The purpose of this brief introductory editorial is to introduce the background and rationale to the special issue, “Intellectual capital: becoming critical”. This is based on a selection of papers presented at the 1st Intellectual Capital (IC) Stream at the 4th International Critical Management Studies Conference at Cambridge University, UK, in July 2005.
Critical management studies (CMS) is not just about theory but demands action; its purpose is to make a difference for the better. Following an introduction to the idea of what “critical management studies” (CMS) entails the main ideas of the seven papers selected are then presented. Each paper is accompanied by a commentary from leading authors in the IC and knowledge management (KM) fields.
Key themes emergent in this “critical” issue include a decisive turn to language, uncertainty and risk, not‐knowing, ambiguity and complexity, scepticism towards simplistic mechanistic models, ownership rights, and the dynamics of situated IC practice. The conclusion reached is that there is much that further work from a CMS perspective can contribute to the IC field.
This special issue is one of the first applications of critical management thinking to the intellectual capital field.
Introduction
This special issue is based on a selection of papers presented to the Intellectual Capital (IC) Stream at the 4th International Critical Management Studies Conference at Cambridge University, UK, in July 2005. As Marr and Chatzkel (2004) put it in an earlier special issue of this journal – IC is at a “crossroads”; one of these roads takes a critical stance and the purpose of both the CMS stream and this special issue is to initiate some exploratory discourse on IC from this perspective.
IC has emerged as an interdisciplinary construction designed to somehow signify the increasingly immaterial or intangible nature of economic value. The basic underlying assumption is that value is created when human, internal organisational, and external processes/relations/resources are aligned to enhance knowledge creation and exploitation. Ideas, and the ability to continuously generate them, are viewed as more important than the traditional triad of land, labour and financial capital. There is, as yet, no currently accepted definition of intellectual capital; indeed, the notion of an essentialist definition of IC is strongly challenged in this issue. The field is very much at the emergent stage, and the focus to date has been primarily mainstream managerialist. Publications by the OECD, The Conference Board in the USA, the EU, the World Bank and others plus the World Congress on Intellectual Capital in Canada and the launching of this Journal all signal the increasing focus on a knowledge‐based view on economy and society. The time is now opportune to take a more critical stance on this “construction” and particularly on its discourse, underlying assumptions and concealed “tyrannies of truth” – this is the purpose of both the CMS4 IC stream at Cambridge and this special issue – on which we placed no boundaries other than that submissions should be constructively critical of theoretical, managerial and organisational assumptions underlying intellectual capital discourse and practice.
Critical management studies (CMS) is decidedly not a fixed homogeneous approach; as Hugh Willmott puts it in his note of welcome on the conference homepage:
Critical Management Studies addresses a wide range of issues that extend from diversity to globalization, from labour process to philosophy, from technology to sexuality and gender. It interrogates established agendas and strives to move beyond them. Contributions from heterodox standpoints are encouraged: marxism, feminism, environmentalism, labour process theory, post‐structuralism, post‐colonialism, post‐development theory, queer theory, critical realism, etc., etc. Critical Management Studies has been described as an ecumenical movement embracing many critical traditions and viewpoints, each differentiated by a distinctive cause. The suggestion that diverse perspectives are included may sound like an anything‐goes‐postmodernism. However, the idea of critique is based on the notion of making judgements at critical moments, this way or that, which implies that not all differences matter equally all the time. Articulating these differences, and making both conventional and critical judgements subject to interrogation is a central aim of discussions at the conference (Hugh Willmott, www.cms4.org).
