Addressing the scarce knowledge of sustainability practices in small and medium-sized enterprises (SMEs), the purpose of this paper is to identify how and if there is a link between intellectual capital (IC) and entrepreneurial orientation (EO), and if this connection contributes to a company’s sustainability performance. Based on a series of semi-structured interviews conducted with Swedish SMEs, our findings show that despite the limitations these companies experience in terms of financial and human resources, a focus on tackling sustainability issues appears to inspire entrepreneurial behaviour. Specifically, seeking opportunities when it comes to product development or process improvement to incorporate sustainability, and exploring these opportunities without knowing the real outcome, are dimensions associated with an entrepreneurial orientation. Although the literature has discussed the positive effect that entrepreneurial orientation has on sustainability investments, as well as how intellectual capital contributes to the sustainability performance of a firm, we also found that entrepreneurial orientation can overcome limitations with intellectual capital and therefore contribute to the sustainability performance of SMEs.The link between EO and IC has not been studied before, nor how it may impact the adoption and maintenance of sustainability practices. But our findings further indicate that Swedish SMEs, operating in a country with a high Sustainability Index, have high requirements when it comes to sustainability, and with few resources, entrepreneurial behaviour is common to explore opportunities associated with sustainability. Furthermore, drawing on our findings we attempt to provide theoretical contributions in the field of entrepreneurship, sustainability, and intellectual capital, as well as practical recommendations that will help business owners, managers, and policymakers to better enable sustainability practices

The construction industry is inherently multidisciplinary and has adopted many intellectual and technical business improvements from other industries in an effort to optimize productivity. In construction, management inactivity is the root cause of 30% of non-productive time. This has created an opportunity and need for standardized and structured repeatable procedures for new managerial strategies. A theoretical framework for Organizational Intelligence (OI), which encompasses the procedural ability of an organization to efficiently process, support, measure and reason through management issues, is proposed. The elements of organizational intelligence are divided into three types of intellectual capital: Human Capital, Organizational Capital, and Relational Capital. The performance of an organizational activity depends on the quality of these capitals that are available within an organization. An organization's Human Capital (HC) is the human resources within the organization that can be deployed to acquire and apply its knowledge to perform, respond, or control designated work with available organizational assets. Organizational Capital (OC) refers to the assets available to the organization to support the performance of organizational activities Relational Capital (RC), which combines human capital and organizational capital to perform, is needed specific organizational activities. In addition, the research uses human cognitive abilities as the basis of a fundamental structure from which to form new organizational cognitive abilities that are capable of presenting management processes as critical value creations. Organizational cognitive ability is suggested to define appropriate organizational resources in order to integrate and determine a rational selection of applicable technologies and improvements. This ability can develop knowledge with interconnected variables, namely intellectual capital, managerial process, and performance, all of which support organizational intelligence. From the theoretical framework for OI, a prototype (Intelligibility Learning Model), which determines the role of relationships in an organization's operation and use of resources, is formulated. A case based research then applies the prototype to a managerial process in the construction industry. The case research demonstrates that the Intelligibility Learning Model (ILM) could be use effectively by industry decision makers to improve performance of organizational activities. The identification and application of a theoretical framework constitutes the foundation of a new managerial theory, Organizational Intelligence Management. It thus provides a fundamental foundation that explains how the construction processes, knowledge, skills, and resources used for managerial activities function. This theory contributes and establishes a better understanding of management, from organizational resources through to final production. / Ph. D.

Knowledge-intensive firms are a growing and increasingly important part of our economy. They compete by bringing their knowledge resources to bear on their customers' challenging problems. Such knowledge resources can reside in workers, routines and work processes, stored data and knowledge, and relationships. Scholarship on these important firms, though, has focused largely on their workers' knowledge and skill, i.e., their human capital. This is in spite of the fact that the other forms of knowledge - organizational capital and social capital - both play important roles in firms. Additionally, there has been little research into the role of strategies in these firms. The research questions of this paper are designed to address these substantial gaps in our understanding of these firms. First, I examine the development and use of the full set of knowledge resources. I argue that organizational capital consists of both procedural and declarative organizational capital, and that all of these forms of intellectual capital play unique roles. Second, the paper suggests that the key strategic driver for such firms is how uncertainty impacts their ability to develop and use intellectual capital assets. Specifically, I examine the uncertainty that is brought into the firm by its customer interactions. The paper hypothesizes that the relationship between customer interaction uncertainty and organizational capital, as well as their relationships to human and social capital, will drive the performance of these firms. These questions are examined using both survey and archival data from 94 financial service organizations using linear regression and Hierarchical Linear Modeling. I find support for several of the hypotheses. Customer interaction uncertainty is positively associated with human and declarative organizational capital. Further, human and procedural organizational capital interact to impact performance, as do human capital and declarative organizational capital.

