Intelligent Identification of Intellectual Capital(IC) for Value Creation in Knowledge-
intensive Organizations
Student Name: Cai Linlin
Student ID: 11903034R
Program : MPhil
Chief Supervisor: Prof. Eric Tsui
Co-Supervisor: Prof. Benny Cheung
Outline1.Introduction2. Literature review 3. Research questions 4. Methodology 5. Preliminary results6. Significance 7. Publications & Future plan
Introduction-What is IC?
Classification Definition
Human capital The knowledge embedded in people
Structural capital The knowledge embedded in the organization and its systems
Relational capital The knowledge embedded in customers and other relationships external to the organizations
Dumay, J., & Garanina, T. (2013). Intellectual capital research: a critical examination of the third stage. Journal of Intellectual capital, 14(1), 10-25. Guthrie, J., Ricceri, F., & Dumay, J. (2012). Reflections and projections: a decade of intellectual capital accounting research. The British Accounting Review.
Intoduction-4 stages of IC research Stages Features Shortfalls Values Leading
researchers
1st stage Raise the awareness ;Top-down
Lack empirical study
Not specific Sveiby; Edvinsson; Stewart; Kaplan and Norton
2nd stage
Management, measurement, reporting IC ;Top-down
Lack of relevance
Financial outcomes Guthrie; Abeysekera; Petty
3rd stage Critical examine IC research; Bottom-up
-
Worth and importance of the products and services to customers and other stakeholders
Guthrie; Mourisen; Dumay
4th stage
Establish IC eco-system-concern more human beings and environmental issues;
Lack of empirical study
Wellbeing of human can environment
Edvinsson; Wasiluk; Mary; Gary; Dumay
Dumay, J. (2013). The third stage of IC: Towards a new IC future and beyond. Journal of Intellectual capital, 14(1). Dumay, J., & Garanina, T. (2013). Intellectual capital research: a critical examination of the third stage. Journal of Intellectual capital, 14(1), 10-25.
Intoduction-4 stages of IC research Stages Features Shortfalls Values Leading
researchers
1st stage Raise the awareness ;Top-down
Lack empirical study
Not specific Sveiby; Edvinsson; Stewart; Kaplan and Norton
2nd stage
Management, measurement, reporting IC ;Top-down
Stuck into accounting issues; IC frameworks
Financial outcomes Guthrie; Abeysekera; Petty
3rd stage Critical examine IC research; Bottom-up
-
Worth and importance of the products and services to customers and other stakeholders
Guthrie; Mourisen; Dumay
4th stage
Establish IC eco-system-concern more human beings and environmental issues;
Lack of empirical study
Wellbeing of human can environment
Edvinsson; Wasiluk; Mary; Gary; Dumay
Dumay, J. (2013). The third stage of IC: Towards a new IC future and beyond. Journal of Intellectual capital, 14(1). Dumay, J., & Garanina, T. (2013). Intellectual capital research: a critical examination of the third stage. Journal of Intellectual capital, 14(1), 10-25.
Intoduction-4 stages of IC research Stages Features Shortfalls Values Leading
researchers
1st stage Raise the awareness ;Top-down
Lack empirical study
Not specific Sveiby; Edvinsson; Stewart; Kaplan and Norton
2nd stage
Management, measurement, reporting IC ;Top-down
Stuck into accounting issues; IC frameworks
Financial outcomes Guthrie; Abeysekera; Petty
3rd stage Critical examine IC research; Bottom-up
-
Worth and importance of the products and services to customers and other stakeholders
Guthrie; Mourisen; Dumay
4th stage
Establish IC eco-system-concern more human beings and environmental issues;
Lack of empirical study
Wellbeing of human can environment
Edvinsson; Wasiluk; Mary; Gary; Dumay
Dumay, J. (2013). The third stage of IC: Towards a new IC future and beyond. Journal of Intellectual capital, 14(1). Dumay, J., & Garanina, T. (2013). Intellectual capital research: a critical examination of the third stage. Journal of Intellectual capital, 14(1), 10-25.
Intoduction-4 stages of IC research Stages Features Shortfalls Values Leading
researchers
1st stage Raise the awareness ;Top-down
Lack empirical study
Not specific Sveiby; Edvinsson; Stewart; Kaplan and Norton
2nd stage
Management, measurement, reporting IC ;Top-down
Stuck into accounting issues; IC frameworks
Financial outcomes Guthrie; Abeysekera; Petty
3rd stage Critical examine IC research; Bottom-up
-
Worth and importance of the products and services to customers and other stakeholders
Guthrie; Mourisen; Dumay
4th stage
Establish IC eco-system-concern more human beings and environmental issues;
Lack of empirical study
Wellbeing of human and environment
Edvinsson; Wasiluk; Mary; Gary; Dumay
Dumay, J. (2013). The third stage of IC: Towards a new IC future and beyond. Journal of Intellectual capital, 14(1). Dumay, J., & Garanina, T. (2013). Intellectual capital research: a critical examination of the third stage. Journal of Intellectual capital, 14(1), 10-25.
