Outlining the impact of intellectual capital accumulation and depletion processes on the performance of an insurance firm: a dynamic resource-based perspective

Author/s Enzo Bivona
Publishing Year 2014 Issue 2014/2
Language English Pages 23 P. 71-93 File size 174 KB
DOI 10.3280/MACO2014-002004
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

This paper aims to develop a conceptual framework on how Intellectual Capital (IC) accumulation and depletion processes are dynamically interrelated with firm performance. Such a framework makes explicit the relationships between policy levers, strategic resources, drivers, end-results and performance indicators through a Dynamic Resource-based perspective. Such an approach matches the Resource based perspective and the System Dynamics (SD) methodology. This paper argues that in order to explain a firm superior performance, it is not sufficient to look at the endowment of strategic resources in a given moment of time; it is instead required to investigate the dynamics of company strategic resources accumulation and depletion processes over time and how such assets are interconnected with the critical success factors which may enable the firm to build a sustainable competitive advantage. To this aim the proposed conceptual framework was applied to an insurance firm. The paper also highlights the benefits of the developed SD simulation model to support decisions makers’ learning processes in planning alternative IC investment policies.

Keywords: Intellectual Capital, Resource Based View, System Dynamics, Dynamics Resource-based perspective, performance measurement

  1. Amit R., Schoemaker P. (1993), Strategic Assets and Organizational Rent, Strategic Management Journal, 14, pp. 33-46. DOI: 10.1002/smj.4250140105
  2. Andriessen D. (2004), Making sense of Intellectual Capital. Design a method for the valuation of Intangibles, USA, Burlington, Elsevier Butterworth-Heinemnn.
  3. Barlas Y. (1996), Formal aspects of model validity and validation in system dynamic, System Dynamics Review, 12, 3. DOI: 10.1002/(SICI)1099-1727(199623)12:3<183::AID-SDR103>3.3.CO;2-W
  4. Barney J.B. (1991), Firm resources and sustained competitive advantage, Journal of Management, 17, pp. 99-120. DOI: 10.1177/014920639101700108
  5. Bianchi C. (2012), Enhancing Performance Management and Sustainable Organizational Growth through System Dynamics Modeling, in Groesser S.N., Zeier R. (Eds.), Systemic Management for Intelligent Organizations: Concepts, Model-Based Approaches, and Applications, Heidelberg, Springer-Publishing. DOI: 10.1007/978-3-642-29244-6_8
  6. Bianchi C. and Bivona E. (2005), Using System Dynamics ILEs to enhance Intellectual Capital policies in service businesses, Paper presented at the annual International System Dynamics Conference, Boston.
  7. Bivona E. (2008), Exploring Intellectual Capital in a call centre through a ‘System Dynamics’ resource based view, Portuguese Journal of Management Studies, XIII, 3, pp. 361-384.
  8. Bontis N. (2001), Assessing knowledge assets: a review of the models used to measure intellectual capital, International Journal of Management Reviews, 3(1), pp. 41-60. DOI: 10.1111/1468-2370.00053
  9. Brooking A. (1996), Intellectual Capital, London, International Thompson Business Press.
  10. Choo C. and Bontis N. (2002), The Strategic Management of Intellectual Capital and Organizational Knowledge, New York, Oxford University Press.
  11. Dierickx I., Cool K. (1989), Asset Stock Accumulation and Sustainability of Competitive Advantage, Management Science, 35(12), pp. 1504-1511. DOI: 10.1287/mnsc.35.12.1504
  12. DMSTI (2003), Intellectual Capital Statements – The New Guideline, Danish Ministry of Science, Copenhagen, Technology and Innovation.
  13. Dumay J.C. (2009), Intellectual capital measurement: a critical approach, Journal of Intellectual Capital, 10(2), pp. 190-210. DOI: 10.1108/14691930910952614
  14. Edvinson L., Malone M. (1997), Intellectual Capital, New York, Harper business.
  15. Forrester J.W. (1961), Industrial Dynamics, Productivity Press.
  16. Forrester J.W., Senge P. (1980), Tests for building confidence in System Dynamics Models, TIMS Studies in the Management Sciences, 14, North-Holland Publishing Company
  17. Hafeez K. and Abdelmeguid H. (2003), Dynamics of Human Resource and Knowledge Management, Journal of the Operational Research Society, 54, pp. 153-164. DOI: 10.1057/palgrave.jors.2601513
  18. Hamel G. and Prahalad C.K. (1994), Competing for the future, Boston, MA, Harvard Business School Press.
  19. Hsu I.C. and Sabherwal R. (2011), From intellectual capital to firm performance: the mediating role of knowledge management capabilities, IEEE Transactions on Engineering Management, 58(4), pp. 626-642. DOI: 10.1109/TEM.2011.2111455
  20. Kaplan R.S. and Norton D.P. (2001), The Strategy Focused Organization, Boston, Harvard Business School Press.
  21. Kogut B., Zander U. (1992), Knowledge of the firm, combinative capabilities, and the replication of technology, Organization Science. 3(3), pp. 383-397. DOI: 10.1287/orsc.3.3.383