Moreover, within the Academy of Management, CMS has attained Interest Group status in recent years and, due to sound leadership, is increasingly influential with its own streams at the AOM annual meetings and an annual “Dark Side” case competition providing useful teaching materials from this alternate perspective. Its domain statement, which basically sums it up, is as follows:
CMS serves as a forum within the Academy for the expression of views critical of established management practices and the established social order. Our premise is that structural features of contemporary society, such as the profit imperative, patriarchy, racial inequality, and ecological irresponsibility often turn organizations into instruments of domination and exploitation. Driven by a shared desire to change this situation, we aim in our research, teaching, and practice to develop critical interpretations of management and society and to generate radical alternatives. Our critique seeks to connect the practical shortcomings in management and individual managers to the demands of a socially divisive and ecologically destructive system within which managers work (CMSIG, http://aom.pace.edu/cms/index.htm).
The key point to note here is that CMS is not just about theory but demands action (Adler, 2002). Its purpose is to make a difference for the better. Taking this route from the IC crossroads one must remain open to surprise, adventure even, as to who one might meet along this enchanted way: from marxism to poststructuralism and 40 shades of heterodoxy in between, beyond or as yet unthought. We were delighted to meet quite a few at Cambridge. Seven of these papers are presented here with commentaries from leading authors in the IC field and brief introductions are provided below. The reader expecting an answer to the “What is IC?” will find no answer to such an essentialist question here – the contributions are best read as a response to the “How is?” question (Henriksen et al., 2004). How is intellectual capital? This is a more humble but perhaps more revealing question with which to address the text presented in the following contributions.
The contributions
We briefly introduce the key ideas of both the papers and the commentaries here. As CMS is such an open perspective we cannot claim to present these in any logical order; that said, we have attemtpted to do so but the interpretation of such order, if any, we leave to the reader.
J.C. Spender, in a highly erudite and thought provoking paper, presents a case for radical constructivism as “a profoundly post‐modern epistemology” in answer to the question: “What could one mean by not‐knowledge?” Drawing on the method of distinctions he constructs a discourse that relates:
data, meaning, and practice; and
knowledge assets and knowledge absences.
The argument is that managing uncertainty forces practice and experience into the foreground. When one analyses knowledge as an asset one presumes to know that asset with certainty; more critically, one assumes away any uncertainty hence pushing it out of the realms of analysis. This theme of uncertainty runs through all the contributions here. Spender argues that it is uncertainty that is pivotal. Under conditions of uncertainty managers are forced into creative practice, creating the specific knowledge that resolves the previous incompleteness. KM must cover situations in which analysis fails when knowledge is absent just as it covers the management of knowledge assets when they are present. The rationalist treatment of knowledge assets relates data and meaning to purposive practice. Under conditions of uncertainty this is balanced with a radical constructivist approach that sees meaning as arising from managerial creativity and exploratory organisational practice. Hardimos Tsoukas, in his commentary, agrees that addressing the knowledge‐base view of the firm places questions of epistemology at the “centre of attention of scholars and practitioners alike”. Viewing firms as knowledge systems makes us realise that the locus of individual understanding is not so much in the head as in situated practice.
Measurement schemes, according to Kazem Chaharbaghi and Sandy Cripps, are “jumbles of subjective evaluations and opinions presented as objective phenomena that can serve to mask what really matters”. They critically question the coupling of “intellectual” with “capital” and the assumption that such a coupling legitimises measurement. It is argued that IC can only indicate direction when imagination, creativity and learning are at work but that IC's contested nature and multiple meanings can be revealed using both rational and non‐rational management perspectives. This process is presented through what the authors term a “metalectic” framework that exposes a variety of attitudes of mind so that the integration of rational and non‐rational management perspectives becomes a possibility. This paper argues that such a process is more appropriate than what is currently on offer if intellectual capital is to become more meaningful. In his commentary, Victor Newman issues a provocative wake‐up call: “there is a point beyond which a metaphor or analogy is no longer useful and illustrative, but becomes potentially dangerous; intellectual capital is just such an idea”. We must heed his warning that IC may be, or may become “merely a false metaphor that cannot describe an underlying hidden process”.
