Intellectual capital‐in‐action and value creation

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Abstract
Purpose – This paper investigates the inter-relationships between different components of intellectual capital (IC) and value creation. Design/methodology/approach – A single in-depth case-study of an innovation project within an Australian financial services firm (“TransactCo”) is conducted. Findings – The actual IC inter-relationships and transformations that occurred were different to those originally envisaged by organisational participants, and reflected choices about IC deployment and transformation. Considering IC-in-action, inter-relationships between different IC elements and value creation were found to be pluralistic and temporally contingent. Research limitations/implications – The limitations of the paper are as follows: the use of a single case study design limits its generalisability; the empirical analyses was conducted at a project-level and may not be transferable to other levels of analyses; and a narrow conception of value was utilised, grounded in economic value and shareholder value terms. Extending the analyses conducted to other settings represent future research opportunities. Originality/value – Theoretically, in contrast to prior empirical studies which depict IC inter-relationships as primarily consisting of multiple relations of cause-and-effect in a one-to-one or one-to-many manner, the narrative presented herein shows how IC resources transform each other, often in a pluralistic and fluid manner. In addition, the paper calls for a perspective on IC-in-action. Specifically, more narrative on the use of IC and its deployment should be incorporated within extant models to highlight the contingent and precarious IC and value creation relationship. Firms that fail to consider this adequately may face unintended value destruction consequences similar to those observed at TransactCo.

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