  22. Lev. B. (2001), Intangibles: Management, Measurement, and Reporting, Washington D.C.
  23. Lönnqvist A., Sillanpää V., Carlucci D. (2009), Intellectual Capital Management in Practice: Assessment of Implementation and Outcomes, Knowledge Management Research and Practice, 7, 4, pp. 308-316. DOI: 10.1057/kmrp.2009.22
  24. Marr B. (2005) (ed.), Perspectives on intellectual capital. Multidisciplinary insights into management, measurement, and reporting, Oxford, Elsevier Butherworth-Heinemann, Burlington.
  25. Marr B., Schiuma G., Neely A. (2004), The Dynamics of Value Creation: Mapping your Intellectual Performance Drivers, Journal of Intellectual Capital, 5, 2, pp. 312-325. DOI: 10.1108/14691930410533722
  26. Menor L.J., Kristal M.M. and Rosenzweig E.D. (2007), Examining the influence of operational intellectual capital on capabilities and performance, Manufacturing and Service Operations Management, 9(4), pp. 559-578. DOI: 10.1287/msom.1060.0131
  27. Morecroft J.D.W. (1997), The Rise and Fall of People Express: A Dynamic Resource-Based View, Proceedings of the 1997 International System Dynamics Conference, Barlas Y., Diker V., Polat S. (eds.). Istanbul, pp. 579-586.
  28. Morecroft J.D.W. (2002), Resource Management under Dynamic Complexity, in Morecroft, Sanchez and Heene (eds), Systems Perspectives on Resources, Capabilities and Management Processes, Advanced Series in Management, Oxford, Elsevier Pergamon.
  29. Morecroft, J.D.W. (2007), Strategic Modelling and Business Dynamics, Chichester, Wiley.
  30. Nørreklit H. (2000), The Balanced Scorecard – a critical analysis of some of its assumptions, Management Accounting Research, 11, pp. 65-88. DOI: 10.1006/mare.1999.0121
  31. Pasher E., Ronen T. (2011), The complete guide to Knowledge Management. A strategic plan to leverage your company’s Intellectual Capital, New Jersey, Hoboken, John Wiley & Sons Inc. DOI: 10.1002/9781118983782
  32. Porter M.E. (1985), Competitive Advantage; Creating and Sustaining Superior Performance. New York, The Free Press.
  33. Porter M.E. (1991), Towards a Dynamic Theory of Strategy, Strategic Management Journal, 12, Special Issue: Fundamental Research Issues in Strategy and Economics, Winter, pp. 95-117.
  34. Reed K.K., Lubatkin M. and Srinivasan N. (2006), Proposing and Testing an Intellectual Capital-Based View of the Firm, Journal of Management Studies, 43, pp. 867-893. DOI: 10.1111/j.1467-6486.2006.00614.x
  35. Richardson G.P. and Plug A.L. (1981), Introduction to system dynamics modelling with DYNAMO, Cambridge (MA), MIT Press.
  36. Robson C. (1993), Real World Research: A Resource for Social Scientists and Practitioners-Researchers, Oxford, Blackwell.
  37. Rogers E. M. (1962), Diffusion of Innovations, New York, NeThe Free Press.
  38. Roos G., Pike S., Fernstrom L. (2005), Valuation and reporting of intangibles – state of the art in 2004, Int. J. of Learning and Intellectual Capital, 2, 1, pp.21-48. DOI: 10.1504/IJLIC.2005.006804
  39. Roos J., Roos G., Dragonetti N.C., and Edvinsson L. (1997), Intellectual Capital: Navigating in the New Business Landscape, London, Macmillan.
  40. Simon H.A. (1979), Rational decision making in business organisations, American Economic Review, 69, pp. 493-513.
  41. Sterman J.D. (2000), Business Dynamics - System Thinking and Modeling for a Complex World, Irwin McGraw-Hill.
  42. Stewart T. (1997), Intellectual Capital, New York, Doubleday.
  43. Sveiby K. (1997), The New Organizational Wealth, San Francisco, Berrett-Koehler.
  44. Vennix J. (1996), Group Model Building, Chichester, Wiley.
  45. Warren K. (2002), Competitive Strategy Dynamics, Chichester, John Wiley & Sons.
  46. Warren K. (2005), Improving strategic management with the fundamental principles of system dynamics, System Dynamics Review, 21(4), pp. 329-350. DOI: 10.1002/sdr.325
  47. Warren K. (2008), Strategic Management Dynamics, England, John Wiley & Sons.
  48. Wernerfelt B. (1984), A Resource-based View of the Firm, Strategic Management Journal, 5, pp. 171-180. DOI: 10.1002/smj.4250050207
  49. Winch G. (2001), Management of the “Skills Inventory” in Times of Major Change, System Dynamics Review, 17(2), pp. 151-159. DOI: 10.1002/sdr.208

  • Designing a Multi‐Sided Platform business model assessment framework: a Dynamic Performance Management perspective Enzo Bivona, Federico Cosenz, in Systems Research and Behavioral Science /2021 pp.93
    DOI: 10.1002/sres.2665
  • Overcoming managers’ myopic decisions in a waste collection company Enzo Bivona, Francesco Ceresia, Giovanni Tumminello, in Journal of Modelling in Management /2019 pp.1023
    DOI: 10.1108/JM2-01-2019-0028
  • Management, Valuation, and Risk for Human Capital and Human Assets Meir Russ, pp.1 (ISBN:978-1-349-47216-1)

Enzo Bivona, Outlining the impact of intellectual capital accumulation and depletion processes on the performance of an insurance firm: a dynamic resource-based perspective in "MANAGEMENT CONTROL" 2/2014, pp 71-93, DOI: 10.3280/MACO2014-002004