Literature review -The focus of the IC research literature
Total %
External reporting-ICD other reports and media 132 31.2%
Auditing 1 0.2%
Accountability and governance 7 1.7%
Management control/strategy 160 37.8%
Performance measurement 77 18.2%
Other (including general ) 46 10.9%
Grand total 423 100%
Guthrie, J., Ricceri, F., & Dumay, J. (2012). Reflections and projections: a decade of intellectual capital accounting research. The British Accounting Review.
To mange IC, you must locate IC first
(Stewart,1997)
Literature review -The method of identifying IC Most commonly used Method
CA definition IC reporting channels
The purpose of Content analysis in the ICR research
Content analysis of various IC reporting places
Berelson (1952,p. 55) Annual reports; To examine the level/pattern/factors of ICR; Kerlinger (1964, p.544) IC reports;
prospectus; Paisley (1969,p .133) To examine the impact of the ICR on capital market;
Website social media space;
Budd, Thorpe, and Donhew (1967, p.2)
Presentations to the analysts ;
To examine the information gap between the reporter and receiver/user;
Krippendorff (1980)
conference calls; Cole (1988)
Analysts report; Guthrie & Petty (2000) Interviews with
stakeholders
Literature review -The definition of Content analysis Definition
Berelson (1952,p. 55)
Content analysis is a research technique for the objective, systematic, and quantitative description of the manifest content of communication.
Kerlinger (1964, p.544)
Content analysis, while certainly a method of analysis, is more than that. It is… a method of observation. Instead of observing people’s behavior directly, or asking them to respond to scales, or interviewing them, the investigator takes the communications that people have produced and asks questions of the communications.
Paisley (1969,p .133) Content analysis is a phase of information-processing in which communications content is transformed, through objective and systematic application of categorization rules, into data that can be summarized and compared.
Budd, Thorpe, and Donhew (1967, p.2)
Content analysis is a systematic technique for analyzing message content and message handling-it is a tool for observing and analyzing the overt communication behavior of selected communications.
Krippendorff (1980) Content analysis is a research method for making replicable and valid inferences from data to their context, with the purpose of providing knowledge, new insights, a representation of facts and a practical guide to action.
Cole (1988) Content analysis is a method of analyzing written, verbal or visual communication messages.
Guthrie & Petty (2000)
Content analysis is a method that involves codifying qualitative and quantified information into pre-defined categories.
Literature review -The methods of ICR research Most commonly used method
CA definition IC reporting channels-communication contents
The purpose of Content analysis in the ICR research
Content analysis of various IC reporting Channels
Berelson (1952,p. 55)Kerlinger (1964, p.544)Paisley (1969,p .133)Budd, Thorpe, and Donhew (1967, p.2)Krippendorff (1980)Cole (1988)Guthrie & Petty (2000)
Annual reports; IC reports; prospectus; Website social media space; presentations to the analysts ; conference calls; Analysts report; Interviews with stakeholders
To examine the level/pattern/factors of ICR;
To examine the impact of the ICR on capital market;
To examine the information gap between the reporter and receiver/user;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Public IC reports Cover comprehensive IC aspects Not immediate; Biased disclosure;Reporting before empirical study
One-way ;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Public IC reports Cover comprehensive IC aspects Not immediate; Biased disclosure;Reporting before empirical study
One-way ;
Public IPO Prospectus Cover the future IC information , more accurate IC aspects
Biased disclosure; limited audience (investors)
One-way ;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Public IC reports Cover comprehensive IC aspects Not immediate; Biased disclosure;Reporting before empirical study
One-way ;
Public IPO Prospectus Cover the future IC information , more accurate IC aspects
Biased disclosure; limited audience (investors)
One-way ;
Public Website; social media space
Immediate; not structural Difficult to track the IC information
Two-way;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Public IC reports Cover comprehensive IC aspects Not immediate; Biased disclosure;Reporting before empirical study
One-way ;
Public IPO Prospectus Cover the future IC information , more accurate IC aspects
Biased disclosure; limited audience (investors)
One-way ;
Public Website; social media space
Immediate; not structural Difficult to track the IC information
Two-way;
Private Presentations to the analysts ; conference calls;
Disclosure more IC information; More instant; involves in communication
Biased disclosure; Limited audience (analysts & investors); difficult to track due to the unclear laws
Two-way;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Public IC reports Cover comprehensive IC aspects Not immediate; Biased disclosure;Reporting before empirical study
One-way ;
Public IPO Prospectus Cover the future IC information , more accurate IC aspects
Biased disclosure; limited audience (investors)
One-way ;
Public Website; social media space
Immediate; not structural Difficult to track the IC information
Two-way;
Private Presentations to the analysts ; conference calls;
Disclosure more IC information; More instant; involves in communication
Biased disclosure; Limited audience (analysts & investors); difficult to track due to the unclear laws
Two-way;
Private Analysts report Show how analysts use the IC to evaluate the company; assist investment decision makers.
