Usefulness of Intellectual Capital - Research Paper Example

Intellectual Capital 0 Background and Motivation In the research, Contemplating the Usefulness of Intellectual Capital Reporting: Reasons behind the Abandonment of IC Disclosures, the author notes that the already developed Intellectual Capital models seem to have not been put into practice (Schaper, 2013, p.1). Given that a research has been carried out previously regarding the commitment of the companies that were involved in the original IC reporting project and the evolution as well as reasons for ICS reporting among companies, the researcher justified that it is worth to find out the reasons and conditions that have forced organisations that were involved in the Danish project of guidelines for Intellectual Capital Statements between 1997 and 2002 to stop using the framework for measuring, managing and reporting Intellectual Capital that had been acquired (Schaper, 2013, p.6). However, there is no research that has been done concerning the organisation perceptions and perspectives about the ICS reporting models or framework. Essentially, the research was carried out to establish that the Danish project, though depicted as a success, has ignored the organisation’s perceptions and perspectives as regards the ICS reporting models or framework. The author noted that it is important to find out the reasons and conditions that have forced companies to stop using the framework for measuring, managing and reporting Intellectual Capital that had been acquired. The author also notes that the article will provide insights on relevance, practicality and practicability of IC reporting principles (Schaper, 2013, p.6). However, the author fails to clearly point out to whom this study is important. The importance of this study, as noted by the author, is convincing because it may be useless to continue developing IC reporting frameworks that are not applicable by companies. In addition, the implementation of the IC reporting has either failed or companies, including those that participated in its formulation, have abandoned its application. 2.0 Research Design Issues The author demonstrates his scholarly ability to identify and outline relevant existing knowledge by capturing the history of Intellectual Capital by pointing out how it evolved. For instance, the author notes that the full value of companies needs to be reported by including intellectual properties or assets of the company. In the study’s background, the author explains, in detail, how numerous IC related reporting initiatives have been devised. The author demonstrates his ability to identify the scholarly existing knowledge by providing reliable information pertaining to the processes and stages through which the Danish project of guidelines for Intellectual Capital Statements was articulated. The author of the article uses a rich source of literature from the previously carried out studies to support his affirmations pertaining to the company manager’s perceptions towards Intellectual Capital Statements. For instance, the author supports the claim that managers either do not see any point in providing reports pertaining to intangible assets, are afraid of providing information that is more than enough to the public or they do not have any knowledge about the internal use of intangible assets reports from Sveiby’s 1997 publication (Schaper, 2013, p.3). The author identifies the gap in the existing literature that he has reviewed by noting what has been investigated as far as Intellectual capital reporting is concerned and what has not. For instance, the author notes clearly that issues such as the commitment of the companies that were involved in the original IC reporting project and the evolution, as well as reasons for ICS reporting among companies, has been investigated before. The author, however, identifies that there is a gap in the existing literature that he has reviewed because there is no investigation that has been done to find out what caused the abandonment of the ICS practice in spite of the fact that there is evidence from a previous research that many companies have stopped using ICS. The author located his study in the relevant literature initially by identifying that the Intellectual Capital research is in a third stage. From the background information, the author noted that there is a need of scrutinising the perceived usefulness, relevance and practicability of IC frameworks critically, in terms of reporting and knowledge management (Schaper, 2013, p.6). The independent variables examined by the author include the determinants of stoppage of use of ICS framework. They include companies’ attributes such as size, ownership, time and sector and the background of company employees in terms of professional affiliation. On the other hand, as pointed out by Chiucchi (2013, p.398), the use of ICS framework was the dependent variable. Though the author justifies the choice of variables; however, it is not done adequately. The author only states that investigating the determinants behind the IC disclosures provides new insights and that using such research variables can investigate the determinants which are associated with the abandonment of IC disclosures. The author should have included variables such as the period for which the companies have been operational. The author did not specify the research hypothesis or models of the study. However, the research questions followed logically the theory provided and literature that was reviewed. This was achieved by basing the main research question on the reviewed literature regarding the abandonment of IC reporting by Danish companies. 