Intellectual capital in a recession: evidence from UK SMEs

Abstract

PurposeThe aim of this paper is to present the findings of a qualitative investigation of intellectual capital (IC) in the engineering industry in the UK within the context of a recession.Design/methodology/approachDue to the fact that IC involves tacit knowledge which can often be “non‐verbal” or in some cases “non verbalable”, intuitive and unarticulated (Hedlund), qualitative methodology was chosen as it allows the flexibility to explore the IC in the target population in greater detail and to explore area/ideas of interest that may have developed during the data collecting process. Ten interviews were conducted on companies chosen from the Reed Business database’s classification of precision engineering. Data collection was via a semi‐structured interview, the results were coded into Nvivo and analysed.FindingsIt was discovered that there is an interrelatedness of the components of IC, knowledge of IC management as a strategy in the engineering industry is low and the academic discourse on IC is in to transferring into practical implementation.Practical implicationsThere is greater need to address the practical implications and barriers to the implementation of IC management strategy within industry.Originality/valueThe author having examined the data collected and the characteristics of the responding company and the dominant element of IC within each have coined the phrases Sector of Innovative Potential (SoIP), Sector of Collaborative Potential (SoCP) and Sector of Operating Efficiency (SoOE).

Intellectual Capital: Perception of Public and Private Sector Knowledge-Based Organizations in Pakistan

“…However in order to utilize this HC, the organizations also need to develop systems and structures to get maximum benefit from the HC. For this, purpose the effective utilization of structural capital is needed (Henry, 2013). Sullivan (2000) view structural capital (SC) as the support or infrastructure that an organization provides for its HC.…”

“…One, to codify the knowledge and the other is to provide the codified knowledge to the workers, as and when required. The SC also influences the element of integration within the organizational design of the firms (Henry, 2013). Although there is no single organizational structure to point out that suite all types of organizations, however, it is important that the structure of organization should be such that it provides the channels of communication that will maximize the efficiency and creativity of the HC (Kim & Kumar, 2009).…”

“…Molnar (2004), finds that 94% of the CEOs surveyed are in agreement that IC resources need to be managed and measured and similarly, more than half are of the opinion that it is one of the three most important challenges for the organizations. Many researchers (Henry, 2013;Lonnqvist & Mettanen, 2005;Roos, Pike, & Fernstrom, 2005) argue that IC is important for all forms of organizations (listed companies, non-profit organizations and public sector organizations) and conclude that IC is one of the most important factors which are creating value for organizations and therefore need the attention of the managers to be identified, measured and managed. The value creating role of IC becomes more important in the knowledge based organizations.…”

Towards a Knowledge Sharing Model for Small Businesses

“…However benefits have not been generally exploited by small businesses 10 . Business owners may not intend to invest in knowledge 70 , and individual knowledge may be regarded as personal assets that will assist an employee in maintaining employment 104 . Management provides vision and energy to stimulate and sustain effective knowledge management practices.…”

Examining the Intellectual Capital Impact on the Profit Efficiency in Automobile and Parts Manufacturing Industry of Tehran Stock Exchange

“…The exploitation of this complex phenomenon can be the difference between the death and survival of an organization. It is therefore critical that a clear understanding of this concept exists within the managerial strata of any organization, with clear comprehension of the component elements of IC are and how it can be harnessed for the perusal of the organizational objectives [2].…”