Aalborg Universitet

The role of causal maps in intellectual capital measurement and management

Montemari, Marco; Nielsen, Christian; Lund, Morten

Publication date:
2013

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Early version, also known as pre-print

Link to publication from Aalborg University

Citation for published version (APA):

Montemari, M., Nielsen, C., & Lund, M. (2013). The role of causal maps in intellectual capital measurement and
management. Paper presented at EAA Annual Congress 2013, Paris, France.

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JIC
14,4
The role of causal maps
in intellectual capital
measurement and management
522 Marco Montemari
Department of Management, Faculty of Economics “G. Fuà”,
Received 16 January 2013
Revised 9 April 2013 Università Politecnica delle Marche, Ancona, Italy, and
29 April 2013 Christian Nielsen
Accepted 29 April 2013
Department of Business Studies, Aalborg University, Aalborg, Denmark

Abstract
Purpose – The purpose of this paper is to investigate the measurement and the management of the
dynamic aspects of intellectual capital through the use of causal mapping.
Design/methodology/approach – The paper details the methods utilized in a single in-depth case
study of a network-based business model.
Findings – The paper illustrates how causal mapping can be used to understand how intellectual
capital really works in the specific business context in which it is deployed. Moreover, exploiting
the causal map as a platform for extracting a set of indicators can provide information on the length
of the lag and the persistence of the effects of managerial actions. In addition, it can signal when and
how to refine and update the causal map. The combination of these factors can potentially support the
dynamic measurement and management of intellectual capital.
Research limitations/implications – The paper presented has two main limitations. First, the use
of a single case study to provide in-depth and rich data limits the generalizability of the observations.
Second, the proposed approach has not been implemented in practice. Future research opportunities
include interventionist-type case studies that put the causal mapping approach into practice.
Practical implications – The paper highlights the need to build causal maps to enhance the
measurement and management of intellectual capital, which is dynamic in nature. As a consequence,
this tool can be useful for monitoring the intangibles of companies and networks and to better
understand the contribution their intellectual capital makes to the value creation process.
Originality/value – The paper openly questions the measurement of the fluid and dynamic aspects
of intellectual capital. It proposes a tool for governing these aspects and it suggests that even the
existing intellectual capital measurement systems can improve their usefulness by including these
dimensions. So, a shift in intellectual capital measurement is prescribed.
Keywords Measurement, Causal maps, Intellectual capital dynamism, Network-based businesses
Paper type Research paper

1. Introduction
This paper investigates possibilities for creating more dynamic modes of measurement
and management of intellectual capital performance. Several authors have recently
argued that intellectual capital is an intensely complex web of company-specific
knowledge resources (Dumay, 2009; Dumay and Cuganesan, 2011). Because intellectual
capital is a fluid and dynamic phenomenon, its complexity and ambiguity has to be
analyzed in the specific company in which it is applied. Therefore, the objective of this
paper is to answer the call for performative research made by Mouritsen (2006) and
Journal of Intellectual Capital
Vol. 14 No. 4, 2013
more recently repeated by Guthrie et al. (2012) and Dumay and Garanina (2013).
pp. 522-546 The implication that these authors’ research puts forth is that measuring and
r Emerald Group Publishing Limited
1469-1930
managing intellectual capital dynamism is essential for managers in order to govern
DOI 10.1108/JIC-01-2013-0008 the value creation process of their companies and the networks in which they are
encompassed. However, the intellectual capital measurement systems (ICMSs) of Intellectual
today have been criticized for not being fully able to explain the value creation process capital
triggered by intangibles (Mouritsen, 2006; O’Donnell et al., 2006; Dumay, 2009).
Intangible resources in existing ICMSs are extracted from the context in which they measurement
work and are then measured “on hold,” not “in action” (Chiucchi, 2013). Hence, the
dynamic aspects of intellectual capital are not fully measured and managed. Since
the state of the art in this research area is still unable to provide exhaustive answers, 523
we need further steps aimed at understanding which types of tools are suitable in order
to dominate the real nature of intellectual capital, i.e. its complex and dynamic aspects.
From this perspective, causal maps can help to fill this gap.
Specifically, this paper presents the case study of a network of companies that are
working to develop and utilize mobile phone location data for commercial purposes.
Thus, the first aim of this paper is to represent the relationships among the intellectual
capital elements activated by companies in the network through a causal map. This
visualization can make the dynamic aspects of intellectual capital accessible to
managers, thereby potentially enabling a more effective managerial intervention. The
second aim of the paper is to explore how the causal map can be applied as a platform
for extracting indicators, thus supporting the measurement and the management of
intellectual capital dynamism. The paper makes a contribution to the intellectual
capital measurement literature by showing how to obtain additional information on
the dynamics of intellectual capital in order to improve manageability of it and, as
a consequence, its contribution to value creation. As such, this paper contributes to
the extant literature by providing important insight into the design of performance
measurement systems in networks. Following along these lines, the paper also provides
an important understanding of the distinction between the value network analysis
proposed by Verna Allee (2000, 2002) and the causal mapping techniques adopted by
scholars such as Marr et al. (2004), Fernström et al. (2004), Cuganesan (2005), Carlucci and
Schiuma (2006, 2007), Cuganesan and Dumay (2009), Jhunjhunwala (2009).
The structure of the remainder of the paper is as follows: Section 2 offers a
discussion of the evolution of the concept of intellectual capital and its measurement
along with a description of the causal mapping tool and its application to intellectual
capital visualization. Section 3 describes the features of the case study network, called
the Gemini network, while Section 4 presents the methodology used to collect and
analyze the data on which the causal map is built. Section 5 discusses the findings of
the paper and Section 6 concludes the paper by presenting the main implications of the
discussion for the dynamic measurement and management of intellectual capital.