Following on from the previous critique of “jumbles of subjective evaluations” Sven Voelpel, Marius Leibold, Robert Eckoff and Tom Davenport present a timely critique of the Balanced Scorecard (BSC) and its inability to handle “underlying hidden processes” and uncertainty. The BSC has become the “darling” of the “what we want to manage must be measured” school of strategic management. The blind‐spots of this type of thinking are identified here where it is cogently claimed that the “tyranny” of the BSC as a measurement “straightjacket” can jeopardize the survival of firms and stultify innovation. It can negatively affect customer value rejuvenation, shareholders' benefits, as well as societal benefits in general. In other words, it is past its “sell‐by‐date” in an increasingly globally integrated value chain where outsourcing of traditional business competencies, including aspects of innovation, is now becoming the norm. Five major problem areas are identified and discussed, and two illustrative case vignettes are presented. A more “dynamic” alternative to the BSC is then proposed. In the commentary, Simon Grand and Georg von Krogh note that the critique of the BSC presented is most interesting in terms of its focus on uncertainty and ambiguity. This leads to the key question: To what extent is the “static‐ism” of a metric or reference system limiting (even dangerous), or enabling, under uncertainty? Such questioning needs to be at the forefront of research and practice in a knowledge‐based economy and society.
Indra Abeysekera's paper critically explores the literature on intellectual capital disclosure (ICD) with the purpose of strengthening the research agenda in this area; particularly in terms of method, theory, and issues of comparability. Simplistic representationism is once again at the forefront of critique. This is a very timely paper that highlights the lack of coherence between value creation and the ICD literature; the vexed issue of the comparability of data in relation to the coding frameworks used; and, the need for much stronger theoretical foundations. In the commentary, Ahmed Bounfour, taking the issue of the “grammar” of value creation and its idiosyncratic nature as his point of departure, further questions the focus on “photography” in suggesting both a more critical stance on this “grammar” and an expansion beyond the boundaries of the individual firm (as in Voelpel et al.) to the community, regional or societal level. According to Bounfour, “we have to understand the dynamics of knowledge capitalism and how value is really created or might be created in the future”. The static representationsist map, in other words, is not the dynamics of the value creating territory. Such insights should greatly assist future work in ICD.
Kenneth Mølbjerg Jørgensen draws on both Wittgenstein and Foucault in taking a decisive turn to language and power. He notes that trying to obtain a precise universalist definition of IC misunderstands the “complexities of language and its associated life forms”. Language games are of decisive importance for IC as IC is created and recreated through language games that depend on the talk and actions of and between IC‐scholars, IC‐practitioners and people exposed to IC. Developing a critical understanding of IC requires a historical and contextual understanding of how IC has emerged and how IC is used. This brings in the neglected issue of power. IC is perceived as a social construction and the genealogical focus is on how actors, positions and interests influence this process of social construction. A further key contribution of this paper is an introduction to some methodological guidelines for conducting critical genealogical research on intellectual capital. David Boje, in his commentary, strongly endorses this perspective in noting that IC is all about the “problems of permission to tell a story” and further that “stories have ownership rights” an issue that is not presently being addressed.
The following paper by Daniel Andriessen provides further substantive evidence of the centrality of language in IC discourse and practice. Drawing on Lakoff and Johnson's work on metaphor he analyses common metaphors used in three seminal IC related works by leading authors such as Davenport, Nonaka, Prusak, Takeuchi and Stewart. Based on the textual analysis he suggests that at least 95 per cent of all statements about knowledge or IC are based on metaphors. It is argued that two metaphors form the basis for the concept of intellectual capital: “knowledge as a resource” and “knowledge as capital”, and some of the implications of these findings for IC theory and practice are discussed. If abstract metaphors form the basis of our understanding of reality, the paper concludes by asking whether we need new metaphors to better understand the mechanisms of the knowledge economy, hence allowing us to potentially change some of the more negative structural features of contemporary society. Larry Prusak, in his commentary, takes some issue with Andriessen on the referential nature of knowledge and on the “industrial” nature of most IC “metaphors in use” but fully agrees on the points raised on just how powerful metaphors are in IC discourse and practice. This is a potentially very rewarding opening up of critical space in the IC field.