Yes / The Institute of Chartered Accountants of Scotland (ICAS) and The Scottish Accountancy Trust for Education and Research (SATER)

The connotation that intellectual capital (IC) replaces physical assets as the major source of competitive advantage (CA) is now generally accepted in both management and accounting literature. Thus, IC management has become a major concern for management regarding enhancing firm performance (FP). The main objective of this thesis is to examine the relationship between IC and FP and whether this relationship is direct or indirect through the firm’s CA, IC management tool use (through balanced scorecard (BSC) implementation) and the success in the use of the IC management tool. To achieve this objective, this thesis is divided into three research frameworks. The first framework examines the mediating effect of CA on the relationship between IC and FP. The second framework focuses on the mediating effect of BSC implementation on the relationship between IC and firms’ CA and performance. The third framework investigates the mediating effect of the success factors and BSC implementation success on the relationship between BSC implementation extent, CA and FP. This study used both quantitative and qualitative data. The quantitative data were collected using a questionnaire sent to 192 Omani firms with a response rate of 54%. Depending on the survey participants’ willingness and availability, 32 interviews were also conducted in order to support the results from the survey further. The results suggest that the relationship between IC and FP is indirect through the mediation impact of the extent and success of BSC implementation, the success factors and CA.

No

Yes / The extent of intellectual capital (IC) disclosures in corporate annual reports has received increasing attention in recent years. This paper is an exploratory study that considers the efficacy of various IC disclosure measures. It draws on annual reports of leading firms within the financial services sector in nine Western European countries. Content analysis was employed to produce measures based on disclosure indexes and word count to assess the variety, volume and focus of IC in annual reports. Disclosure scores were computed using three forms of presentation - any form, numerical form (reflecting more ‘objective’ disclosure), and all forms. Generally, we found that the form of disclosure index did not significantly affect IC sample rankings and were broadly in line with the IC word count rankings. However, very different rankings emerged when using the focus measure (IC word count as a percentage of total word count in Annual Report). We argue that this measure of relative importance is an important measure, particularly because firm size is typically positively associated with disclosure. Variation in the form of IC (human, structural, relational) is also explored. The paper then reports the findings of a time series analysis of the IC disclosure practices within a UK bank over a 10-year period. Significant variation in IC disclosure was found, with a strong movement in IC content from human capital to relational capital. These findings are discussed.

Yes / This paper, using data from 100 UK listed firms, investigates the relationship between audit committee characteristics and intellectual capital (IC) disclosure. We find that overall IC disclosure is positively associated with audit committee characteristics such as the size and frequency of meetings, and negatively associated with audit committee directors’ shareholding. We find no significant relationship between IC disclosure and audit committee independence and financial expertise. We also observe that the association between audit committee characteristics and IC disclosure varies with the IC components (i.e. human capital, structural capital and relational capital), suggesting that the underlying factors that drive various components of IC disclosure are different. These results have important implications for policy-makers in that they confirm that the effectiveness of audit committees in the corporate reporting processes is a function of certain characteristics.

Yes / In this paper, we investigate whether intellectual capital (IC) and financial disclosures jointly affect the firm’s cost of equity capital. In contrast to prior research, we disaggregate disclosures into IC and financial disclosures and examine whether the two disclosure types are jointly related to the cost of equity capital. We also investigate whether IC and financial disclosures have an interaction effect on the cost of equity capital. Using data for a sample of 125 UK firms, we find a negative relationship between the cost of equity capital and IC disclosure. We find that the relationship between financial disclosure and the cost of equity capital is magnified when combined with IC disclosure. Additionally, we find that IC and financial disclosures interact in shaping their effects on the cost of equity capital. Further analyses suggest that the effect of financial disclosure on the cost of equity capital is augmented for firms characterised by a medium level of IC disclosure. These results provide important insights into the relationship between disclosures and cost of equity capital and have policy and practical implications.

Yes / ICAS and The Scottish Accountancy Trust for Education and Research (SATER)