2. Intellectual capital measurement and management

The concept of intellectual capital is closely related to the creation, sharing and
management of knowledge within companies (Mouritsen et al., 2005; Guthrie et al.,
2012). Especially in the early stages of research concerning intellectual capital, many
definitions and associated classifications have been proposed to understand what it is
and where it is located within the company (Catasús and Chaminade, 2007). Already in
1997, Edvinsson (1997) defined intellectual capital as “the possession of knowledge,
applied experience, organizational technology, customer relationships and professional
skills that provide [y] a competitive edge in the market.” In the Danish Guideline for
Intellectual Capital Statements (Mouritsen et al., 2003) the concepts of intellectual
capital and knowledge management are intertwined as these intrinsic aspects
are given a form which can be managed (see also Mouritsen and Larsen 2005).
JIC Here, intellectual capital is considered a phenomenon that allows the “activation” of
14,4 intangible resources, i.e. the knowledge resources connected to employees, customers,
technologies and processes.
There is currently a broad consensus on the classification that identifies the
following three categories within intellectual capital: human capital, organizational
capital and relational capital (Bjurström and Roberts, 2007; Guthrie et al., 2012).
524 However, attention has gradually shifted from the categories to the dynamic aspects
and multifaceted nature of intellectual capital (Kianto, 2007), because these intellectual
capital subcategories cannot be rigidly separated in a meaningful manner (Nielsen
and Dane-Nielsen, 2010). According to Mouritsen (2006), it is not possible to identify
a priori the features and functions of a company’s intellectual capital because they
depend on the original combination that is set up in the specific company context.
Moreover, the relationships among the intellectual capital elements are not stable; they
do not always display the same features and they may even cease to exist or change
intensity, direction and nature over time. Hence, the relationships among intellectual
capital elements are often fragile, ambiguous or merely potential.
During the measurement process, the different elements that give life to intellectual
capital have to be identified, i.e. the intangible resources, the interactions among them
and with the value creation. It is with reference to all these aspects that the measurement
takes place. Indicators should be consistent with the mobilization of the resources aimed
at achieving targets and financial success (Grasenick and Low, 2004) and the choice of
indicators to be associated with specific elements is not easy. Therefore, there’s the risk
of designing indicators that only partially represent the elements that make up the
complex web of intellectual capital. The need to combine financial and non-financial
indicators derives from the inability of the latter to adequately represent the complex
web of intangible resources. The financial measures are symptomatic: they measure only
the final outcomes, not allowing for the identification of the causes that generate the
results (Kaplan and Norton, 1996b). Eccles (1991), among others, argues that using
non-financial measures allows us to capture the causes of the company’s success. In a
sense, leading indicators “drive” the performance of lagging indicators (Eccles, 1991).
The measurement of intellectual capital for internal management purposes ensures the
availability of information in order to support and guide the decision-making process
toward the creation of value through an efficient and effective management of intellectual
capital (Sveiby, 1997). In particular, the measurement process should be mainly focussed
on the relationships among the intangible assets that make up the complex system of
intellectual capital, i.e. the real source of value creation. This perspective would capture
the dynamic nature of the phenomenon under investigation, allowing the managers to
monitor the way in which the actions carried out on intellectual capital contribute to the
overall corporate performance. Thus, the measurement for internal management purposes
produces knowledge on intellectual capital. It is not a mere representation of the past, but
it allows for the identification of problems and risks in the present. Moreover, information
attained from measures can be considered a stimulus to make changes in the future,
creating goals and weighing alternative courses of action (Mouritsen, 2004; Chiucchi,
2008). This means that measurement and management are closely related terms.
Over the past 15 years, academics and practitioners have developed definitions,
measures and frameworks; however, the use of static modes of intellectual capital
measurement does not fit with the real essence of intellectual capital. A growing
number of contributions have argued that the existing frameworks for intellectual
capital measurement are not able to fully explain the value creation process triggered
by intangible resources (O’Donnell et al., 2006; Dumay and Cuganesan, 2011). The Intellectual
relationships among intangible resources, between them and the creation of are not capital
explicitly handled in the ICMSs, which have been proposed so far. Most of them are
based on categories that have been identified as one of the main problems for intellectual measurement
capital measurement (Bjurström and Roberts, 2007; Mouritsen, 2009). In fact, categories
create separations: intangible resources are mainly extracted from the context in which
they are deployed and then they are measured “on hold,” not “in action.” In this way, 525
categories hinder the full consideration of the dynamic aspects of intellectual capital.

