Intellectual capital, knowledge management practices and firm performance

Researchers have widely recognised and accepted that firm performance is increasingly related to knowledge-based issues. Two separately developed literature streams, intellectual capital (IC) and knowledge management (KM), have been established as the key discussions related to knowledge-based competitive advantage of the firm. Intellectual capital has provided evidence on the strategic key intangible resources of the firm, which could be deployed to create competitive advantage. Knowledge management, in turn, has focused on the managerial processes and practices which can be used to leverage IC to create competitive advantage. Despite extensive literature on both issues, some notable research gaps remain to be closed. In effect, one major gap within the knowledge management research is the lack of understanding related to its influence on firm performance, while IC researchers have articulated a need to utilise more finegrained conceptual models to better understand the key strategic value-creating resources of the firm. In this dissertation, IC is regarded as the entire intellectual capacity, knowledge and competences of the firm that can be leveraged to achieve sustained competitive advantage. KM practices are defined as organisational and managerial activities that enable the firm to leverage its IC to create value. The objective of this dissertation is to answer the research question: “What is the relationship between intellectual capital, knowledge management practices and firm performance?” Five publications have addressed the research question using different approaches. The first two publications were systematic literature reviews of the extant empirical IC and KM research, which established the current state of understanding regarding the relationship between IC, KM practices and firm performance. Publications III and IV were empirical research articles that assessed the developed conceptual model related to IC, KM practices and firm performance. Finally, Publication V was among the first research papers to merge IC and KM disciplines in order to find out which configurations could yield organisational benefits in terms of innovation and market performance outcomes.

Managing an intellectual property right portfolio in the software industry

Tutkimuksen tavoitteena oli määrittää etuja, joita huolellinen immateriaali-oikeussalkun hallinnointi ohjelmistoalalla luo yritykselle. Tutkimusaineisto on kerätty haastattelemalla eri asemissa olevia ihmisiä kolmesta suomalaisesta ohjelmistoalan tuote- ja palveluyrityksestä. Tutkimuksesta käy ilmi, että ohjelmistoyritysten immateriaalioikeussalkut koostuvat liikesalaisuuksista, tekijänoikeudesta, tavaramerkeistä, verkkotunnuksista ja muutamista patenteista. Kiinnostus patentteihin ohjelmistoalalla on kasvanut erityisesti niiden tuoman tekijänoikeutta vahvemman suojan takia. Tällä hetkellä Euroopassa suhtautuminen ohjelmistopatentteihin on kuitenkin vielä käymistilassa. Jos ohjelmistopatentit hyväksytään, immateriaalioikeussalkun strateginen merkitys kasvaa. Tällöin salkunn hallinnointi tukee yrityksen tavoitteita - esimerkiksi oman toimintavapauden turvaamista - avustaen hakemus-prosessissa, tarkkaillen markkinoita sekä arvioiden yrityksen oman immateriaalioikeussalkun erilaisia hyväksikäyttömahdollisuuksia.

Analyzing dynamic intellectual capital: System-based theory and application

This research report presents an application of systems theory to evaluating intellectual capital (IC) as organization's ability for self-renewal. As renewal ability is a dynamic capability of an organization as a whole, rather than a static asset or an atomistic competence of separate individuals within the organization, it needs to be understood systemically. Consequently, renewal ability has to be measured with systemic methods that are based on a thorough conceptual analysis of systemic characteristics of organizations. The aim of this report is to demonstrate the theory and analysis methodology for grasping companies' systemic efficiency and renewal ability. The volume is divided into three parts. The first deals with the theory of organizations as self-renewing systems. In the second part, the principles of quantitative analysis of organizations are laid down. Finally, the detailed mathematics of the renewal indices are presented. We also assert that the indices produced by the analysis are an effective tool for the management and valuation of knowledge-intensive companies.

Assessing intellectual capital in a research institute environment in steel industry

Diplomityön tavoitteena oli tutkia aineettoman pääoman hallintaa terästeollisuuden tutkimuslaitosympäristössä, sekä luoda mittaristo kuvaamaan sen tilaa ja kehitystä. Työn rajausten mukaan aineeton pääoma jaettiin Annie Brookingin jaottelun mukaan, ja tarkasteluun valittiin teollisoikeudet sekä henkilöstövoimavarat. Empiirinen osa työstä perustui pääasiassa haastatteluihin sekä Case –yrityksen sisäisiin julkaisuihin. Näitä pyrittiin tulkitsemaan kvalitatiivisten tutkimusmenetelmien oppien mukaan. Tutkimustulosten perusteella voidaan todeta teollisoikeuksien hyödyntämisen olevan suhteellisen vähäistä terästeollisuuden parissa. Syitä tähän on työssä käsitelty melko laajasti. Henkilöstön kehittäminen pitkällä tähtäimellä sekä tiedonkulun tehostaminen henkilöstön keskuudessa ovat puolestaan asioita, joihin kiinnitetään kyseisellä teollisuudenalalla kiitettävässä määrin huomiota. Työn loppupuolella esitelty aineettoman pääoman mittaristo tarjoaa yritykselle työkalun, jonka avulla voidaan monipuolisesti arvioida tätä yrityksille nykyisin elintärkeää asiaa. Lopullista ratkaisumallia se ei aineettoman pääoman mittaamiseen tarjoa, mutta luo kuitenkin tärkeän ensiaskeleen kohti tulevaisuuden yhä kehittyneempiä mittausmenetelmiä.

