Bernard Marr

Towards a definition of a business performance measurement system

Purpose – Scholars in the field of performance measurement tend to use the term business performance measurement (BPM) systems without explaining exactly what they mean by it. This lack of clarity creates confusion and comparability issues, and makes it difficult for researchers to build on one an each others work. The purpose of this paper is to identify the key characteristics of a BPM system, by reviewing the different definitions of a BPM system that exist in the literature. This work aims to open a debate on what are the necessary and sufficient conditions of a BPM system. It is also hoped that a greater level of clarity in the performance measurement research arena will be encouraged.Design/methodology/approach – The performance measurement literature is reviewed using a systematic approach.Findings – Based on this research, a set of conditions of a BPM system has been proposed from which researchers can choose those which are necessary and sufficient conditions for their studies.Research limitatio...

Why do firms measure their intellectual capital

It is now generally believed, within the current literature, that an academic and practitioner focus on intellectual capital (IC) is important and that the measurement of a companys intangibles provides real business benefits. However, it is essential for researchers in the field of IC to be able to justify these newly formed theoretical assumptions through rigorous empirical testing. This paper reports on the results of a systematic investigation into the theoretical underpinnings of why firms measure their IC and existing empirical evidence that helps to prove that the measurement of IC is really worthwhile. The paper then critically reviews the state of research evidence in the field. The major finding of this paper is that the majority of research within the IC measurement field is at the theory building stage, and that very little of the proposed measurement theory has yet been fully tested. This paper outlines possible avenues scholars might pursue in order to further the development of the IC measurement field.

The dynamics of value creation: mapping your intellectual performance drivers

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.

BUSINESS PERFORMANCE MEASUREMENT: PAST, PRESENT AND FUTURE

Business performance measurement (BPM) is a fast evolving and diverse research field which features highly on the agenda of academics and practitioners from functions including general management, accounting, operations research, marketing, and human resources. Utilizing a citation analysis this paper identifies the following challenges for the field of BPM. The balanced scorecard seems to be the most influential and dominant concept in the field. Researchers are encouraged to further test and discuss its theoretical foundation and research methodology. The second challenge is to create a cohesive body of knowledge in the field of BPM.

Intellectual capital – defining key performance indicators for organizational knowledge assets

Measuring intellectual capital is on the agenda of most 21st century organisations. This paper takes a knowledge‐based view of the firm and discusses the importance of measuring organizational knowledge assets. Knowledge assets underpin capabilities and core competencies of any organisation. Therefore, they play a key strategic role and need to be measured. This paper reviews the existing approaches for measuring knowledge based assets and then introduces the knowledge asset map which integrates existing approaches in order to achieve comprehensiveness. The paper then introduces the knowledge asset dashboard to clarify the important actor/infrastructure relationship, which elucidates the dynamic nature of these assets. Finally, the paper suggests to visualise the value pathways of knowledge assets before designing strategic key performance indicators which can then be used to test the assumed causal relationships. This will enable organisations to manage and report these key value drivers in todays economy.

The knowledge value chain: how intellectual capital impacts on business performance

This theoretical paper explores the fundamental issue of how knowledge management initiatives impact business performance. Reflecting on the management literature in the fields of knowledge management and performance management enabled the deduction of four basic assumptions, representing the links of a conceptual cause-and-effect framework – the knowledge value chain. Drawing on the resource-based view and the competence-based view of the firm, the paper identifies strategic, managerial, and operational dimensions of knowledge management. The review of performance management frameworks discusses the role of knowledge management in those models. These reflections allow linking knowledge management with core competencies, strategic processes, business performance, and finally, with value creation.

Intellectual capital at the crossroads: managing, measuring, and reporting of IC

This introductory editorial to the special issue “IC at the crossroads: theory and research” explains the rationale and background to the studies. In addition it outlines reasons why the field of intellectual (IC) capital is at the crossroads. It seems that awareness of the importance of IC has been created. It is now the role of researchers as well as practitioners to move to the next level. This next level involves issues around taxonomies as well as research methodologies. In order to move on, precise definitions of concepts such as IC, better justifications of why organizations need to measure and manage IC, and increased clarity about terms such as measurement, assessment, or valuation are needed. In addition, more rigorous research methods are needed in order to test and validate existing theories in the field.

Intellectual capital and knowledge management effectiveness

Building on the complexities of organizational knowledge creation the paper explores the alignment of knowledge management practices with the epistemological beliefs of individuals or groups in organizations. A pan‐European research project investigated individual’s philosophy about truth, knowledge and the optimum approach of knowledge creation. These individual viewpoints and requirements are then contrasted with the knowledge management practices implemented in organizations. The results highlight significant misalignment between knowledge management requirements in epistemological terms and individual’s perception of organizational knowledge management activities. The paper claims these differences lie at the heart of problems companies experience with extracting value from knowledge management initiatives. The paper suggests ways of identifying and evaluating resource transformations in organizations, in order better to understand and manage knowledge creation to grow the intellectual capital of organizations.

Reporting on intellectual capital: why, what and how?

Intellectual capital is an important value driver in today’s organizations. Traditional financial statements do not provide the relevant information for managers or investors to understand how their resources – many of which are intangible – create value in the future. Intellectual capital statements are designed to bridge this gap by providing information about how intellectual resources create future value. Intellectual capital statements can be used as tools to communicate the knowledge‐based strategy externally but it can also be used as an internal management tool. In this article we outline the reasons for reporting intellectual capital, introduce the elements of such statements, and present a case example from a Danish mobile phone design company.

The balanced scorecard and intangible assets: similar ideas, unaligned concepts

With their most recent publications on the balanced scorecard, Kaplan and Norton have focused on the learning and growth perspective in an attempt to clarify its constituent parts, as they acknowledge that many organizations struggle with what to include in this perspective. For that reason Kaplan and Norton introduce the concept of intangible assets as the content of the learning and growth perspective. They classify intangible assets into human capital, information capital, and organization capital. However, it is believed that this latest attempt to evolve the balanced scorecard might have an adverse effect. This article outlines how Kaplan and Norton failed to acknowledge the large body of literature on intangible assets and, therefore, produced an inconsistent, incomplete, and potentially very confusing classification of intangible assets.