2.1 Causal mapping: a tool to be used to visualize and measure intellectual capital
Intellectual capital dynamism is seen, here, from the perspective of the individual, not
only in terms of skills, experiences and competences, but also in terms of values,
motivations, feelings and behavior ( Jankowicz, 2001). These cognitive aspects affect
the relationships among individuals and, as a consequence also the intellectual capital
dynamics and the value creation process. Actors inside companies have many – often
varying – aspirations, values and interests, which inherently complicates their coexistence
and cooperation. As such, the relevance of these facets has been recognized not only in the
field of psychology, but also in the fields of management, strategy and organization (see
Narayanan and Armstrong, 2005 for an exhaustive review).
Analyzing the mental models through which individuals filter information and
make decisions (Weick, 1977) may prove to be a good platform for understanding the
value creation process and the contribution of intellectual capital dynamism. Hence,
the knowledge of the way in which intellectual capital works in a specific operational
context is stored in the mind of the actors who apply it every day. Therefore, gaining
access to this knowledge can potentially provide an understanding of how intellectual
capital is really used. Cognitive maps have the potential to facilitate this task, by
making explicit individuals’ knowledge of the way in which the company generates
value. This tool can be defined as “a graphic representation that provides a frame of
reference and locates people in relation to their information environments” (Fiol and
Huff, 1992, p. 267). In other words, cognitive maps are used to elicit the content of
people’s mental models.
There are different kinds of cognitive maps (Huff, 1990), but for the aim of this paper
one typology appears particularly suitable, namely the causal map (Axelrod, 1976). This
tool is a network of nodes and arrows, where the direction of the arrows means believed
causality (Fiol and Huff, 1992; Langfield-Smith, 1992; Eden, 2004; Montibeller and Belton,
2006). It elicits the causal structure of the individuals’ thought, highlighting the variables
which influence the decision-making process inside companies and organizations
(Hodgkinson et al., 2004). Making this structure more visible means identifying the
relationships among key actors, key knowledge, key objectives and key actions and thus,
understanding how individuals perceive the stream of events.
In a sense, causal maps can be compared to geographical maps: following a certain
“itinerary,” made up of decisions and actions, can lead to a particular “destination,”
that is, the achievement of certain targets. This is a precondition to understanding the
reasons behind actors’ behaviors as well as to identifying alternative courses of
actions. Causal maps are very suitable for analyzing context-dependent and dynamic
phenomena (Ambrosini and Bowman, 2002), such as intellectual capital. Its elements,
in fact, find their meaning according to the relationships they develop with each other
and with the other variables of the specific business context in which they are used
(vision, mission, strategy, management challenges). Moreover, causal maps have the
JIC potential to clarify complex and ambiguous phenomenon. They can be considered “a
14,4 way of ordering and analysing something that is ‘fuzzy’” (Ambrosini and Bowman, 2002,
p. 22) and they “can facilitate organizational activities by simplifying inevitably complex
domains” (Huff and Jenkins, 2002, p. 14). As highlighted above, intangible resources have
several opportunities to develop and relationships can change direction or intensity over
time. So, the effects of managerial actions are uncertain. Causal maps can clarify which
526 intellectual capital elements and which relationships can potentially generate non-linear
events or emergent properties. Visualizing multiple explanations and identifying
potential problems is very relevant for an aware management of intellectual capital.
Another tool that aims to represent the dynamics of intellectual capital is the value
network analysis proposed by Verna Allee (2000, 2002). Even though value network
analysis and causal mapping technique have similar goals, i.e. to answer the question
“How is value created?” these methodologies are quite different. Hence, the above-
mentioned question is answered in different ways. While Verna Allee’s method builds
on three mapping elements (Allee, 2002 and 2008):
. the participants (the nodes of the map) who are real people;
. the transactions among them, represented by the arrows that originate with one
participant and end with another; and
. the deliverables, the actual “things” that move from one participant to another,
can be tangible or intangible.
The causal mapping technique proposed in the paper builds on two elements:
. The value drivers, i.e. any node of the map, which is a key activity, competence,
attribute, objective that is considered a critical prerequisite for the success of an
organization. In other words, the value drivers are those that are perceived to be
relevant by the managers concerned (Ferreira and Otley, 2009).
. The causal relationships, i.e. the arrows among the value drivers, that mean
impact or influence.
The features of causal maps match the needs that have arisen in relation to the nature of
intellectual capital, that is, on the one hand, to bring to the surface the way in which
actors use the elements of intellectual capital and, on the other hand, to capture the
dynamic dimension of intellectual capital, i.e. to understand what flows connect the IC
elements together in order to allow an adequate representation of them. The visualization
of these aspects allows the managers to comprehend how the intellectual capital of
a company really works in its operational context as well as to realize how intangible
resources are linked to value creation. Therefore, the action-oriented nature of causal
mapping (Fiol and Huff, 1992) can support the visualization of intellectual capital
“in action” by creating knowledge about the relationships between managerial actions on
intangibles and the impact on value creation. The information content of the causal map
can considerably increase if it is used as a platform to create an appropriate set of key
performance indicators to measure intellectual capital. As the explicit development of
a causal model is the starting point for designing the indicators (Kaplan and Norton,
2000, 2004), the causal mapping technique is more suitable than that of value network
analysis for the sake of this study, in that the latter does not rely so much on causal
reasoning which would potentially hinder the identification process of the indicators.
Some attempts at representing intellectual capital through causal mapping techniques
have been made already. These attempts are discussed in the next section.
2.2 Visualization techniques and intellectual capital measurement Intellectual
In the field of management accounting, the relevance of visualization techniques (the capital
so-called strategy maps) is well acknowledged. This is largely due to the development
of multi-dimensional performance measurement systems and, in particular, of the measurement
balanced scorecard (Kaplan and Norton, 1992, 1996b). In these multi-dimensional
performance measurement systems, the measurement process is closely related to the
management process (Ittner and Larcker, 2003). Nevertheless, Kaplan and Norton have 527
proposed a tool specifically aimed at measuring and affecting the company’s strategy
as a whole, namely strategy maps (Kaplan and Norton, 2001, 2008). Strategy maps,
therefore, are not intended to measure and govern the whole intangible “legacy” of the
company, but only the improvement in specific areas considered critical for strategic
purposes, i.e. the intangible elements contained in the customer perspective, in the
process perspective and in the learning and growth perspective. In this way, strategy
maps may undervalue the relevance of other intangible elements that can potentially
affect the competitive success of the company, like the relationships with other
stakeholders (e.g. suppliers). Despite a growing tendency to adopt them, the use of
these techniques is not so well established in the field of intellectual capital.
Instead of using this type of strategy map, the contribution of Fernström et al. (2004)
explicitly focusses on intangible asset interactions that take place in the R&D
department of a pharmaceutical company. As such, the map they propose does not
concern the business strategy as a whole, but a specific value creation process within
the company. The aim of Fernström et al.’s study is to understand the role the R&D
department plays in meeting the company’s objectives. Through workshops and
individual interviews, the authors are able to identify the bundle of resources (human,
organizational, relational, physical and monetary) at the company’s disposal as well as
the relationships among them. The authors stress the usefulness of their map in
highlighting the efficiency and the effectiveness with which the resources are deployed
as well as the deficiencies and malfunctions which can affect the value creation process
