The purpose of this paper is to advance the understanding of how intellectual capital (IC) unfolds in practice in organizations. This is done by answering the research question of how IC is recognized and managed in practice as expressed by managers.
An explorative, empirical and multiple case study was conducted, investigating four Swedish firms.
This paper illustrates how IC was recognized and managed in practice despite managers expressing uncertainty of what the IC concept means. More or less direct, formalized and purposeful ways were adopted. The IC elements and practices most important from a management perspective were those aligned with the overall strategy, but were seldom what was visible in financial reports.
The use of an explorative, multiple case study limits the generalizability. However, the rich view gained of how IC unfolds in practice may not always be possible using large sample, survey-studies. Future research is therefore suggested to take this paper’s insights further and investigate IC in other organizations and in other national contexts.
This paper responds to the calls for third stage IC research, by showing how IC management in practice may not be as clear and straightforward as researchers tend to assume. It also adds to the importance debate on IC accountingization, by reflecting on how an accounting dominance may not fully capture IC inside organizations. A number of practical contributions are also made.
