Per Nikolaj Bukh

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

Abstract 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 firms 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.

Disclosure of information on intellectual capital in Danish IPO prospectuses

Purpose – The purpose of this paper is to examine whether information on intellectual capital (non‐financial information on knowledge based resources) is disclosed in Danish IPO prospectuses. Further, to analyse whether this voluntary disclosure has changed in the period from 1999 to 2001 and to analyse what factors can explain the amount of disclosure in the prospectuses.Design/methodology/approach – The paper uses content analysis to compile a measure of disclosure on each prospectus and statistical analysis to test whether there is an association between disclosure and company type, the existence of managerial ownership before the IPO, the size of the company or the age of the firm.Findings – Based on statistical analysis, it is concluded that the extent of managerial ownership prior to the IPO and industry type affects the amount of voluntary intellectual capital disclosure, while company size and age do not affect disclosure. The results are interpreted in the light of the increasing importance of di...

Constructing intellectual capital statements

This article analyses the development of intellectual capital statements in 19 Danish firms. These statements are discussed in order to show how they work in relation to knowledge-management activities. Based on survey and interview data from the firms that have collaborated in developing intellectual capital statements, the article focuses on why and how these firms embarked on producing such statements. Three brief case studies illustrate the complexities of this type of reporting, which integrates a three-way relationship between narratives/stories, sketches, and metrics.

Developing and managing knowledge through 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.

Valuing the future:intellectual capital supplements at Skandia.

Skandia’s intellectual capital supplements are pioneering forms of communication that inform internal as well as external readers of the attempts to manage and create value from intellectual resources. These supplements to the financial accounting statement communicate not only in numbers but also in stories and illustrations about the challenges facing the firm. They help develop a narrative for the path ahead for Skandia as a “capable” firm that thrives through intellectual resources found in humans, structures and relations. In this paper we discuss how this is possible and we suggest that intellectual capital statements are not only new types of communication; they also anticipate new “contracts” between labour and management where employees are persuaded to help managers craft the strategies to be pursued in the marketplace of the future.

Reading an intellectual capital statement

This paper introduces a framework for analysing intellectual capital statements. It is suggested that the three‐way model of intellectual capital (human, organisations and structural) can be developed in its descriptive and its prescriptive qualities. Another model is offered which relate intellectual capital indicators to the firm’s knowledge strategy. This IC accounting system describes the transactions that allow the firm’s knowledge strategy to be implemented and it prescribes an agenda from which it is possible to monitor the effects around intellectual resources, to qualify and upgrade them and to survey the portfolio of intellectual resources. An example of Systematic Software Engineering’s two intellectual capital statements from 1999 and 2000 is used to illustrate how intellectual capital statements may be read from this perspective.

The relevance of intellectual capital disclosure: a paradox?

Many firms have started disclosing information on intellectual capital. Financial analysts, however, ask for more disclosure related to strategy and often find intellectual capital statement less relevant. Drawing on results from a study of disclosure of information on intellectual capital in Danish initial public offering (IPO) prospectuses, this commentary argues that the perceived irrelevance of intellectual capital is somewhat paradoxical since intellectual capital reports and recent prospectuses share remarkable similarities with respect to the intellectual capital indicators disclosed. Further, the commentary argues that, for intellectual capital disclosure to be perceived as relevant from a capital market perspective, the information should be disclosed as an integral part of a framework illuminating the value creation processes of the firm. The emerging practice with respect to intellectual capital offers such a framework for disclosing the business model of the knowledge‐based company.

Dealing with the knowledge economy: intellectual capital versus balanced scorecard

Purpose – This paper compares balanced scorecard and intellectual capital and finds important differences between their theoretical underpinnings, which suggest that the breath of indicators will work differently in organisations.Design/methodology/approach – Analysing texts about balanced scorecard and intellectual capital, the paper discusses not the obvious similarities – that they are both integrated performance management systems – but four more aspects: strategy, organisation, management, and indicators. Comparing these four dimensions the paper discusses the differences arising from the very different theories of strategy that they presuppose: competitive advantage versus competency strategy.Findings – The paper suggests that the very different notions of strategy that underpin the balanced scorecard and the intellectual capital approach make such comprehensive performance management systems behave in very different ways – the difference between a tightly coupled and a loosely coupled system accoun...

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.

Distribution Channel Strategies in Danish retail banking

Outlines the adaptation process in the distribution channel structure of the retail banking sector as a consequence of the introduction of electronic channels, such as telephone banking, PC banking and Internet banking. Based on responses from 42 retail banks in Denmark, their distribution channel strategies are described and their relation to selected marketing mix elements is examined. Most Danish retail banks attach decisive importance to offering a customer‐friendly PC bank service, whereas fewer of them attach the same importance to telephone, Internet and branch banking. A multiple channel strategy combining several channels is the most popular.