within the company. As a consequence, this is a relevant tool that can be used to
identify areas of improvement, potential actions and alternatives. Even if measurement
is not one of the aims of the project, the authors state that the map helps to identify a
set of indicators useful for measuring the company’s progress in fulfilling its strategic
goals. In particular, the map makes it possible to identify the relevant resources to be
measured, to support the selection of indicators and to improve, as a consequence, the
selectiveness of the measurement system.
Marr et al.’s (2004) study is similar to that of Fernström et al. (2004), because it
contributes by producing an IC map of a specific activity in a company, here in the
form of a new product development department in a manufacturing firm. The building
procedure of the map is based on a series of semi-structured interviews and focus
groups, which involve middle-range managers and team leaders of the process under
analysis. The main aim is to take into account the direct relationships between
organizational resources and strategic objectives as well as the indirect relationships
between organizational resources. Different arrow sizes are used to express the strength
of the relationships according to participants’ perceptions. From a measurement
perspective, Marr et al. (2004) match the map only to two indicators relating to the
process performance (time to prototype a new model and the number of iterations
between design and production). The improvement of these indicators is supposed to
generate a positive effect on time-to-market, which is argued by management to be one
of the most relevant generators of success for the company. These indicators are not
JIC extracted from the map, but are already present in the performance measurement
14,4 system of the company.
As is the case with the present paper, a dynamic approach to intellectual capital
measurement, too, is the foundation of Cuganesan’s (2005) map which is based on a case
study of an Australian financial services company involved in the creation of software
for customers. In particular, an “initial” map is built by the subjects participating in the
528 project before the launch of the new software. This map contains the hypothesized
relations among the intangible assets involved in the project and the related impacts on
company performance (in terms of reduced costs, increased customer retention and
improved profitability). After the software introduction, the subjects are asked to build
another map. This new map does not coincide with the “initial” map, and thus, the actual
relationships among intellectual capital elements and the value creation process are
strikingly different from the ones identified in the first map. Moreover, the final map
shows multidirectional and complex relationships, while only linear relationships were
originally assumed in the “initial” map. Regarding the measurement perspective, the
map is neither used to design new indicators nor to understand the effects of the launch
of the new software on costs, profitability and retention.
These issues are further explored in a paper by Cuganesan and Dumay (2009), whose
objective is to visualize the relationships among intangible assets to managers.
Compared to Cuganesan (2005), the building process of the map is analyzed in greater
depth. Through a series of interviews with the managers and employees of a company in
the Australian financial sector and using a software-based analysis solution, the authors
extract a number of factors related to intellectual capital as well as the links among them.
This leads to the development of two maps. The first one relates to the process of
creating value for the company, while the second one concerns the value creation process
for the customer. So, the particularity of this contribution consists in adopting a double
“perspective”: i.e. the perspective of the company and the perspective of the customer. In
fact, the combined analysis of these two maps shows that they are linked to each other,
forming, as a consequence, two sides of the same coin. Moreover, the authors identify
what they denote as “abstract indicators.” However, these are not indicators in the sense
of key performance indicators. Rather, they are action-oriented initiatives (creating value
for the customers, beating the competition, coming up with innovative products) which
represent the nodes of the map.
The contributions of Carlucci and Schiuma (2006, 2007) can be considered an evolution
of the study by Marr et al. (2004). Here too, the aim is to visualize and analyze the
relationships between the knowledge assets and the company’s performance in a new
product development department in a manufacturing firm. The maps are built through the
use of focus groups and interviews involving the company’s top management and the
managers of the R&D department. Carlucci and Schiuma (2006) focus on the link between
knowledge management and the company’s business performance. In such a context, the
purpose of the map is to support the company in planning and implementing knowledge
management initiatives in order to achieve the performance objectives. Carlucci and
Schiuma (2007) advance this theory by applying the analytic hierarchy process (AHP)
methodology to weight the knowledge assets according to their potential impact
for achieving the performance objectives. This allows the company to rank its knowledge
assets for the sake of intervention priorities.
However, both papers are aligned to Marr et al. (2004) in regards to the measurement
perspective. The indicators used to identify the impact of the knowledge management
initiatives (product design activity time and time to produce the prototype) are not
extracted from the map. Moreover, the potential relationships and the trends of these Intellectual
indicators are not explained. capital
In the last paper of the literature review section, Jhunjhunwala (2009) highlights the
relevance of discovering the network of interrelated intangible assets for understanding measurement
the value creation process of a company. In particular, the author proposes three
generic maps for the hotel industry, the software industry and the pharmaceutical
industry. These models visually represent the key intangible variables as well as their 529
interrelations, both of which would have to be managed in order to increase the overall
value creation. For example, for the hotel industry, the map identifies value drivers such
as the chain brand or the service quality, in terms of reception, restaurant and room
service. Moreover, the author proposes to match the graphic representations to a set of
indicators in order to validate the cause-effect chain. The aim of this “matching” is to
ensure that each intangible asset in the map is performing as desired. However, the
proposed indicators are not directly extracted from the map. Rather, they are generic
intellectual capital indicators. This means that their applicability to single companies
may be limited because they are not “tailored” to specific needs and features.
Although the studies analyzed above are heterogeneous in terms of features and
building processes, a common denominator can be identified in their purposes. All of
the maps are constructed for the sake of improving the management of tangible and
intangible value drivers and tangible assets, increasing, as a consequence, the value
creation related to the company as a whole or to a particular process or function.
However, all of the above-mentioned contributions undervalue the extraction of a set of
specific indicators from the maps. Despite the fact that they, in general, suggest the
identification of performance measures, they do not fulfill this aspect sufficiently. As a
consequence, the usefulness of the map is limited and some of its potentialities are left
unexploited. Even when there is an attempt to match some indicators to the maps, as in
the contributions of Fernström et al. (2004), Marr et al. (2004), Carlucci and Schiuma
(2006, 2007) and Jhunjhunwala (2009), the effects of this action for managerial purposes
are not fully utilized.
The identification of specific indicators from the causal maps would potentially allow
for the measurement of both the static aspect of intellectual capital (the stock of intangible
resources at a company’s disposal) and the dynamic aspect of this phenomenon (the
way in which tangible and intangible resources combine with each other in order to
generate value), much in line with the arguments put forth in the Danish guideline for
ICS (Mouritsen et al., 2003; Mouritsen and Larsen, 2005). The theoretical contribution of
this paper thus rests on the assumption that managers should learn to build and to refine
causal maps for visualizing the company’s intellectual capital. These maps should be
enriched through appropriate indicators that can improve the existing measurement and
management practices of intangibles. These new skills could potentially improve the
decision-making process revolving around the use of the intellectual capital in its
operational context, avoiding the mere attempt to find a “fit” between the company’s
intellectual capital and one of the existing measurement frameworks.