The Management of Intellectual Capital in the Early Phases of Project Marketing

This study aims at enhancing understanding and deriving new constructs about the management of intellectual capital in the early phases of project marketing. The research methodology employed is deductive; conceptual reasoning is based on existing literature. The study's knowledge base is drawn from the bodies of literature dealing with project, relationship, and industrial marketing, as well as from the literature dealing with mechanical engineering, network approach, systems selling, R&D, project portfolio, strategic, financial, and knowledge management. As a result, three processes, 32 summaries and 19 conclusions give to the management of intellectual capital meaning in the context of project marketing. These conclusions and synthesis are proposed to improve the existing concepts and models in project marketing.

Intellectual capital management in international and Russian software companies

The importance of the company’s intellectual capital (IC) increased during the last decades due to knowledge-based economy development. Despite the clear understanding of the IC importance, researchers agree on the fact that many difficulties in management of intangibles still exist from the both theoretical and practical points of view. The goal of the study is to conduct a comparison of IC management approaches used in international and Russian software companies. To carry out a proper comparison and identify similarities and differences, software firms are explored from the point of view of IC, and then be compared in the context of international and Russian sectors. At the end of the study, current IC management findings in international and Russian software companies are presented, and comparison of IC management is done. It was investigated from the comparison that international and Russian software companies have similarities and few principal differences in several IC management areas. The comparison of IC management approaches between international and Russian software companies provide helpful information to both, researchers and practitioners.

Intellectual Property Management in a Small Company

Opinnäytetyö keskittyi kriittisiin tapahtumiin, joita on tullut yhtiön tai sen edeltävän yhtiön, joka oli Mobile Screen TV – 4 ALL, tekemien aikaisempien patenttihakemusten yhteydessä . Tutkimus vertasi ja evaluoi yhtiön aikaisemmin tekemien keksintöjen suojausta. Toisaalta opinnäytetyön päämäärä oli tutkia ja selvittää monitapaus-menetelmällä yhtiön aikaisempia keksintöjä ja miten aineettoman oikeuden suojaus toteutui prosessien eri vaiheissa. Tämä päättötyötutkielma vei loppuun asti erittäin suuren patenttien ja hyödyllisyysmallien hakemusten tutkimuksen. LH Communications Oy on tehnyt monia niistä, mutta tutkimus sisälsi myös joitakin kilpailijoiden hakemuksia. Tässä tutkimuksessa oli kaksi pääkysymystä. Miten pieni yhtiö voisi suojella heidän uusia ideoitaan ja keksintöjään ja myös samalla pitää yhtiön talouden hyvällä tasolla. Tämä tutkimus käytti The Critical Incidents Technique (CIT), joka keskittyy kriittisiin tapahtumiin, selvittääkseen sopivia menetelmiä pienelle yhtiölle siitä, miten suojella uusia ajatuksia, ideoita ja keksintöjä ja samanaikaisesti olla tuottava niiden kanssa. Tutkimuksemme käsitteli kaikenlaisia tarvittavia käytäntöjä pienessä yhtiössä ja päähuomio pienessä yhtiössä tulee olla omien keksintöjen suojaamisessa. Paras suojaus on tehdä patentteja, mutta se tulee maksamaan hyvin paljon koko tapahtumasarjan aikana.

Intellectual Property Protection in China in the Cases of Outsourcing and own Manufacturing

The intellectual property (IP) environment in China is still very immature. There are several problems in legal, political, economic, social-cultural, competitive and labor environment which have hindered IP legal enforcement. Under such circumstances, IP misappropriation is a major concern especially for foreign small and medium-sized enterprises (SMEs) doing business in China. These circumstances require foreign companies, no matter whether they are multinational corporations (MNCs) or SMEs and have own manufacturing in China or not, to take strong IP actions. Therefore, the purpose of this study is to discuss how IP can be protected in China in the case of outsourcing and in the case of own manufacturing. The comparison will consider the process of outsourcing and own manufacturing consisting two stages: preparation stage and operation stage. In order to clarify the conceptual arguments, two illustrative case studies were studied. The case data bases on two semi-structured interviews of the managing directors, field notes and archival data. The findings propose that attention in IP protection should be given to following issues: integrating IP strategy into the company’s business strategy, protecting the most critical knowledge, regarding IP steps as a whole in the protection mechanism and making IP strategy as proactive as possible. The major difference between outsourcing and own manufacturing in IP protection is in the operation stage. Besides, the findings also provide managerial advice on IP protection, e.g. foreign managers should be prepared for IP risks in China, they should establish an own IP protection mechanism which matches the company’s situation and they should consider IP protection as an on-going process.

