Organisational culture and the value of prioritisation of a firm's intellectual capital : towards a conceptual framework

Abstract

Ulrich defined intellectual capital as Competence x Commitment. The model was later extended to include Control as a key ingredient to measure and leverage intellectual capital. In an earlier paper, we expanded this model to include two additional dimensions, Creativity and Culture, and defined the relationship between intellectual capital and the following five critical variables: Competence, Commitment, Control, Creativity, and Culture. We showed how the interrelationships between these variables can help firms to define and describe their intellectual capital assets. In this paper, we focus on conceptually exploring organisational culture and its impact on building a strong organisational foundation for intellectual capital. In particular, we focus on the collective dynamics of the type of organisational culture and the characteristics and volatility of the industry in which the firm operates, and its influence on a firm’s ability to develop and leverage its intellectual capital. Underlining the increasingly critical strategic importance of tacit knowledge and resources in competitiveness and sustaining competitive advantage, this paper provides a framework that CEOs and senior managers can use to identify and prioritise the value of intellectual capital to their firm based on the organisation’s culture and industry characteristics in which the firm operates. In concluding we draw together various convergent strands from associated research streams, and present a 2x2 matrix conceptualising intellectual capital complexity in relation to the firm’s level of competitiveness. In this paper we seek to preliminarily explore, as well as encourage additional research to further develop and test this framework in order to establish the interrelationships between organisational culture and intellectual capital.