3. Description of the case study: the Gemini network

The Gemini network is a network-based business model composed of four companies
located in the Northern Jutland region of Denmark. The Gemini network has been a
part of the International Centre for Innovation (ICI) project, a five-year research project
aiming at developing ten new network-based business models and working on
improving the globalization potential of them. This particular network is concerned
JIC with the use of location data from a tracking system which generates information
14,4 about mobile devices with activated bluetooth senders, i.e. the information about the
geographic location of people at a given point in time. The companies involved in the
network aim to use new technologies to develop new products and services for
business enterprises and end users who can make use of the data. The data on people’s
movements is, for example, potentially useful for shopkeepers, retailers’ associations
530 and shopping malls in order to support their marketing.
This network includes four main actors, which we choose to call: Sensor, Engineer,
Mall and Union. Sensor is a small and flexible company, which acts as the technology
provider of the network. This company owns the technical competences needed to
create and improve a technology solution able to track people’s movements. In
particular, Sensor produces the Bluetooth units that detect mobile devices in a certain
circumference. Engineer is a big and well-known consultancy company that acts as a
bridge between Sensor and the customers, i.e. Mall and Union. This company’s main
task is to understand the customer’s needs through its commercial competences and to
convert them into relevant solutions though its technical knowledge. In other words,
Engineer has to explain to the customers why they need Sensor’s solution and to
facilitate Sensor’s putting more intelligence in the system in order to meet the needs of
the customers. From the perspective of Sensor and Engineer, creating value means
earning revenues from the bluetooth units and from the consulting hours sold to
support and maintain the system.
Mall is a shopping center, which has been a test pilot for the tracking system.
In particular, the center manager would like to know how long people stay in the
shopping center, how they move around the shopping center, how they get to
the shopping center and where they walk to afterwards. This kind of information
can improve the manager’s decisions on advertising, staffing, shop location and mixture
and leasing contracts; as a consequence, it would increase Mall’s value creation in terms of
number of visitors, time spent by the visitors in the shopping center and the shops’
turnover (profit). Union is the association of retailers in the city. Union’s manager would
like to know where people start their shopping trip, how much time they spend in each
area of the city and the effects of special events on the number of visitors and the duration
of their stay. The availability of this information can provide a much more precise picture
of which areas in the city people are visiting, thus improving the decision-making process
for event planning and shop location. As in the case of Mall, this improvement can affect
Union’s value creation process in terms of increasing member satisfaction and funds
raised from sponsors (members, local government, companies, etc.).
Empirical intellectual capital research focusses mostly on the value creation process
of single companies, essentially undervaluing the possibility that companies may
generate value creation from a business network perspective. Perceiving companies
merely in terms of value chains has been gradually overtaken by the idea of network-
based business models (Allee, 2000). The nature of business relationships has changed
from intimate and formal to free-flowing and flexible insomuch as the boundaries of
the single companies cannot be clearly identified (Allee, 1999). A network consists
of specific roles and value interactions oriented toward the achievement of a particular
task or outcome (Allee, 2008) and other types of business relationships such as
strategic alliances, joint planning activities and creative partnerships also emphasize
the intangibles activated in the network (Allee, 2002).
Although network analysis is becoming more and more important in intellectual
capital research, few studies have contemplated how the intangible resources of
companies interact to create value for the whole network (Green, 2006; Andreou and Intellectual
Bontis, 2007; Allee, 2008; Solitander and Tidström, 2010; Peng, 2011). capital
For this reason, then, the Gemini network studied poses an extremely interesting
case because the interactions among the composing companies are very tightly measurement
knit. The existing knowledge resources and the relationships among them are
fundamental for the development of the network itself. Sensor and Engineer are
knowledge-intensive companies and their technical and commercial competences 531
can enable the value creation for the whole network. The synergy between these
companies is very strong: together they can reach collective goals they cannot
achieve on their own. On the one hand, good relationships with customers are
established through Engineer’s reputation and image. This allows Sensor to access
new customers and to further develop its business. On the other hand, Sensor is
able to provide high-quality solutions, which can satisfy the customers’ needs.
Engineer is aware that it would be difficult to find other companies that can deliver
the same technology. This network is highly dynamic because its purpose is to create
new knowledge. Moreover, the involved competences and capabilities are highly
specialized and manifold and the geographic proximity strengthens even further the
unplanned information exchange. In other words, the Gemini network displays all
the features of an innovation network (Pöyhönen and Smedlund, 2004), which can
potentially provide highly valued services (Smedlund, 2008).
As a consequence, aligning tangible and intangible resources of the single companies
to meet the customers’ expectations and understanding their contribution to the value
creation of the whole network is essential for feeding the network itself.
In such a context, in fact, measurement at a holistic network-level can be helpful in
order to reach this target. Analyzing the performance of one company is not enough
because it only represents a share of the whole value creation process. The performance
of the whole network depends on the efficiency and the effectiveness of the interactions
among the actors involved. In some cases, a performance improvement of an individual
company can even lead to decreasing the performance of the network as a whole
(Kulmala and Lönnqvist, 2006). Supplying measures at a network level and identifying
the links among them can provide information on the cumulative value creation, which
depends on the joint efforts of several companies. In other words, creating a set of
indicators for the network as a whole can help to pinpoint the actual development needs
in the networked processes. Inter-organizational performance measurement is becoming
more and more important in fast-moving and knowledge-intensive environments. These
arguments strengthen even further the choice of the Gemini network. Measuring and
managing intellectual capital activated in the network and its dynamism should be a
priority for the companies involved (Figure 1).

4. Methodology
The complex nature of intellectual capital makes the use of the case study research
method particularly suitable (Mouritsen, 2006). This method, in fact, allows for a
holistic and deep investigation of a complex phenomenon in the real-life context in
which it takes place, especially when it is not possible, or even desirable, as in this case,
to separate the phenomenon from the context (Yin, 2002; Lukka, 2005; Chiucchi, 2009).
Through case study research, the researcher can directly observe the phenomenon
investigated and come into direct contact with those who take part in it. Moreover, the
choice of a single case makes it possible to increase the in-depth nature of the analysis
by getting a richer and thicker understanding of the phenomenon and the context.
JIC
Trust, image,
14,4 reputation, knowledge
Mall
of customers’ needs

532
Sensor Engineer

Converting customers’ Union

Figure 1.
needs into system
The companies involved
features through
in the Gemini network
technical knowledge