In the final paper, David O'Donnell, Mairead Tracey, Lars Bo Henriksen, Nick Bontis, Peter Cleary, Tom Kennedy and Philip O'Regan revisit some of the classics in asking yet another fundamental question: “What (or how) is the essential condition of intellectual capital?” Following Marx and Engels' historic identification of the “essential condition of capital as wage labour” these authors argue that the fundamental nature of the capital‐labour relation continues resiliently into the IC‐labour relation. Adopting a critically modernist stance on unitarist HR and OB discourse, and contextualised within a background on the stock option phenomenon and recent accounting regulation the issue of employee ownership rights is raised here. There can be no capital, intellectual or otherwise, without labour. Boje commented on the ownership rights of “stories”; following the “linguistic turn” in social theory and philosophy (see Habermas, 1987) we can confidently state that no‐one has exclusive ownership over everyday language; so who should really own intellectual capital? From the perspective of labour, nothing appears to have really changed (yet) in terms of the essential condition of intellectual capital. In his commentary, James Sesil notes that there has been a recent decline in the US on the number of stock options granted to rank‐and‐file employees, probably due to recently introduced expensing regulation. He agrees that, in many cases, stock options were heretofore adopted for the wrong reasons; but they may now start being used when and where they do the most good – which remain as further open questions. The ownership rights of labour – whether to stories or to value (however conceived) – are now on the IC agenda.
How do we get to where we do not know?
How can a CMS focus contribute in future work to the field of Intellectual Capital? The ideas presented in these papers and their associated commentaries are challenging, provocative, critical of simplistic cause‐effect notions, highly sceptical of simplistic maps claiming to represent territories and, perhaps to some readers, may even appear “dangerous”. As Guest Editors, this was our purpose. We have moved well beyond simplistic, narrow, static and mechanistic models here; from a dominant position these must now take a subordinate position. Yet, we remain somewhat unclear as to what type of thinking will prove to be most illuminating? As Tsoukas put it recently:
Like Tantalus, the members of the information society, much as they desire it, will not be able to taste the fruits of higher transparency: society will remain as opaque as it has always been, and in some ways it will become more unfathomable as well as unmanageable. The information society spawns paradoxes that prevent it from satisfying the temptations it creates. The light that the information society promises to cast upon itself may well constitute a new tyranny: the tyranny of radical doubt, of disorientation, and of heightened uncertainty (Tsoukas, 2005, p. 14).
We accept such uncertainty; we do not ignore it or attempt to brush it aside. Some of the themes emergent in this special issue of JIC, while not making the future transparent or even translucent, do make it (perhaps) less opaque for critically oriented scholars and practitioners in the IC field:
More deep thinking and real research on the dynamics of intangible value creation.
A decisive turn to language.
Acceptance of complexity and not‐knowing.
Acceptance of uncertainty and risk.
Further questioning on “ownership rights”, broadly interpreted, within the intellectual capital‐labour relation.
More “how?” questions.
Albeit somewhat new, the future for critically oriented IC scholars and practitioners appears somewhat more illuminating after our Cambridge experiences. As Wittgenstein, the Cambridge philosopher, might put it: the meaning of the word “illuminating” is how we use it – now and in future work. This special issue is but a creative beginning and none of us can claim certainty (obviously) as to how we got here. The future, thankfully, remains open.
The authors have many people to thank here. The organisers of CMS4.org at Cambridge; Hugh Willmott, Carmen Neagoe and Todd Bridgman deserve special mention. The anonymous reviewers who contributed greatly to enhancing the text presented here and Rory Chase for his encouragement and support. The constructive dialogue throughout the IC Stream at CMS4 with Claudia Bettiol, Jennifer Delton, Gloria Moss, Terri McNichol, Rob Gunn, Fred Guy and many others must be acknowledged. CMS5 beckons!
