Paula Kujansivu

Investigating the value and efficiency of intellectual capital

Purpose – This paper seeks to provide an empirical view of the present state of intellectual capital (IC) in Finnish companies. It also examines the relationship between the concepts value of IC and efficiency of IC.Design/methodology/approach – Calculated Intangible Value (CIV), which measures the monetary value of IC, and Value Added Intellectual Coefficient (VAICTM), which describes how a companys IC adds value to the company, were applied to approximately 20,000 companies per year during the period 2001‐2003 and studied using correlation analysis.Findings – Value and efficiency of IC are described in 11 industries in both SMEs and large companies. The theoretically unclear relationship between the value and efficiency of IC remains vague even after the empirical analysis. Calculating the value of IC in relative terms by dividing the value of a companys IC by the value of its tangible assets was found to be illustrative in comparing different industries.Research limitations/implications – The measure...

Performance measurement systems in the Finnish public sector

Purpose – This paper aims to identify the specific problems faced by the Finnish public sector organizations in designing and implementing performance measurement systems (PMS).Design/methodology/approach – An understanding of the problems is obtained by examining three case organizations in practice. In order to support the analysis of the empirical findings, a review of prior literature on the private and public sector PMSs is carried out.Findings – The design and implementation processes in the Finnish public sector organizations differ significantly from the way they are realized in industrial private sector companies. The four underlying reasons for problems in public sector organizations are the following: there are many stakeholders with conflicting needs; the end products and goals are undefined; there is a lack of property ownership and lacking management skills.Practical implications – By utilizing the results of the study, PMS design and implementation in the public sector can be carried out by...

Is there something wrong with intellectual capital management models

During the recent years the intellectual capital (IC) literature has produced tens of models to support the various IC management (ICM) activities, such as identification, measurement, valuation, acquisition and reporting IC. However, the practice of applying these models seems to be a fairly new issue in many organisations. The gap between research and practice (i.e. not many organisations seem to be applying ICM models) may result from several issues. This paper approaches the gap from two perspectives. First, the paper questions the applicability of ICM models. Second, although IC as a research theme is quite immature many management models that also include some of the aspects of IC have been developed within general management disciplines. Thus, this study examines whether traditional management models may also be suitable for ICM. The two questions are answered by using four single cases in which action research projects were carried out.

How do investments in intellectual capital create profits

This paper aims to determine how investments in Intellectual Capital (IC) are transformed into profits. It is assumed that IC investments first increase the value of IC and the efficiency of using IC, which are then expected to lead to higher productivity and finally to profitability improvements. These relationships are studied by analysing correlations between the results of performance measures representing the above-mentioned factors. The data used comprises information from the financial statements of Finnish companies during the period 2001 and 2003. Overall 60,304 cases are included representing the 11 largest industries in Finland. The analysis is carried out on the level of the whole data set, in different industries and in both SMEs and large companies. The results provide empirical evidence to support some of the assumptions concerning the relationships between IC investments and profitability. However, contrary to expectations, the results showed no linear relationship between investments in IC and profitability.

National intellectual capital performance: a strategic approach

Purpose – The paper concerns the research problem of how to analyse the performance of a knowledge society as a whole, and in particular, of how to analyse national intellectual capital. The paper aims to build a conceptual foundation for national intellectual capital performance, and based on this, to construct a multidimensional measurement system for Finland and to investigate its usefulness.Design/methodology/approach – The framework and measurement system of national intellectual capital performance is constructed on the basis of the intellectual capital and knowledge management research literature. The illustration of the measurement system is carried out using empirical data from various institutions.Findings – The paper argues for the strategic, dialogic and societal measurement of national intellectual capital.Research limitations/implication – There was neither an exact purpose of measurement nor a detailed strategy for the knowledge society to aim at. Because of this, the measurement system ser...

Operationalising intellectual capital management: choosing a suitable approach

Purpose – Intellectual capital (IC) management includes various activities that focus on identifying, measuring, controlling and developing the intangible resources of business. As a concept IC management is still theoretical – the managerial problem is that managers do not know the most appropriate approach for them to operationalise IC management. The purpose of this research is to understand the situation in which a suitable approach to IC management is chosen and factors affecting the choice.Design/methodology/approach – Factors that may affect choosing the approach to IC management are suggested in light of the literature. In addition, three cases in which a suitable approach to IC management is chosen in practice are examined. The main research method used in the cases is action research.Findings – The results may provide support when operationalisation of IC management is relevant. The framework presented can be used as a guideline when deciding how to operationalise IC management in ones own orga...

Intellectual capital management practices in Finnish companies

Not many companies seem to be using the Intellectual Capital Management (ICM) models presented in the literature. The objective is to find out what the current status of ICM is in Finnish companies, how managers wish to develop Intellectual Capital (IC) in their companies and what kind of ICM tools are most desired. The research is carried out by two methods: telephone interviews in 35 companies and case research in 10 companies. The results show that Finnish companies are performing various management activities related to IC as part of different organisational functions. However, a specific ICM activity does not usually exist. Generally, the companies seem to prefer ICM tools designed for the purposes of internal development of IC (e.g. measurement) whereas external IC reporting is not considered important.

Effects of intellectual capital investments on productivity and profitability

The objective is to determine how investments in Intellectual Capital (IC) affect a companys productivity and profitability. The examination is based on a large set of financial statement information covering a three-year period. Time-lagged correlation and regression analyses are used to study the relationships within the whole data set, in different industries as well as in SMEs and large companies. The findings suggest that the short-term impact of IC investments on productivity and profitability is negative. However, the findings also provide support for the earlier research evidence suggesting that investments in IC do yield benefits, but they may come with a delay.

Designing and implementing an intellectual capital management system: applying the Meritum Guidelines in practice

This paper reports a case study on the design and implementation of an Intellectual Capital Management (ICM) system. The paper describes how an ICM system was designed and implemented using the Meritum Guidelines framework in two information management units of the Finnish Tax Administration. The design and implementation process is analysed in the light of previous evidence on business performance management systems in order to learn about issues that are specific in designing and implementing an ICM system. The findings show strong similarities between the two types of management systems. A specific benefit of utilising an ICM framework, the Meritum Guidelines in this case, is related to its ability to identify the strategically relevant factors related to Intellectual Capital (IC).

Using an AHP Rating Model to Select a Suitable Approach to Intellectual Capital Management: The Case of a Not-for-Profit Welfare Service

Although a large number of models and tools for managing Intellectual Capital (IC) have been introduced in the literature, the practical operationalisation of IC management still remains challenging. In particular, how managers can better evaluate and select a proper IC management approach represents a critical issue. Selecting a suitable IC management approach is a complex decision-making problem which involves a set of factors affecting the choice. As many factors should be taken into account in that decision, the problem can be tackled using multi-criteria methods. Through a synthesis of management literature regarding the approaches to IC management and the factors affecting their choice, the paper develops an AHP rating model, which keeps in focus the most meaningful elements to be considered in making decision on IC management. The paper presents the results of the application of the model within a not-for-profit organization.