4.1 Data collection and analysis

The building process of a causal map aims at eliciting mental models triggered by actors
in certain situations. The nature of these models is mainly implicit because they are
deep-seated in individuals (Fiol and Huff, 1992). The conversion from implicit to explicit
is a very hard task because the concepts and the relationships are difficult to stimulate
and communicate so that the individuals themselves consider the explanation of their
decision rules particularly critical (Ambrosini and Bowman, 2001). In management and
organization research, several methods have been proposed in order to build causal maps.
These methods differ mainly in two aspects: the technique used to elicit the cognitive
material and the technique used to identify concepts and relationships. Concerning the
first aspect, a distinction can be drawn between direct and indirect elicitation procedures
(Hodgkinson and Clarkson, 2005), where the indirect procedures use secondary data
sources such as texts written by the author, minutes of meetings, reports or other
company documents (Fahey and Narayanan, 1989; Fiol, 1989; Barr et al., 1992). By
comparison, the direct procedures use primary data sources obtained specifically for the
purposes of the research. The use of this data collection procedure allows for the building
of causal maps that represent the management’s thinking in a more precise manner than
those built from secondary data sources (Eden and Ackermann, 1998).
Semi-structured and unstructured interviews are the most widely used by researchers
when building managers’ causal maps (Eden and Spender, 1998). Their high degree
of flexibility allows the interviewer to deeply understand the conceptual categories
used by the interviewee as well as his/her interpretations of the reality. Moreover,
the opportunity to conduct the interview on the basis of the answers given by the
interviewee enhances the comprehension of the motivations that drive his/her
decisions. Interviewing managers allows them to reflect on the actions that they
usually put in place. In this way, the researcher can discover aspects of behavior which
had remained tacit until that moment. The aim is to gradually uncover deeper and
deeper layers of the managers’ knowledge. For these reasons, this paper is based on
five semi-structured interviews with the main actors of the Gemini network. These
interviews were conducted at the individual level because tacit knowledge is typically Intellectual
personal (Polanyi, 1962). For the aim of the paper, the researchers identified five capital
relevant themes, which also represented the main sections of the interview guide:
measurement
(1) the respondent’s tasks and company’s overall business;
(2) causes of organizational success and value drivers;
(3) relationships with the main business partners; 533
(4) indicators used for the decision-making process; and
(5) specific information on the location data project.
During the interviews the interviewers made sure to ask reflexive questions and to ask
for examples along the lines suggested by Kreiner and Mouritsen (2005). Asking for
examples, storytelling and anecdotes forces the interviewees to explain what really
happens, stimulating them to provide detailed information and triggering, in turn, other
stories and thoughts. Through story and language, in fact, individuals give meaning to
events that occur and to their actions and they can organize their experience. In this way,
it is possible to discover how the value drivers come “into action” in the company under
analysis. Regarding the identification of concepts and relationships, Abernethy et al.
(2005) draw a distinction between three options: computerized discovery of causal links,
ethnographic analysis of interview data, interactive mapping by expert participants. The
first one relies on qualitative database software in order to code the qualitative data and
to detect relations among concepts in the database of interview transcripts. The second
one is the traditional method used to analyze qualitative data, i.e. the ethnographic
interpretation of the interviews and the interview context. In this way, the researcher can
identify the concepts and the relationships among them through his/her understanding
of the context and by interpreting the perceptions of the interviewees. The third one
directly involves the interviewees in the map-building process by asking them to identify
the relationships among the concepts extracted from their prior interviews. This option
emphasizes the causality experiences of the interviewees so the researcher merely has to
support them to fulfill this task.
The use of this method would make the participants more committed to the
resultant map. However, it entails some drawbacks which have to be considered.
Engaging the participants in the map-building process is a very complex task from a
cognitive perspective. There is a distinction between the individual beliefs, i.e. the
interconnected beliefs about various contexts which belong to individuals, and the
collective beliefs, i.e. the beliefs which belong to a group. It is essential to achieve a high
level of agreement on the meaning of the concepts which are relevant to building the
map. This is fundamental to identifying the relationships among concepts and to
ensure that the process is reliable.
Some difficulties can surface during the building process if the participants do
not form a tightly cohesive group, with a common language and shared meanings
(Langfield-Smith, 1992). This risk is very high in the Gemini network, in which the
participants belong to different organizations and they do not know each other very
well since the relationship is quite young. On the contrary, in a highly cohesive work
group, the problems arising from differences in meanings that participants attach to
concepts would be minimal.
For the sake of this paper, the ethnographic analysis of interview data seemed to be
particularly fruitful. One of the researchers, in fact, had a very good knowledge of the
JIC companies involved in the network, i.e. the context in which the intellectual capital is
14,4 deployed. The deep understanding of the context from his current and prior experience
helped to identify the relevant concepts as well as to interpret the nature and the
intensity of the causal links among them. As intellectual capital is context-specific, the
use of this method increases the chance that the causal map reflects the real way in which
it is deployed in the network rather than merely showing associations discovered by
534 software or the partial points of view of single interviewees. However, the chosen method
also presents some drawbacks. On the one hand, the researcher runs the risk of giving
more weight to confirming facts rather than to disconfirming evidence. As a
consequence, he/she could push into the background information that does not conform
to his/her interpretation (Nisbett and Ross, 1980). On the other hand, building a causal
map is a very complex task from a cognitive perspective and this could entail the risk of
conducting a partial and incomplete analysis (Abernethy et al., 2005).
It was sought to minimize these drawbacks through investigator triangulation
(Ryan et al., 2002) in order to reduce the biases related to the personal convictions of the
researchers and to enable a deeper analysis. All the interviews were transcribed in their
full length, and the researchers applied a structural coding approach in the analysis of
them (Krippendorff, 1980), through a coding tree reflecting the sections included in the
interview guide. After coding the interviews, the researchers drew up a list containing
the value drivers considered critical by the interviewees, i.e. the nodes of the map. The
data analysis was initiated by identifying the relationships among the nodes and
followed by identifying the causality types (positive or negative) among them.
Finally, the resultant causal map was used as a platform from which to extract
appropriate indicators oriented to measuring the dynamic aspect of the intellectual capital
deployed in the network. Indicators are financial and non-financial metrics used to evaluate
success in achieving objectives, solving problems, containing risks and enhancing
strengths (Ferreira and Otley, 2009). Their design process can be sorted into identifying the
key objectives to be measured and creating the indicators (Bourne et al., 2000).
Even though some authors have proposed performance measurement at the
organizational network level (Leseure et al., 2001; Zhao, 2002; Bullinger et al., 2002; Bititci
et al., 2005), there is still a lack of contributions aimed at measuring and managing the
key factors in collaborative activities and inter-organizational relationships (Verdecho et
al., 2009). These frameworks do not provide methods to identify all the particularities of
the business network and to eliminate contradictions existing among actors who attempt
to increase local performance to the detriment of network’s objectives. Moreover, there is
a lack of tools able to support the creation and the control of performance measures in an
analytical way, both on a network and on a single company level (Alfaro et al., 2007).
The causal map aims to reflect the network’s understanding of relationships
among key knowledge resources and capabilities, key objectives, key problems and key
decisions. The identification of these key elements is the starting point for designing the
indicators. In other words, the map answers the question “what should we measure?” so
it contributes to enhancing the process of identification and selection of indicators because
it increases the chances that measures:
. are related to specific and achievable goals (Goold and Quinn, 1990);
. are based on quantities that can be influenced, or controlled, by the user alone or
the user in cooperation with others (Lynch and Cross, 1991);
. have an explicit purpose (Neely et al., 1997);
 . reflect system causality (Kaplan and Norton, 1996a); and Intellectual
. provide a network vision (Gunasekaran et al., 2001). capital
One or more indicators for each node of the map have been identified in order to measurement
monitor the critical aspects of each key element. The main aim is to provide each
manager with information useful for handling his/her part of the network without
losing sight of the whole picture. 535
5. Analysis and discussion
5.1 Visualizing and understanding the intellectual capital dynamism in the Gemini
network
The creation of the causal map permits a visualization of the tangible and the
intangible flows established in the Gemini network. Figure 2 provides a representation
of the map displaying the intellectual capital dynamism in the specific business context
in which it is used. The nodes of the map are the value drivers considered relevant by
the interviewees, while the arrows identify the relationships among the value drivers.
The colors of the arrows describe the nature of the link: green arrows depict the
positive relationships, i.e. one value driver positively affects another one; red arrows show
the negative links, i.e. one value driver negatively affects another one. Moreover, green
and red dotted arrows represent potential positive and negative relations. Analyzing the
causal map may allow the managers to understand how intellectual capital really works
in the Gemini network. The causal map can represent the particular way in which value is
generated or destroyed, i.e. it has the potential to bring out strengths and weaknesses of
the network. The map shows that the intellectual capital flows between Engineer and
Sensor work quite well. There is a strong synergy because these two companies are
highly integrated at both a commercial and a technological level. From the Sensor side,
the relationship with Engineer is fundamental for its value creation process.
Through the Gemini network, Sensor is able to access new customers and to further
develop its business through the goodwill that Engineer brings into the network in
terms of reputation and image. Therefore, the exploitation of Engineer’s intellectual
capital element is profitable for Sensor too, which would otherwise be forced to build
relationships with the customers from scratch. From the perspective of Engineer,
deploying Sensor’s technical competences is very important in order to satisfy
customer expectations. In particular, the technical knowledge held by Sensor makes it
possible to convert customer needs into system features by including a greater degree
of intelligence in the solutions. Engineer’s managers are aware that only Sensor’s
technical solutions have the necessary level of quality to be used in practice. So, the
intellectual capital interactions between these two companies are very intense, because
they both know that the reciprocal exploitation of their respective intellectual capital
elements is advantageous for both of them.
The causal map also highlights the fact that the intellectual capital flows between
Engineer and the customers do not work properly. Through its commercial
competences, Engineer should be able to understand the customers’ expectations in
terms of information needs. In other words, Engineer should recognize how to improve
the information quality for Mall and Union in order to allow Sensor to convert these
needs into features in the solution. However, Engineer does not seem to be deploying
its commercial competences in the right manner. There seems to be a misalignment
between the perspectives of Engineer, Mall and Union. The customers see the previous
meetings with Engineer like sales meetings rather than network sessions focussing on
 JIC
14,4

