Intellectual Capital in Knowledge-Intensive Firms: Exploring the Concept and Main Components in Boston's Route 128

Intellectual Capital in Knowledge-Intensive Firms: Exploring the Concept and Main Components in Boston's Route 128

Pedro López Sáez (Complutense University of Madrid, Spain), José Emilio Navas López (Complutense University of Madrid, Spain) and Gregorio Martín de Castro (Complutense University of Madrid, Spain)
DOI: 10.4018/978-1-60566-270-1.ch014
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Abstract

During more than a decade, the literature has provided several intellectual capital models. Nevertheless, empirical evidence is still necessary in the field, and empirically supported models for classification and measurement of intellectual capital are not very common. This work finds the main components or building blocks of an intellectual capital balance sheet, taking the three most common components of intellectual capital (human capital, structural capital, and relational capital) and testing empirically if this grouping of intangible assets is supported by the evidence obtained from a sample of knowledge-intensive firms from Boston’s Route 128. Findings suggest a classification of intellectual capital according to four categories: human capital, structural capital, relational business capital, and strategic alliances.
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Introduction

More than a decade has passed since the publication of the first proposals about the concept and measurement of intellectual capital. Until now, literature has provided several intellectual capital models (Brooking, 1996; Bueno, 1998; CIC, 2003; Edvinsson & Malone, 1997; Kaplan & Norton, 1996; among others). Nevertheless, the need for adapting theoretical and empirical models to the new social and economic trends justifies an effort in improving previous proposals. Empirical evidence is still necessary, and empirically supported models for classification and measurement of intellectual capital are not very common.

At the international level it is accepted that there are three basic components of intellectual capital: human capital, structural capital, and relational capital. In a wide sense, these represent all expressions of firm’s knowledge stocks. This triple nature of intellectual assets is being revisited by different lines of research, which are trying to reconcile the concept of intellectual capital (CIC, 2003).

In this chapter, an empirical research about knowledge-intensive firms is presented, based on the dominant stream of the theoretical proposals of intellectual capital, thus adopting these basic three components:

Human capital, which includes values and attitudes, aptitudes and know-how Structural capital, which contains both organizational and technological elements that pursue integration and coordination within the firm Relational capital, which gathers the value of the relationships that the firm maintains with external agents (close to business activity or with other more distant social agents).

The purpose of this empirical research is to test the previously extant models, and provide a configurative definition of intellectual capital from the different components that it comprises.

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Background: Main Components Ofintellectual Capital And Competitive Advantage

Although for a long time it has been recognized that economic wealth comes from knowledge assets—intellectual capital—and its useful application (Teece, 1998), the emphasis on it is relatively new. Managing the intellectual capital of the firm has become one of the main tasks in the executive agenda. Nevertheless, this work is especially difficult because of the problems involved in its identification, measurement and strategic assessment. In this situation, the models of intellectual capital become highly relevant, because they not only allow one to understand the nature of these assets, but also to carry out their measurement.

The term intellectual capital is used as a synonym for intangible or knowledge assets since the work by Stewart (1991). The fact of calling it “capital” makes reference to its economic roots, because it was described in 1969 by the economist Galbraith as a process of value creation and as a bundle of assets at the same time. The definition by Bueno-Campos (1998, p. 221), “basic competencies of intangible character that allow to create and maintain competitive advantage,” argues how we can tie intellectual capital to the resource-based view (RBV).