3.0 Theoretical or Statistical Issues The study adopted a qualitative research approach. The use of survey analysis by carrying out interviews in this study was the most appropriate method of collecting data to address the research questions because, through it, it was possible to provide new insights pertaining to the determinants of IC disclosures. Ultimately, this research design was ideal to collect data because it was also capable of investigating determinants of the abandonment of IC disclosures (Schaper, 2013, p.7). The strengths of using interviews in the research to answer the research questions are that the researchers obtained the first hand information which is highly reliable. Also, interviewees could provide accurate data. If they decided to be honest the research could probe them for detailed information. However, researches by Dumay and Garanina (2013, p.12) shows that this method has various limitations such as the difficulties or impossibilities in identifying the most appropriate respondent who could provide information without fear of giving more information than required. Variables were categorised into similar content on major themes using the template approach. Using the thematic coding, recurrent answers were counted to create descriptive statistics. The measures were valid because they enabled the researcher to adequately answer the research questions pertaining to the abandonment of IC reporting frameworks across the chosen sample of fifty eight companies (Jung & Horta, 2013, p.12). Though the study investigated employees of various ranks in the chosen companies, there were threats to the internal validity arising from the researcher’s method of data collection. Since this was a qualitative approach, the researcher was the primary data collection instrument; the researcher’s bias could threaten the internal validity (Blankenship, 2009, p. 137; Ary, Jacobs, Sorensen, & Walker, 2013, p.293). Therefore, there is a high chance of believing the results of the research. The period for which the chosen companies for study have been in existence could not potentially correlate with the independent and dependent variables. The author notes that the study only provides a satisfying degree of explanations. The findings of this study could not be generalised beyond the sample, and the researcher proposed a further research to find out whether the findings of the study can be generalised. The sample selected for study was not representative of the population; this illustrated that there was a threat to the external validity (Langbein & Felbinge, 2006, p.36). 4.0 Results, implications and conclusions The author provided a satisfactory explanation of the study’s findings. For instance, the author presented findings in two phases. The first phase was an overview of testimonials from recurrent themes while the second phase provided detailed findings from further analysis of emergent aspects and relationships to the demographic data. The results were consistent with the research questions while the research indicated possibilities to explain the outcomes of the study findings. The research findings presented by the author have a high degree of credibility. The findings were consistent with the literature provided and explained by the author; they provided perception and perspectives among various companies that led to the abandonment of the IC reporting framework by such firms. The author concluded that the perceptions of managers within the companies that were under study were the main cause of abandonment of the IC reporting frameworks. Therefore, even if companies seemed to promote the implementation of IC reporting models, internal factors hindered cultural shifts. This led to such companies turning back to their old systems. These were related to the literature and research problem. The study discussed the limitations of the research and recommended for future steps that should be taken for further studies. However, there are no implications of the findings of the study for practices that were proposed in the study. The author identified areas for future research arising from their study by highlighting that future research should use different samples of companies for analysis. In conclusion, the author should clearly identify the importance of the research. Additionally, the researcher should state the people who will benefit from that study. Besides, the author should identify the threats to the internal and external validity, as well as state or explain how they will be controlled in the study. List of References Ary, R., Jacobs, L., Sorensen, C. and Walker, D., 2013. Introduction to Research in Education. Belmont: Cengage Learning Press. Blankenship, D., 2009. Applied Research and Evaluation Methods in Recreation. New York: Human Kinetics Press. Chiucchi, M. S., 2013. Measuring and reporting intellectual capital: Lessons learnt from some interventionist research projects. Journal of Intellectual Capital, 14(3), pp.395-413. Dumay, J. and Garanina, T., 2013. Intellectual capital research: a critical examination of the third stage. Journal of Intellectual Capital, 14(1), pp.10-25. Jung, J., and Horta, H., 2013. Higher Education Research in Asia: a Publication and Co- Publication Analysis. Higher Education Quarterly, 67(4), pp.398-419. Langbein, L. and Felbinge, C. L., 2006. Public Program Evaluation. New York: M. E Sharpe Press. Schaper, S., 2013. Contemplating the Usefulness of Intellectual Capital Reporting: Reasons behind the Abandonment of IC Disclosures, [Online], Available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2377950 [28 May 2013]. Read More