536

Figure 2.
The causal map of
the Gemini network
ENGINEER Decisions on
VALUE shop mix
Engineer ‘s CREATION
technical
competences
Improving
Instability in information Decisions on
Engineer’s quality for advertising
team Mall MALL VALUE
CREATION

Increasing the
time spent in
Understanding
the shopping
Mall’s
Engineer’s center
information
commercial
needs
competences
Engineer’s Decisions on
image and shop staff
reputation Union’s and
Mall’s
financial
Engineer’s resources
relationships
with other
technology
providers

Union’s image

Number of
units used

Improving UNION VALUE

Sensor‘s
information CREATION
technical
quality for
competences Fundraising
Union

SENSOR
VALUE Understanding
CREATION Union’s
information
Getting new
needs
members
their information needs. As a consequence, Mall and Union are not willing to pay for Intellectual
the solution because they still do not have a clear view of its strengths and weaknesses. capital
Moreover, the understanding of the customers’ information needs is also hindered by
the relatively large turnover in Engineer’s team that is in touch with Mall and Union. measurement
The team has changed members from time to time and so the clients have noticed that
they cannot identify a stable team with which to build a closer relationship based on
more frequent interaction. This problem could also be related to the lack of proper and 537
timely communication between the parties.
In a sense, the commercial competences of Engineer are the weakest point in the
network because they are not sufficiently able to show and explain to customers the added
value which they can get from Sensor’s solutions. As a consequence, this intellectual
capital element blocks the value creation for the companies involved. The awareness of
the strong and weak points provides the managers with the opportunity to maximize the
former and minimize the latter. In this way, managers can make the network’s value
creation process less fragile and vulnerable. Moreover, the causal map stresses a potential
non-linear effect that could destabilize the network as a whole. Engineer’s image and
reputation is also relevant in order to build relationships with other technology providers.
The flow between these intellectual capital elements can potentially destabilize the entire
system. The entrance of a new technology provider and the resulting exclusion of Sensor
would mean redefining all the tangible and intangible value drivers activated in the
network as well as the relations among them. The map also shows that intellectual capital
“in action” creates emergent properties, which cannot be traced back to the individual
value drivers (Nielsen and Dane-Nielsen, 2010). Value creation is thus related to the
emergent properties that result from the coupling of the tangible and intangible value
drivers, which takes place in this particular context, i.e. the Gemini network.

5.2 Measuring the intellectual capital dynamism in the Gemini network

The analysis highlights that the building of a causal map could be very relevant for
managers because, by identifying problems, risks and opportunities, it may enable
interventions. However, the usefulness of the map for managerial purposes could
increase even further if it is used as a platform for identifying indicators to measure the
intellectual capital dynamics. Indicators can potentially reflect the value creation process
because they are “tailored” to the specific value drivers and relationships that take place
in the network. In particular, the indicators should be coupled to the nodes of the map, i.e.
the value drivers. Table I contains the set of indicators derived from the causal map. First
of all, using the causal map as the foundation from which to extract a set of indicators
may improve the selectiveness of the measurement system. The map forces the company
to focus only on the critical value drivers and the relationships among them. This can
increase the likelihood of being able to provide a moderate number of indicators with
high information content, avoiding the risk of focussing the attention of managers on
secondary aspects. Moreover, extracting indicators from a causal map may provide
a balance between lagging measures, typically financial and leading measures, typically
quantitative-physical and qualitative. Lagging indicators are for example suitable for the
nodes associated with the value drivers directly linked to the value creation.
Table I also contains proxy indicators. Some “soft” aspects, like the level of
competences or customer satisfaction, are very difficult to measure because of cost,
complexity and timeliness of data collection. Proxies approximate the phenomenon
in the absence of direct measures. For example, “R&D expenses/total expenses”
can approximate the level of “Sensor technical competences.” Similarly, “training
 JIC
14,4

