Aspectos enunciativos provenientes del discurso

6.0

Introduction

The question being investigated in this thesis is, “How does the approach taken by an organisation in New Zealand to manage intellectual capital align with the characteristics of the Intellectual Capital Management Model?” . This Chapter provides conclusions from the research and their applicability in general to the business environment. It discusses the alignment of the findings with the components of the Intellectual Capital Management Model derived from the literature in Chapter Two (Figure 2.9) and provides a conclusion on the adequacy of the Model. The Chapter considers the contribution made to research into managing intellectual capital and identifies areas for future research.

6.1

Understanding Intellectual Capital

When asked about their understanding of intellectual capital, the chief executives agreed that the combination of components – human capital + internal capital + external capital = intellectual capital – satisfactorily identified intellectual capital. In doing so they strongly emphasised the knowledge contribution of employees. However, it was clear that they needed to give higher priority to the management of intellectual capital by taking a holistic view of all sources of knowledge that had the potential to add value and for the future positioning of the business units as recommended in the literature (e.g. Rastogi, 2003; Hussi, 2004). The conclusion reached is that the chief executives, at the time of the research, had not been sufficiently exposed to the concept of intellectual capital to fully appreciate the considerable benefits to be derived from knowledge, nor that an aggregation of all knowledge available to each business unit generates its intellectual capital. Penrose (1963) emphasises the importance of knowledge as a key contributor to intellectual capital to transform tangible resources into productive services. Therefore, understanding the importance of managing intellectual capital is fundamental for the sustainability of an organisation‟s competitive advantage, and its ability to generate wealth. Increasingly the future success of organisations will be dependent upon their intellectual capital.

The Annual Reports did not identify the vision of CHH but did point to the aims to be achieved, including innovation in order to sustain the future of the organisation. Then, as now, there was a clear relationship between the innovation process and the effective exploitation of intellectual capital for the achievement of organisational aims.

The crux of the Intellectual Capital Management Model (Figure 2.9) points to the importance of managing an organisation‟s intellectual capital. Although most of the components of the Model were evident in the business units at CHH, there was little evidence for the explicit management of intellectual capital. Currently there are no indicators to point to intellectual assets being viewed comprehensively to suggest there is an asset of considerable value that requires management. Given the absence of evidence for intellectual capital management it is hardly surprising that there was a similar lack of corporate strategy in this regard. The literature clearly points to the importance of including intellectual capital in an organisation‟s strategy (McConnachie, 1997; Stewart, 1997; Joia, 2000; and Marti, 2003).

Despite the absence either of formal management or strategies for intellectual capital there were encouraging indications of knowledge-based change. The chief executives recognised the importance of knowledge to their business units. They acknowledged the need for a more proactive approach to codifying knowledge. In general, this entailed the codification of knowledge in systems and processes, but less attention was being given to the capture of the knowledge of individual employees. Accordingly it was admitted that there were knowledge gaps, and that greater attention needs to be given to eliminating those gaps.

Knowledge from external sources was recognised as having considerable relevance and value to the business units. The chief executives were actively networking with contacts in other organisations. They acknowledged the advantages of working collaboratively, and indicated there were partnership associations with various companies. Employees, particularly those who worked directly with customers and suppliers, also valued the networks they had developed, and found them particularly useful when seeking knowledge. There was also a good deal of networking by both chief executives and employees with other business units within CHH.

Furthermore, employees repeatedly expressed an interest in increasing their knowledge, while the chief executives frequently remarked on the skills and competencies of employees and their positive approach to the job. In view of the widely acknowledged connection between the competence of staff and the capability of an organisation, it was encouraging to find the chief executives acknowledging that there was a high level of capability within the business units, one to which the skills and competencies of employees was making a major contribution.

This latter was reflected in knowledge sharing practices, which in turn are vital to the creation of new knowledge, ideas and innovations. At CHH these innovations took the form of new products, services, and processes. On the downside, unfortunately there was little indication of effective processes in place to actively manage the innovation process. This was evident, for example, with regard to organisational patents. Management acknowledged that taking innovations through the patenting process not only gave protection to innovation but also opened up opportunities for licensing innovations to other organisations for the payment of royalties.

