A Study on the Relations Between Organizational Identity and Intellectual Capital: Empirical Evidence in New Technology Based Firms at Madrid Science Park

A Study on the Relations Between Organizational Identity and Intellectual Capital: Empirical Evidence in New Technology Based Firms at Madrid Science Park

Eduardo Bueno Campos (Universidad Autónoma de Madrid, Spain), Mónica Longo Somoza (Universidad Complutense de Madrid, Spain) and M. Paz Salmador (Universidad Autónoma de Madrid, Spain)
DOI: 10.4018/978-1-61520-875-3.ch004
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Abstract

This chapter studies the relations between the emergent concept of Organizational Identity and the concept of Intellectual Capital. Specifically, the chapter focuses on the idea that when new technology-based firms develop the social process of construction of their Organizational Identity, at the same time they develop the social interaction needed to define variables of their Organizational Capital. This proposition is grounded in a theoretical review of the concept of Organizational Identity and Organizational Capital in the Intellectus Model, and it is empirically tested in five case studies of new technology-based firms created at Madrid Science Park. Finally, the limitations and suggestions for future research as well as conclusions of the study are presented.
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Introduction

Nowadays knowledge has become a key asset for firms to manage in order to gain a sustainable competitive advantage. The organization's environment changes quickly and knowledge is a critical factor to take advantage of the opportunities of these changes. Authors such as Conner and Prahalad (1996), Grant (1996), Kogut and Zander (1996) and Spender (1996), among others, have developed the Knowledge-based Theory of the firm remarking the relevance of knowledge as a resource and the view of the firm as an entity that stores knowledge. In this current knowledge-based economy, new technology-based firms (NTBFs) have a relevant role. In this chapter we analyze some of the dynamics developed by these firms. We focus on the process developed by the NTBFs created at Madrid Science Park to construct their Organizational Identity and how, at the same time, they construct their Intellectual Capital, and more specifically their Organizational Capital. In the area of the Organizational Identity, this concept has been studied as a key factor in the process of strategic change (Glynn, 2000; Nag, Corley & Gioia, 2007; Scott & Lane, 2000). However, the relation between the process of construction of the identity of a recent founded firm and its Intellectual Capital has not been explored enough yet.

When people commit themselves with organizations and contribute with their knowledge, organizations acquire this knowledge which can become technology if it is developed and transmitted. Therefore, individual knowledge can be transformed into social or collective knowledge and shared by the members of an organization when transferred through oral or written language (Argyris and Schön, 1978; Bueno, 2005; Cook and Brown, 1999; De Geus, 1997; Quinn, 1992; Spender, 1996; Von Krogh and Roos, 1995). Following the autopoiesis theory (Maturana and Valera, 1984), two prerequisites are required to create and develop organizational knowledge: People need to interact to allow communication; and a self-description of the organization must exist. Albert and Whetten (1985) proposed the first definition of the term “Organizational Identity”, proposing that it is a self-reflective question (Who are we as an organization?) that captures central, enduring and distinctive features of the organization. From an interpretive paradigm, Organizational Identity is constructed by members of an organization through the mentioned interaction in order to agree a set of meanings about “who they are as organization”, that is, they develop a social process of self-description which constructs their Organizational Identity (Gioia, 1998). Hence, the development of organizational knowledge and the construction of Organizational Identity share two core elements: interaction to allow communication among members; and a self-description of the organization. Besides, when members express the central characteristics of their organization, they are creating filters to select what knowledge is and what it is not, and they are also creating guidelines to coordinate opinions, practices, decisions, acts, and strategies (Brown and Humphreys, 2006; Bürgi, Roos y Oliver 2002; Bürgi and Oliver 2005; Dutton and Dukerich, 1991; Gioia and Thomas, 1996; Nag, Corley and Gioia, 2007; Reger et al., 1994).

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