Don’t understand IC in a right way; threaten the information safety ;
One-way;
Literature review -Critical analysis of ICR channels Channel Places Advantages Disadvantages Communicati
on types
Public Annual report Prepare for nearly all the stakeholders
Not immediate; historicalInformation;Biased disclosure;
One-way ;
Public IC reports Cover comprehensive IC aspects Not immediate; Biased disclosure;Reporting before empirical study
One-way ;
Public IPO Prospectus Cover the future IC information , more accurate IC aspects
Biased disclosure; limited audience (investors)
One-way ;
Public Website; social media space
Immediate; not structural Difficult to track the IC information
Two-way;
Private Presentations to the analysts ; conference calls;
Disclosure more IC information; More instant; involves in communication
Biased disclosure; Limited audience (analysts & investors); difficult to track due to the unclear laws
Two-way;
Private Analysts report Show how analysts use the IC to evaluate the company; assist investment decision makers.
Don’t understand IC in a right way; threaten the information safety ;
One-way;
Private Interviews with stakeholders
More communication; the sources of information is flexible ; enrich the understanding of the organizational interactions
Time-consuming to collect data; Two-way;
Literature review-The numbers of ICR channels used
annual report
IC re-ports
prospec-tus
website social media space
presen-tations
Aanlysts report
inter-views
Se-ries1
52 1 3 1 1 5 3
5
15
25
35
45
55
Series1
num
bers
one-way communication
two-way communication
0 10 20 30 40 50 60 70
Series1
Literature review -The methods of ICR research Most commonly used method
IC definition IC reporting channels Inference VS The purpose of Content analysis in the ICR research
Content analysis of various IC reporting places
Berelson (1952,p. 55)Kerlinger (1964, p.544)Paisley (1969,p .133)Budd, Thorpe, and Donhew (1967, p.2)Krippendorff (1980)Cole (1988)Guthrie & Petty (2000)
Annual reports; IC reports; prospectus; Website social media space; presentations to the analysts ; conference calls; Analysts report; Interviews with stakeholders
To examine the level/pattern/factors of ICR;
To examine the impact of the ICR on capital market;
To examine the information gap between the reporter and receiver/user;
Literature review-Content analysis & ICRMain purposes Findings Good Bad
A1: To examine the level/pattern/factors of ICR
Relational capital is the most reported; there is no framework for IC reporting; be low and in qualitative rather than quantitative form
Raise the IC awareness (mission accomplished )Facilitate the work of standard
Mislead understand IC ;Stuck IC into frameworks and accounting;
Literature review-Content analysis & ICRMain purposes Findings Good Bad
A1: To examine the level/pattern/factors of ICR
Relational capital is the most reported; there is no framework for IC reporting; be low and in qualitative rather than quantitative form
Raise the IC awareness (mission accomplished )Facilitate the work of standard
Mislead understand IC ;Stuck IC into frameworks and accounting;
A2: To examine the impact of the ICR on capital market
Highly significant effect for the ICD ;Good news increases share price and bad news decreases share price; Internal capital (not relational) has the greatest impact on share price
Examine the IC disclosure critically
Still use the annual reports
Literature review-Content analysis & ICRMain purposes Findings Good Bad
A1: To examine the level/pattern/factors of ICR
Relational capital is the most reported; there is no framework for IC reporting; be low and in qualitative rather than quantitative form
Raise the IC awareness (mission accomplished )Facilitate the work of standard
Mislead understand IC ;Stuck IC into frameworks and accounting;
A2: To examine the impact of the ICR on capital market
Highly significant effect for the ICD ;Good news increases share price and bad news decreases share price; Internal capital (not relational) has the greatest impact on share price
Examine the IC disclosure critically
Still use the annual reports
A3: To examine the information gap between the reporter and receiver/user
Disclosure on intangibles is higher than the level of this information is used;
Facilitates the work of standard setter;Increase the relevance of information disclosure
Ignore the information safety
Literature review -Content analysis & ICR
Main purposes
A1 To examine the level/pattern/factors of ICR
A2 To examine the impact of the ICR on capital market
A3 To examine the information gap between the reporter and receiver/user
A1 A2 A3
Series1 59 5 3
5
15
25
35
45
55
65
num
bers
Research questions 1
How to identify the information gap between the organization and stakeholder /potential stakeholders through the two-way communication channels?