In a more positive vein, it is clear that the restructuring of CHH into a number of smaller strategic business units had positive human capital implications. Employees welcomed the opportunity of working within a smaller company environment offering the prospect of having a greater input to the operation of the companies and where they are encouraged to be more innovative. As already indicated, the creation of smaller business units had a positive effect on innovation with the development of new products and improved processes. This can be seen as reinforcing the view of Kanter (1996) that smaller units have a greater propensity to be innovative than larger ones is endorsed by this research. It can be concluded from what has taken place that the setting up of discreet companies within an organisation has considerable merit. One aim of the restructuring was to develop an innovative environment, and both the chief executives and employees had responded positively to the challenges of working in such an environment.

Given that it is virtually axiomatic in management circles that in order to manage it is necessary to measure, it was disappointing to find that there were neither structures nor processes in place to measure intellectual capital. This was not exactly a surprise in the absence of a strategy for the management of intellectual capital, but it was a striking omission in view of the systems and processes in place covering other functions and operational activities. These included the use of

Kaplan and Norton‟s Balanced Scorecard which elsewhere is frequently associated with the measurement of intellectual capital.

Finally, in reiterating that despite its acknowledged importance, intellectual capital was not being managed at Carter Holt Harvey Ltd., it seems likely that the company was not alone in this failing at the time. In fact, any reading of the literature would reveal examples of other companies elsewhere that while exhibiting a number of components of the Intellectual Capital Management Model were nevertheless failing when it came to the effective overall management of intellectual capital.

6.2

Adequacy of the Model

Aspects of the research reveal the need to address the adequacy of the Model (Figure 2.9). Considerable comment was forthcoming about behavioural changes that had resulted from the restructuring of the organisation into smaller business units, changes that were having a positive impact on the operational activity within the business units. Positive behavioural changes were noted by the chief executives, and also by a number of employees, leading to the conclusion that a smaller working environment had the propensity to offer greater opportunities for employees to participate more directly in the operational activities of the business. Employees also commented favourably on the acknowledgement of their contribution to the business units, and in some cases the actual uptake and development of ideas they had put forward. Although CHH had been recognised as an innovative organisation prior to the restructuring, additional positives emerged from the restructuring in the shape of the enthusiasm of employees to pursue the opportunities afforded them, and their desire to help make the business units successful. The inclusion of behavioural change in the Model, as a component of internal capital, signals its importance to the management of intellectual capital.

It was evident from the research that socialisation within the business units was a positive contributor to operational activities, and to ways in which knowledge was increased and knowledge sharing took place. Sharing knowledge was an expectation of the work environment, and this occurred during on-the-job training, at meetings, formal and informal, when networking, and when involved in work-related sports/social activities. Contrary to being seen as time wasting, socialising

has a valuable contribution to make to an organisation‟s operation. Socialisation as a component within internal capital has been added to the Model.

6.3

Research Contribution

This research both confirmed and extended our understanding of issues in the intellectual capital literature. It also provided further evidence of the need to spread the message of intellectual capital management much wider, and in particular to extend it from the academic and research environment to that of the everyday contexts of management and employees in industry. It was a test of theory and practice.

Consequently it is recommended that academics and practitioners work more closely together so that theoretical development and research is more readily transferred into the practitioner world. The importance of intellectual capital to an organisation mandates more formal functional recognition in order that the outcomes can contribute meaningfully to the corporate strategy.

6.4

Future Research

This research provides a number of leads for future researchers into the management of intellectual capital not just in New Zealand, but elsewhere. In addition to general research into the state-of- the- intellectual-capital-management-art, further research is needed into the relevance of existing management skill sets to determine their fit with the skills required for the management of intellectual capital.

There is also a need to investigate approaches being taken, or that can be taken by organisations, to encourage the codification of knowledge and to the extent that it is possible, the knowledge of employees. This can be conducted either as a separate exercise or in conjunction with further research into the respective implications of smaller and larger business structures. Finally, further research is required on issues such as staff training and development, analysis of capabilities and competencies, socialisation, and the measurement of intellectual capital.