Strategic external deployment of intellectual assets

Globalization, pervasiveness of technology and ICT, and the buildup of information societies and policies have lead to a growing abundance of knowledge and highly educated labour supply that is distributed widely. These changes have shifted the foundation of competitiveness to valuable knowledge resources which are now distributed widely across the globe, across actors in the value chain and across educated individuals in multiple organizations. Against this backdrop, the paradigm of open innovation (OI) has emerged as a new response to managing the increased amount of boundary-spanning knowledge flows in and out of the innovation process. The outbound mode of open innovation, that is to say the external exploitation of knowledge assets outside of the firm’s own products and services, has been the less-researched aspect of the concept and so far typically seen as concerning the outlicensing of unused technological assets to generate additional revenue. Given that open innovation is essentially a framework for the holistic structuring and management of crossboundary knowledge flows to improve a firm’s innovative performance, a close integration to corporate strategy seems imperative in order to fully benefit from it. Integrating open innovation to strategy leads to elevating its role from a fringe activity to a central innovation management issue that needs to be systematically managed. Building a structure that allows effective management necessitates linking open innovation activities to each phase of the innovation process. Previously, the connection between outbound OI and the earlier stages of innovation has not been studied. The thesis finds that connecting outbound OI to the entire innovation process of the firm, including the fuzzy front end of innovation, is critical for attaining strategic objectives and to the successful implementation and management of the activity. The practical purpose for the research is to enable companies to fully utilize their potential for outbound open innovation and to be able to implement and manage it from a strategic standpoint.

Knowledge, processes and relationships in organizational change: Understanding how to facilitate management of intellectual capital in diverse organization structures and cultures.

This study examined relationships of organizational dependencies, change management and developed intellectual knowledge resources, in different intellectual capital based development programs on ICT-sector. Study was carried out in a research context, where high degree of external organizational contingencies existed and lots of changes in several development programs had taken place in the last years. From a scientific perspective the main contribution was that evidence between relationships of organizational dependencies, change model portfolio and developed knowledge resources could be suggested. From managerial perspective the primary implication was that in situations where sustainable competitive advantage is pursued by means of increasing knowledge based productivity of labor, firms should seek to pursue organizational settings where external dependencies have minimal amount of effect.

Startup IPR strategies: Why should startup companies protect their intellectual property?

This thesis studies intellectual property right (also: IPR) strategies from the perspective of high growth startup companies. Due to technology development and intellectualization of business, large part of companies’ assets are nowadays intangible. At the same time, the importance of protection instruments designed to protect these intangible assets, intellectual property rights, is increasing. Utilization of these instruments, however, requires understanding of the functioning of the IPR system, as well as financial resources. Startup companies aiming for growth need to be able compete with more established companies also in relation to intangible assets, but they might not have the required knowledge ot resources to fully utilize IPRs in their business. This research aims to understand what are the benefits a startup company can have from protecting their IPRs, and how can the company achieve those benefits. Based on a review of previous literature, altogether 11 benefits of IPR registration were recognized. To answer to the research questions, six half-structured interviews were conducted with experts form different fields, all with experience in working with startup companies and IPR issues. The interviews were analyzed using different methods of qualitative data analysis, mainly derived from grounded theory and case study methods. As a result, out of the 11 benefits recognized from earlier literature, 8 were recognized to be relevant for startup companies. The most central benefits were recognized to be linked with the financial lifecycle of the startup company, including increasing credibility of the startup and stimulating an investment. In addition it was noticed, that startup companies are mainly able to utilize these benefits at later stages of their lifecycle. However, to be able to utilize the benefits at later stages, the startup company needs to be aware of the functioning of the IPR system and might need to apply for appropriate protection already early on. As a result of this study, a three-step model was formed to describe different levels of IPR utilization. The first level of the model represents the minimum level of understanding that every startup company should have regarding IPRs. The second level views IPR strategy from a risk management perspective, including securing the minimum protection of the company’s own IPRs, contract management and establishing processes for handling IPR issues. The last stage reflects strategic use of IPRs. At this third stage intellectual property rights have a central role in the startup company’s business, and they are used in the company’s value creation.

Intellectual Capital Measurement in IT industry

The goal of this research – which is to critically analyze current theories and methods of intangible assets evaluation and potentially develop and test new methodology based on the practical example(s) in the IT industry. Having this goal in mind the main research questions in this paper will be: What are advantages and disadvantages of the current practices of measurement intellectual capital or valuation of intangible assets? How to properly measure intellectual capital in IT? Resulting method exhibits a new unique approach to the IC measurement and potentially even larger field of application. Despite the fact that in this particular research, I focused my attention on IT (Software and Internet services cluster – to be exact), the logic behind the method is applicable within any industry since the method is designed to be fully compliant with measurement theory and thus can be properly scaled for any application. Building a new method is a difficult and iterative process: in the current iteration the method stands out as rather a theoretical concept rather than a business tool, however even current concept totally fulfills its purpose as a benchmarking tool for measuring intellectual capital in IT industry.