Literature review -The process of content analysis in the IC research
qualitative
quantitative
Good
bad
words
sentence
phrase
Literature review -Critical analysis of manual CA in ICD research IC terms list Disadvantages Coding rules Disadvantages Unit of analysis Disadvantages
IC triple model –Guthrie and Petty (1999)
Academic IC terms list and classification limits the diversity of practical IC information
-None disclosure -Obscure disclosure-Immaterial disclosure
The coding rules mislead the IC disclosure types; The functions of them are still in IC disclosure or not and measuring IC or not
-Word-phrase-sentence
Too small unit of analysis (word; phrase) will convey not enough IC context; too large (pages) will make the context blur Keywords
list – Bontis (2003)
-qualitative disclosures –quantitative disclosure
-Paragraph-page
-historical information-Forward-looking
-events IC index with explanation Schneider & Samkin (2008) -Good
-Bad-Neutral
Time-consuming
Literature review -Critical analysis of other content analysis methods
Methods types Advantages Disadvantages
Electronic search (Bontis, 2003)
Semi-automatic Save time and labor
(1)Difficult to recognize the synonyms;(2)Context of the keywords is ignored;(4) Fail to recognize the IC critically
Software ”Concordance” (Oliveras et al. 2008)
Automatic Save time and labor
(1)The accuracy is quite low(2) Fail to recognize the IC critically(3)Context of the keywords is ignored
Off-the-shelf tool “Factiva” (Lee& Guthrie, 2010)
Third party-aided method
Save time and labor
Bottom-up to identify the practical IC terms
(1)Difficult to be used in the public domain(2)The context is ignored(3)The context is ignored
Save time and labor
Research Questions 2
How to develop an intelligent mechanism for identifying IC ?
Methodology 51 IC reports
from the Banks
bad
Map IC keywords that describe IC elements with IC triple model
Good
Two –way communication
materials IC
taxonomy
Identify IC
Extract IC elements r
IC events
Intelligent tool
Neutral
IC events summarization
Existing situation
Expecting situation
Preliminary results
IC-related keywords about “training”
Human Capital Structural capital Relational capital
Employee/Staff Program Client
Specialist Courses Relationship
Skill Initiative Management school Full-time Technical External
… … …
Preliminary results
Training
Operator
Content
Internal; external; online
Full-time; employee; manager; specialist
Monitor; professional
Participant
Type
Place
Center; management
school
Skill; course; Initiatives
Preliminary resultsSample texts from websites Identified category Entity
Good An integrated community is cultivated by providing lifelong learning opportunities for people with mental disabilities, and encouraging social participation, during the program, bank employees have volunteered to tutor various institute courses including interpersonal skills and job interview techniques
Participant: mental disabilities Operator: employeesContent: courses; interpersonal skills; job interview techniques
Neutral HSBC Graduate Bermuda Development Program (GDP) is a two-year program which provides accelerated training and practical business experience.
Content: practical business experience
Bad HSBC staff training cut by 15% in past year. Participant: staff
Critical analysis of my methodology
Advantages Disadvantages Identify the practical IC terms Time- consuming in terms of IC
summarizationUnderstand IC in the context Intelligent tool far mare
perfect, results also need to be reviewed
Recognize the critical IC information
The taxonomy is difficult to be used in other industry
Significance of my research
Significance How to reach the goal
Recognize the critical IC information automatically
Intelligent mechanism
Increase the relevance of IC by communicating with the stakeholders
Examine the existing (good & bad) & expecting (good & bad) IC management through collecting data from the two-way communication channels
My future plan Months Plan Detailed action
1 Data collection 1. Identify the participants 2. Identify the materials that can be
used to analysis3. Compile the data 2
3 Prepare for a Journal/conference paper
1. Construct the paper structure 2. Modification and summation 4
5
6 Thesis writing and the final examination
1. Construct the thesis structure2. Writing 7
8
9
10
11
12
Publications
• Cai, L., E.Tsui, & C.F.Cheung. (2013). A Taxonomic approach to the identification of Intellectual Capital from company reports. Paper will present at the International conference on Software Engineering and Service(System)Sciences.
• Cai, L., E.Tsui, & C.F.Cheung. (2013). A Critical Analysis of Intellectual Capital Reports in The Banking Industry from 1994 to 2011. Paper abstract is accepted at the International Conference on Intellectual Capital, Knowledge Management and Organizational Learning (ICICKM).
Thank you very much!
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