Transcript Kansidian otsikko

Università Roma TRE
March 19th 2015
Value creation in the
knowledge economy
Prof. Aino Kianto
School of Business and Management
Lappeenranta University of Technology
[email protected]
Background
• Organizational performance is increasingly grounded on knowledgerelated issues
• Managerial recognition
• 90% of managers in SF, RU and CH companies feel that
knowledge is a key competitive asset for them (Kianto et al. 2011;
Andreeva et al. 2011)
• Finnish companies estimate that 80-95% of value creation is based
on knowledge and competences (IC Partners 2004)
• 99% of managers in Finnish growing and profitable companies
such companies regarded knowledge as essential for their
competitiveness However, only 1/3 of these companies were
satisfied with their ability to leverage their knowledge assets.
(Karuluoto 2006)
Knowledge economy
− Knowledge is the key factor of production
− Intangibles (e.g. Brand) create a significant share of value
added
− Knowledge content of goods, services and processes is high
− Knowledge is an important product in itself
− Economic laws have changed
− Ownership of knowledge is problematic
− Intangibles can be used for multiple purposes
simultaneously
− Investments are risky
− Nature of workforce has changed: knowledge workers
− Novel types of organizations and management methods
The knowledge-based view of
the firm
− Knowledge stocks and capabilities for managing them are the
key value drivers
− The nature of knowledge impacts its transferability and
appropriability
− Knowledge is subject to economies of scale and scope and
increasing returns
− Knowledge is dispersed
− Individuals are intentional and intelligent agents
− Firm = “a social community of voluntaristic action specializing in the
speed and efficiency in the creation and transfer of knowledge”
− Knowledge cannot be fully managed in the same sense as other
types of resources; its management more resembles the creation of
suitable contexts and cultivation.
− Social capital as a coordination mechanism instead of authority
(e.g. Grant (1996), Kogut & Zander (1996), Spender (1996), Foss (1996), Von
Krogh (2000), Nonaka (1995)
Knowledge-based issues and
firm performance
• The two key academic discussions addressing knowledge-based
value creation in organizations:
• Intellectual Capital (IC)
• Knowledge Management (KM) literatures
• However, very few earlier studies systematically combining these
approaches to examine the key knowledge-related factors impacting
value creation in firms
• => How do IC assets and their management practices interact to
create value?
Intellectual capital literature
− Focuses on intangible resources that contribute to value creation (e.g.
Edvinsson & Malone 1997; Sullivan 1998)
− “knowledge-based resources that contribute to the sustained
competitive advantage of the firm”
− “knowledge that can be converted into profits”
− Typically divided into three categories: human, structural and relational
capital (e.g. Bontis 2001; Guthrie 2001)
− The IC literature helps in identifying the kind of intangible resource stocks
there are in firms and in assessing their level
− HOWEVER
− Are the 3 elements sufficient?
− Renewal capital, trust capital, entrepreneurial capital?
− What about the utilization and management of the resources?
− => KM literature
Knowledge management literature
− KM focuses on the processes and practices for dealing with knowledge (e.g.
Von Krogh 1998; Heisig 2009; Kianto 2011)
− “identifying and leveraging the collective knowledge in an organization to
help the organization compete”
− ”systematic handling of knowledge and potential knowledge within an
organization”
− ”increasing organizational value creation through systematically
developing its knowledge processes and increasing its strategic
knowledge resources”
− A plethora of more specific research foci: knowledge processes, contextual
issues, tools, knowledge workers, etc.
− Knowledge management practices = conscious and intentional management
activities aimed to support efficient and effective utilization of knowledge for
organizational benefit (Foss & Michailova 2009; Andreeva & Kianto 2012)
− A variety of KM practices identified in the literature, spanning multiple functions
of the firm and employed in idiosyncratic bundles
− HOWEVER
− Rarely addresses what exactly is being managed
The research project:
”Intellectual Capital and Value Creation”
− Examines the current state of IC stocks and KM practices, and how
these interact in firms’ value creation
− Funded by Tekes (the Finnish Funding Agency for Technology and
Innovation)
− Duration 2013-15
− Survey research strategy
− Partners in 8 countries
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Lappeenranta University of Technology, Finland (The Core Team)
University of Rome 3, Italy
Hong Kong Polytechnic University, China
Deusto Business School, University of Deusto, Spain
St.Petersburg University Graduate School of Management, Russia
Educons University, Serbia
AUniversidade Lusiada, Portugal
Academy of Economic Studies, Bucharest, Romania
The overall research model
COMPANY AND
ENVIRONMENTAL
CHARACTERISTICS
INTELLECTUAL CAPITAL
ASSETS
ORGANIZATIONAL
PERFORMANCE
KNOWLEDGE
MANAGEMENT
PRACTICES
•Data source:
•= survey data
•= publicly available databases
and survey data
Intellectual capital assets
− Human capital (employee skills, motivation, expertise)
− Structural capital (organization’s information systems, tools, facilities,
databases, documents)
− Internal relational capital (collaboration and mutual understanding within
the organization)
− External relational capital (collaboration and mutual understanding with
key external parties)
− Renewal capital (organizational creativity, learning and possession of upto-date knowledge)
− Trust capital (the climate of trust existing in intra- and inter-organizational
relationships)
− Entrepreneurial capital (risk-taking, intiative and identification of new
opportunities by the organization)
Intellectual Capital - National
differences
5.00
4.00
3.00
2.00
1.00
Internal
relational
capital
External
relational
capital
Finland
Structural
capital
China
Human capital Renewal capital Entrepreneurial
capital
Italy
Russia
Spain
Knowledge management practices
− Strategic KM practices (the strategic planning and implementation
activities related to the knowledge-based assets in the firm)
− KM leadership (supervisory behaviors that support a knowledge-friendly
culture, e.g. tolerance of mistakes, encouragement of active questioning)
− Knowledge protection (protecting strategic knowledge by formal and
informal means)
− Human Resources Management practices (recruitment & selection,
training & development, performance appraisal, compensation)
− Learning mechanisms (means by which knowledge and skills are
collected, shared and utilized, e.g. mentoring)
− ICT practices (utilization of information technology for information search,
analysis and distribution)
− Organization of work (division of decision-making authority, enabling
employee interaction, integration of heterogenous expertise)
KM practices - National differences
5.00
4.00
3.00
2.00
1.00
KM
leadership
Knowledge Strategic KM
protection
Finland
HRM recruiting
HRM HRM HRM Learning
IT practices
training & performance compensation mechanisms
development appraisal
China
Italy
Russia
Spain
Work
organizing
How about the ”bottom line”?
(Finnish firms)
5.00
*
*
*
4.18
3.95
4.00
*
3.94
3.46
3.38
3.25
3.00
2.00
1.00
* positive siginificant correlation with ROE or ROA 2013
2.73
3.57
Conclusion
− In the current knowledge economy, a significant portion
of value creation is due to knowledge
− Knoweldge-based value creation is due to
− Intellectual capital
− Knowledge management practices
− These issues differ between companies and contexts,
and can be reliably assessed and systematically
developed