IC Management: Explaining the Gap between Theory and Practice

IC Management: Explaining the Gap between Theory and Practice

Paula Kujansivu (Tampere University of Technology, Finland)
DOI: 10.4018/978-1-60960-071-6.ch013
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Abstract

The objective of this chapter is to understand why companies do not apply models that are commonly known in the IC literature i.e. to explain the gap between the theory and practice. The general research objective is divided into four research questions taking different perspectives on the same phenomenon: the importance of IC and its management, the applicability of IC management models, the suitability of typical general management approaches for IC management and factors affecting the application of IC management models. The research questions are studied adopting diverse research methods. The empirical material includes interviews, a large amount of quantitative data from the financial statements of companies, and case studies in which action research was used.
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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.

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