IC Management: Explaining the Gap between Theory and Practice

Background

IC plays an important role in companies’ and other organisations’ value creation (e.g. Carlucci et al., 2004; Skoog, 2003). Furthermore, the competitive advantage and success of companies (e.g. productivity, growth and performance) depends heavily on their ability to manage their IC (e.g. Bontis, 1998; Chen et al., 2004; O’Regan & O’Donnell, 2000; Teece, 2000). It is suggested that more than half of the value created by a company comes from the management of IC (e.g. Dzinkowski, 2000). Other kinds of benefit obtained from the management of IC are profit generation, strategic positioning, customer loyalty, cost reductions and improved productivity (Harrison & Sullivan, 2000). According to the literature IC and its management are important for companies. Thus, a possible explanation for the gap (i.e. companies are not applying the IC management models) may be that managers do not consider IC important as such and therefore do not need any IC management models. IC may not after all be important in terms of its value and effect on productivity and profitability. It is also questioned whether managers even wish to have tools for IC management.