Mosquera, comunicación personal, 16 de noviembre de

Intellectual capital arises through the accumulation of human, internal and external assets, and when addressing intellectual capital it is essential to determine its level of value and positioning in the hierarchy of priorities within the organisation. The focus of question 21 and 32 was on the issue of where value resided in the business units.

Several authors (e.g. Prahalad and Hamel, 1990; Drucker, 1994; Lloyd, 1996; Quintas et al., 1997; Teece, 1998) point to the importance of employee knowledge and refer to it as an organisation‟s most precious asset. Value resides not in things, but in knowledge, thus stressing the importance of intellectual assets (Prahalad and Hamel, 1990). As no business can operate without the knowledge of its employees, the intellectual capital contributed by those who work in an organisation is of considerable value. Value contribution also comes from external connections, such as customers

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Where would you say the value of the company resides? 2

and suppliers, and working along side other organisations. The value of customers is emphasised by a number of authors (Kanter, 1996; OECD, 1996; Teece, 1998).

The chief executives agreed that the real value was in the contribution made by their employees. A few chief executives acknowledged that value also resided in their products, customers, physical assets, brands and processes, thus reinforcing the input made by employees. This signals recognition by them that it is through employees that businesses grow and flourish, and that the contribution they make has considerable value. In general the views of the chief executives reflected those of the authors referred to above. It was clear that the chief executives are aware of the importance of the contribution by employees to the business units. They also acknowledge there is a value contribution through connections with external sources.

Although acknowledging the value contribution of employees and from external sources, this recognition did not really relate to their perception of value in the business sense. This was evident when asked about processes to indicate where value resides, resulting in the identification of connection. Comments relating to the monetary perspective were in many ways linked to the value contribution of employees because it is through their activities that the monetary value is created, and around monetary activities it is usual to have in place a number of systems and processes. Throughout the interviews reference was made to a range of systems and processes that were in place covering many areas of the organisation. However, virtually no processes were identified that could be directly linked to attributing value to intellectual capital.

Viewing value-attributed processes from this perspective, it could be said that systems and processes were present, but it is evident there were none that directly related to determining the sources of the value creation from an intellectual capital perspective. Although there is no direct match with the inclusion of systems and processes in the Model, there was a link can be identified through the approach taken for the development of products and brands and the operational activities of the business units. The Model illustrates the organisational vision as being one of generating wealth. It was acknowledged by the chief executives that the value potential of the business units was principally derived from the input of employees and therefore they were the source of wealth generation.

5.1.3 Management of Intellectual Capital

Question 43 inquired about a strategy for managing intellectual capital. The intellectual capital of an organisation is critical to its future success, therefore its management should form an integral part of the corporate plan. Maximum potential is gained through taking a holistic perspective of an organisation‟s intellectual capital to maximise its full potential (Clarke and Rollo, 2001; Carnerio, 2000; Fletcher et al., 2003; Rastogi, 2003). The approach taken by the Dow Chemical Company to instigate the process for management of its intellectual capital was one of linking the business strategy to the organisation‟s intellectual capital (McConnachie, 1997). Inclusion of intellectual capital in an organisation‟s strategy is also the view of other authors (e.g. Stewart, 1997; Quintas et al., 1997; Joia, 2000; Marti, 2003). The level of recognition of the importance of intellectual capital is a determinant of performance (Riahi-Balkaoui, 2003). Therefore, as an organisation‟s most valuable asset, it would appear to be logical for intellectual capital to be an integral part of an organisation‟s strategy.

The chief executives were aware of the need to maintain a competitive position, and acknowledged there was considerable value in the technical knowledge and expertise within their businesses that could be further exploited to provide benefit for all involved. Responses about management of intellectual capital tended to be vague at times. There was no explicit evidence linking the knowledge of employees with knowledge held by the organisation, or with knowledge from external sources. Nor was there real evidence of recognition given to intellectual capital being integral to the effective operation of the business and its source of wealth. This indicates that CHH was not taking a holistic view of the intellectual capital available to it.

Managing the intellectual capabilities of the organisation to maximise its full potential is of considerable benefit (Clarke and Rollo, 2001). The research revealed no specific evidence of a deliberate strategy for the management of intellectual capital, either at the corporate level, or in the business units. As a result there is no direct alignment with corporate strategy in the Model. The principal reason for managing intellectual capital is to support the corporate strategy by ensuring that all knowledge available to an organisation is directed to the fulfilment of its vision. Although the knowledge contribution of people is recognised by Carter Holt Harvey taking a holistic perspective of the value of its intellectual capital has yet to be fully acknowledged.

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How does the company manage intellectual capital, i.e., is there a strategy in place to manage intellectual capital?