Southwest Airlines, Banc One, Waste Management, USAA, MBNA, Intuit, British Airways, Taco Bell, Fairfield Inns, Ritz-Carlton Hotel, and the Merry Maids subsidiary of ServiceMaster employ a quantifiable set of relationships that directly links profit and growth to not only customer loyalty and satisfaction, but to employee loyalty, satisfaction, and productivity. The strongest relationships the authors discovered are those between (1) profit and customer loyalty; (2) employee loyalty and customer loyalty; and (3) employee satisfaction and customer satisfaction. Moreover, these relationships are mutually reinforcing; that is, satisfied customers contribute to employee satisfaction and vice versa. Here, finally, is the foundation for a powerful strategic service vision, a model on which any manager can build more focused operations and marketing capabilities. For example, the authors demonstrate how, in Banc One's operating divisions, a direct relationship between customer loyalty measured by the "depth" of a relationship, the number of banking services a customer utilizes, and profitability led the bank to encourage existing customers to further extend the bank services they use. Taco Bell has found that their stores in the top quadrant of customer satisfaction ratings outperform their other stores on all measures. At American Express Travel Services, offices that ticket quickly and accurately are more profitable than those which don't. With hundreds of examples like these, the authors show how to manage the customer-employee "satisfaction mirror" and the customer value equation to achieve a "customer's eye view" of goods and services. They describe how companies in any service industry can (1) measure service profit chain relationships across operating units; (2) communicate the resulting self-appraisal; (3) develop a "balanced scorecard" of performance; (4) develop a recognitions and rewards system tied to established measures; (5) communicate results company-wide; (6) develop an internal "best practice" information exchange; and (7) improve overall service profit chain performance. What difference can service profit chain management make? A lot. Between 1986 and 1995, the common stock prices of the companies studied by the authors increased 147%, nearly twice as fast as the price of the stocks of their closest competitors. The proven success and high-yielding results from these high-achieving companies will make The Service Profit Chain required reading for senior, division, and business unit managers in all service companies, as well as for students of service management.

The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value (Цепочка создания прибыли в сфере услуг: как ведущие компании связывают прибыль и рост с лояльностью, удовлетворением и ценностью)

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The Risk Management of Everything: Rethinking the Politics of Uncertainty

Intellectual capital statements are ‘new’ forms of reporting whose object is knowledge management activities. Based on 17 firms’ work to develop intellectual capital statements, this paper analyses them as managerial technologies making knowledge amenable to intervention. Aspects of actor-network-theory are mobilised to suggest that the intellectual capital statement is a centre of translation, which mobilises knowledge management via three interrelated elements: knowledge narratives, visualisations and numbers. Intellectual capital statements report on the mechanisms put in place to make knowledge manageable. Writing intellectual capital is a local story, which often concerns making knowledge collective and a process of allowing it to be oriented towards organisational ends. In such a story, knowledge is about a firm's capabilities and abilities to make a difference to a user. When writing an intellectual capital statement, firms locate employees, customers, processes and technologies and orient them towards a user. However, the statement as such is a means of ‘dis-locating’ knowledge resources making them amenable to intervention. There are certain broad types of intervention that allows a classification of strategies of intervention to be proposed. These terms are portfolio management, improvement activities and productivity. Such forms of intervention circumscribe the aspiration to transform knowledge from something internal to the person into something that is the effect of a collective arrangement. They allow—through intellectual capital statements—the dark, tacit knowing of individuals to come into the open space of calculation and action at a distance.

Intellectual capital and the 'capable firm': narrating, visualising and numbering for managing knowledge

Constructing intellectual capital statements

On the basis of empirical illustrations from five Danish firms this paper discusses how the objects of intellectual capital statements were constructed. These objects were the activities that defined knowledge management, and the intellectual capital statements monitored these through depicting a particular narrativised strategy for managing knowledge – called a knowledge narrative – and through a monitoring system that reflected the activities set in motion to mobilise the strategy for managing knowledge. Particularly, the paper discusses the idea of knowledge as a narrative. It is suggested that for knowledge to count, it has to be able to produce something. This something is found the value‐to‐the‐user of the products and services.

Developing and managing knowledge through intellectual capital statements

Intellectual Capital Statements – The New Guideline This publication is supplied without charge as long as stocks last. 2 This new guideline for intellectual capital statements is a revised version of the 2000 edition. It is the result of extensive cooperation between researchers, companies, industry organisations , consultants and civil servants and has been coordinated by the Danish Ministry of Science, Technology and Innovation. In the second phase of the project, started in 2001, industry organisations together with around 100 companies and public organisations have tested the original guideline. A research team led by Professor Jan Mouritsen, Copenhagen Business School, has brought together and processed their many experiences. Experience shows that the original guideline concept works well. The new guideline therefore uses the same basic structure, but is expanded with new elements and has been significantly improved in two areas in particular. Firstly, it is based on much greater experience, and instructions and recommendations can therefore be much more concrete, precise and better supported. Secondly, it has been written so that it accommodates a number of special conditions that apply to some companies and organisations. 3 In Denmark, we have a need to secure and develop our prosperity and welfare. We therefore must strengthen Danish companies' ability to compete and use our resources better in the public sector. What this in particular requires is that we become even better at developing and using the knowledge that creates value in future society. Our ability to manage and administer knowledge resources, in short, will determine whether we can release the substantial potential that lies within private companies and public organisations. This new guideline on intellectual capital statements is an important tool in this work. It can support companies and organisations in building up, developing, sharing and anchoring the knowledge that can make their products and services worth more to consumers. In other words, this guideline gives companies and organisations the opportunity to work more systematically and comprehensively with the many initiatives within knowledge management that many companies have already started. The guideline also provides a good basis for communicating knowledge management policies to existing and potential employees, customers, investors and the general public. The new guideline is built on a very solid basis. The first guideline was published in November 2000, and since around 100 very different companies have used the guideline to prepare intellectual capital statements. The guideline principles have therefore …

Heine Thorsgaard Larsen

Papers

Intellectual capital and the 'capable firm': narrating, visualising and numbering for managing knowledge

Constructing intellectual capital statements

Developing and managing knowledge through intellectual capital statements

Intellectual capital statements: the new guideline

The 2nd wave of knowledge management: The management control of knowledge resources through intellectual capital information