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Dedication
Patricia Ordóñez de Pablos
Table of Contents
Chapter 1
Jakob Lauring, Toke Bjerregaard
This chapter deals with the role of language use and knowledge sharing in the context of international subsidiaries. The chapter analyzes the role... Sample PDF
Knowledge Sharing and Sociality: On the Linguistic Embeddedness of Knowledge Exchange in International Subsidiaries
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Chapter 2
Ruth Alas
This chapter analyzes organizational changes and organizational learning in Estonian companies. During the last decades, Estonia has transformed... Sample PDF
Organizational Learning During Changes in Estonian Organization
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Chapter 3
Giovanni Schiuma
Today’s global business is characterised by interconnectedness, interdependence, and an increasing level of complexity that force organisations to... Sample PDF
Strategies for Assessing Organisational Knowledge Assets
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Chapter 4
Poul Houman Andersen
In order to capture market dividends and stay at par with the competition in the knowledge-based economy, firms must constantly develop their skill... Sample PDF
Division of Interfirm Activities in the Knowledge-Based Economy: The Crucial Role of Knowledge Processors
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Chapter 5
Luiz Antonio Joia, Paulo Sérgio da Silva Sanz
Since the early 1990s, research has been conducted in an attempt to establish a viable and reliable manner of measuring the intangible assets, also... Sample PDF
The Conundrum of Valuing a Company's Intellectual Capital: The Role of Taken-for-Granted Indicators
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Chapter 6
Tongo Constantine Imafidon
This chapter avers that over the past years, monolithic organizations, as opposed to multicultural organizations, have been created by many top... Sample PDF
The Multicultural Organization: A Historic Organizational Theory for Gaining Competitiveness in Global Business Environment
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Chapter 7
Arla Juntunen
This chapter focuses on the challenges of developing a knowledge management platform to support organizational memory and knowledge transfer. The... Sample PDF
Developing a Corporate Memory as a Competitive Advantage in the ICT-Sector
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Chapter 8
Corrado lo Storto
This chapter reports the findings of an empirical study whose purpose is to identify the attributes of the organization infrastructure that support... Sample PDF
Learning Organizations or Organizations for Learning? How Small Firms can Learn from Planned and Random Technical Problem-Solving: Implications for Technical Education
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Chapter 9
Ernesto Villalba
The present study explores the relationship between the knowledge-enabling environment and the demand of training in 18 small private companies... Sample PDF
Learning at the Core: Knowledge Management as an Employer Strategy for Lifelong Learning
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Chapter 10
Dimitris Bibikas, Iraklis Paraskakis, Alexandros G. Psychogios, Ana C. Vasconcelos
The increasing pressure of today’s highly globalised markets has lead organisations to continuously compete for knowledge and innovation. Despite... Sample PDF
An Integrated Knowledge Innovation Process Management Model: The Case of Skandia
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Chapter 11
Christian Nielsen, Robin Roslender, Per Nikolaj Bukh
During the last decade, many calls for improving disclosure practices, in relation to intellectual capital and intangibles, have been uttered in the... Sample PDF
Intellectual Capital Reporting: Can a Strategy Perspective Solve Accounting Problems?
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Chapter 12
Huei-Chen Hsu
The main points of this chapter are probing for the combination of information technology and virtual work, and how to change the distribution of... Sample PDF
Managing the Information Technology: Knowledge Transfer in Virtual Teams
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Chapter 13
Miltiadis D. Lytras, Patricia Ordóñez de Pablos
Multinational companies (MNCs) are facing important challenges within the current economic context. Rapid technological changes, the globalization... Sample PDF
The Building of the Intellectual Capital Statement in Multinationals: Challenges for the Future
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Chapter 14
Pedro López Sáez, José Emilio Navas López, Gregorio Martín de Castro
During more than a decade, the literature has provided several intellectual capital models. Nevertheless, empirical evidence is still necessary in... Sample PDF
Intellectual Capital in Knowledge-Intensive Firms: Exploring the Concept and Main Components in Boston's Route 128
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Chapter 15
Weiling Ke, Kwok Kee Wei
This chapter uses organizational learning as a lens to study how firms implement the enterprise system. The core research questions are: What are... Sample PDF
Organizations and Learning Process: Its Antecedents and Consequences in Enterprise System Implementation
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Chapter 16
Kholekile L. Gwebu, Jing Wang
Improvements in technology have led to innovations in training such as Electronic Learning (E-learning). E-learning aims to help organizations in... Sample PDF
The Role of Organizational Environmental, and Human Factors in E-Learning Diffusion
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Chapter 17
Mikel Sorli, Dragan Stokic
Managing of knowledge for innovation in an extended enterprise (EE) environment is a key issue. This in turn requires effective utilization of... Sample PDF
Supporting Innovation Through Knowledge Management in the Extended Enterprise
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Chapter 18
Luis Felipe Luna-Reyes
Contemporary organizations face the challenge of growing and advancing in a complex and changing environment (Johannessen, Olaisen, & Olsen, 2001;... Sample PDF
Government Innovation Through Knowledge Management
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Chapter 19
Marc Henselewski, Stefan Smolnik, Gerold Riempp
Today’s business environment is characterized by highly transparent markets and global competition. Technology life cycles are decreasing due to the... Sample PDF
A Technology-Focused Framework for Integrating Knowledge Management into Strategic Innovation Management
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About the Contributors