Proceedings of the 3rd European Conference on Intellectual Capital

A Modeling Approach to Intellectual Capital Advancement
Eckhard Ammann
Reutlingen University, Germany
Eckhard.Ammann@Reutlingen-University.de
Abstract: Current intellectual capital approaches normally provide an overall picture <strong>of</strong> an organization. This is
<strong>the</strong> case especially in <strong>the</strong> human capital domain, where statistical numbers like <strong>the</strong> percentage <strong>of</strong> employees
having carried out continuous training courses are given as indicators for aptitudes. The same applies to <strong>the</strong>
structural domain, where <strong>the</strong> number <strong>of</strong> innovation processes may be counted. While this may suffice for a static
intellectual capital statement <strong>of</strong> an organization, it clearly does not help for <strong>the</strong> dynamic perspective <strong>of</strong> intellectual
capital advancement. In order to improve <strong>the</strong> non-physical and non-monetary capital <strong>of</strong> a company, you have to
go into <strong>the</strong> details. That means, to enable personal development and knowledge adaption <strong>of</strong> individual
employees, to optimize single business processes and to establish new or improved customer relations – just to
name a few. In this paper, we introduce three operators, which help to model intellectual capital advancement on
each level <strong>of</strong> granularity: refinement, scope restriction, and individualization. Toge<strong>the</strong>r <strong>the</strong>y work along <strong>the</strong> three
dimensions <strong>of</strong> <strong>the</strong> intellectual capital space (IC space), which spans <strong>the</strong> whole <strong>of</strong> intellectual capital viewpoints.
These three operators can be concatenated. It is a meaningful scenario, to first restrict to a working unit and <strong>the</strong>n
individualize to single employees. In effect, repeated applications <strong>of</strong> any <strong>of</strong> <strong>the</strong> three operators lead to changed
viewpoint <strong>of</strong> observation and investigation: from <strong>the</strong> more strategic and resource-oriented view <strong>of</strong> intellectual
capital development to a more operational view <strong>of</strong> knowledge development. This means, that <strong>the</strong> task <strong>of</strong>
intellectual capital advancement is broken down to <strong>the</strong> task <strong>of</strong> knowledge development in <strong>the</strong> company through
<strong>the</strong> application <strong>of</strong> appropriate combinations and sequences <strong>of</strong> <strong>the</strong>se three operators. A suitable conception <strong>of</strong>
knowledge and knowledge dynamics, which supports this operational level task, has already been introduced
before and is shortly recapped in this paper. In addition, three fur<strong>the</strong>r operators, inverse to <strong>the</strong> three already
mentioned, are introduced: coarsing, enlargement and generalization. Applying <strong>the</strong>m in a second phase <strong>of</strong>
intellectual capital advancement helps to regain <strong>the</strong> improved overall picture <strong>of</strong> <strong>the</strong> intellectual capital <strong>of</strong> <strong>the</strong>
organization. To indicate <strong>the</strong> validity <strong>of</strong> <strong>the</strong> approach and in order to be able to give concrete modeling examples,
<strong>the</strong> “Intellectus Model” for <strong>the</strong> measurement and management <strong>of</strong> <strong>the</strong> intellectual capital is chosen as reference
model, to which <strong>the</strong> three operators and <strong>the</strong>ir inverses are applied. Several example scenarios are given in <strong>the</strong>
paper, which show different combinations <strong>of</strong> <strong>the</strong> application <strong>of</strong> <strong>the</strong> operators. These scenarios are shown as
closed paths in <strong>the</strong> IC space.
Keywords: intellectual capital advancement, IC space, IC viewpoint operators, advancement scenarios,
knowledge dynamics
1. Introduction
Intellectual capital <strong>of</strong> a company is defined as all non-monetary and non-physical resources that are
fully or partly controlled by <strong>the</strong> organisation and that contribute to <strong>the</strong> value creation <strong>of</strong> <strong>the</strong>
organisation (Roos 2005). Several domains <strong>of</strong> intellectual capital are normally distinguished. One
<strong>of</strong>ten used distinction is between three domains, namely relational structure (as <strong>the</strong> family <strong>of</strong>
intangible relationships with customers and suppliers), internal structure (including patents, concepts,
models, IT systems and processes) and human competence <strong>of</strong> <strong>the</strong> employees (see Andriessen 2004,
Sveiby 2001, and Roos 2005). The Intellectus Model (IADE_CIC 2005, Bueno et al. 2006) fur<strong>the</strong>r
divides relational structure (into a business and a social component) and internal structure (into an
organizational and a technological component). The model in (Sánchez-Canizares et al. 2007)
especially focuses on organizational culture as additional domain. In Europe, <strong>the</strong> Intellectual Capital
Statement (InCaS, see <strong>European</strong> Commission 2008) allows organizations to establish <strong>the</strong>ir intangible
balance sheet. In Germany finally, <strong>the</strong> so-called “Wissensbilanz” is a structural and procedural model,
that enables SMEs to state <strong>the</strong>ir intellectual capital assets (see Alwert et al. 2008). Those concepts <strong>of</strong>
intellectual capital help to let intangible resources <strong>of</strong> a company be measured, communicated and
interpreted. Economic value creation <strong>of</strong> a company is based on intangible resources to a high and
increasing degree. Advancement <strong>of</strong> intellectual capital <strong>of</strong> a company <strong>the</strong>refore is a key activity for
value creation.
Current intellectual capital approaches normally provide an overall picture <strong>of</strong> an organization. This is
<strong>the</strong> case especially in <strong>the</strong> human capital domain, where statistical numbers like <strong>the</strong> percentage <strong>of</strong>
employees having carried out continuous training courses are given as indicators for aptitudes. The
same applies to <strong>the</strong> structural domain, where <strong>the</strong> number <strong>of</strong> innovation processes may be counted.
While this may suffice for a static intellectual capital statement <strong>of</strong> an organization, it clearly does not
help for <strong>the</strong> dynamic perspective <strong>of</strong> intellectual capital advancement. See also (Mertins et al. 2010) for
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