538

Table I.

from the causal map

The indicators extracted
Indicators for sensor Indicators for engineer Indicators for mall Indicators for union

R&D expenses/total expenses Training expenses Financial resources to invest in the Financial resources to invest in
Revenues from location data project Hours spent for training on the job location data project the location data project
Average earnings per unit Revenues from location data project Number of features satisfied/ Number of features satisfied/
Sales from Engineer’s customers/total sales Number of meetings with Sensor number of features requested number of features requested
Total revenues/man hours Average earnings per unit Variation (increase or decrease) in Variation (increase or decrease)
Number of units sold to Engineer Total revenues/man hours number of visitors to the shopping in funds raised
Number of meetings with Engineer Team turnover center Variation (increase or decrease)
Number of interactions with Mall Variation (increase or decrease) in of members
Number of interactions with Union time spent by visitors in the
Number of units sold to Mall shopping center
Number of units sold to Union Turnover
Number of interactions with other Total amount of leasing contracts/
technology providers number of tenants
expenses” and “number of features satisfied/number of features requested” by Mall Intellectual
and Union can be considered proxies for the level of “Engineer technical competences” capital
and the level of “Engineer commercial competences,” respectively. Regarding the node
“understand the information needs” of Mall and Union, the “number of units sold” can measurement
approximate this ability.
Moreover, the table includes measures such as revenues from the location data
project for Engineer, the average earnings per unit sold for Sensor’s and Mall’s profits. 539
These indicators express the bottom line of the value creation process, i.e. the final
effects of the managerial actions. As a consequence, they are oriented to the past and
they do not have the ability to measure the current actions. For this reason, the creation
of leading indicators has the potential to monitor and govern the causes that affect the
value creation. In the Gemini network, Union’s indicator “Financial resources to
invest in the location data project” could be leading compared to the measure
“Number of units sold to Union.” Similarly, Mall’s indicator “Number of features
satisfied/number of features requested” can potentially affect the trend of the measures
“Variation (increase or decrease) in number of visitors to the shopping center”
and “Variation (increase or decrease) in time spent by visitors in the shopping center.”
This might happen because the improvement in the quality of the information on
people movements can support and improve the decision-making process of Mall,
enabling the shopping center manager to take decisions directed to increasing the
number of visitors and the time spent by visitors in the shopping center. However,
the distinction between leading and lagging indicators is relative. For example, the
“Variation (increase or decrease) in number of visitors to the shopping center” could be
lagging compared to the “Number of features satisfied/number of features requested,”
but, at the same time, it could be leading when related to Mall’s profits.
In addition, the indicators extracted from the map could provide the management
with relevant information on the timing of actions on the value drivers. In particular,
monitoring the trend of indicators over time could help to “capture” the length of
the lag, that is the time it takes for an indicator of a value driver to begin to influence
the indicators of related value drivers, first, and the financial performance, later. For
example, a measure that “captures” Sensor’s technical competences (e.g. investments
in R&D) is not likely to affect the financial performance in the short term. Rather it
would need a temporal lag of several months. In contrast, leading indicators related to
the units sold (e.g.: number of units sold to Engineer) could influence the financial
indicators with a shorter lag. Managers should pay attention to this aspect because the
lack of an immediate effect on financial performance may simply mean that actions
take time before generating an economic benefit. Therefore, management actions that
may be deleted or changed because they generate no immediate effects, might instead
be reconsidered when managers become aware of their potential effects in the medium
and long term.
Furthermore, the indicators extracted from the map can potentially provide useful
information on the persistence of the effect of a particular action. In fact, the effect
might be only temporary and affect the indicator trend of the value driver to which the
action is directed only for a short period of time. Or, the effect might persist and
influence the indicator trend for longer periods of time. For example, a managerial
action directed toward increasing the level of Engineer’s technical competences might
affect this value driver and the trend of its indicators (e.g. hours of training on the job)
for a long period of time. On the contrary, the effect of an action geared to increasing
the number of units sold to Mall might persist only in the short term.
JIC Finally, indicators could play a leading role in the refining and updating process of
14,4 the map. Relationships among intellectual capital elements are not steady by nature:
they can change in intensity or nature. So, the bundle of indicators might help to test
the existence of the relations as well as to understand if and how the intensity and the
nature of the links vary over time. In other words, the trend of indicators may signal
timing, persistence or intensity, which are not consistent with those considered in
540 the “initial” causal map. This could provide useful information on possible changes to
be made in order to refine and update the map over time. For example, Engineer’s
commercial competences have been identified as the weakest point in the network
because this negatively influences value creation for both Engineer and Sensor as well
as the understanding of the information needs of Mall and Union. The effects of
managerial actions directed to improve this value driver should be reflected in the
trend of the indicator “Number of features satisfied/number of features requested” by
Mall and Union. The improvement of this indicator over time could mean a change in
the nature (from negative to positive) of the relationship between the Engineer’s
commercial competences and the other value drivers connected.
In the same way, the “initial” causal map displays a negative link between the
instability in Engineer’s team and the ability to understand Mall’s information needs. A
decrease of the indicator “Team turnover” could diminish the negative impact of the
former value driver on the latter. Consequently, this might provide managers with
relevant information in order to update the map. The opportunity to refine the causal
map over time might provide the measurement system with a high degree of flexibility
and adaptability, which is consistent with the intellectual capital dynamism, i.e. the real
nature of intangible assets.

6. Conclusion
The analysis of intellectual capital dynamics represents a relevant research area, which
is receiving growing attention in the literature. Measuring the dynamic aspects of
intellectual capital is essential for companies to obtain information in order to govern
their value creation process. However, the existing frameworks for intellectual capital
measurement are not able to achieve this goal because they are mainly anchored to the
static dimension of this phenomenon. The conceptualization of intellectual capital as a
complex web of intangible assets entails a reconsideration of the tools by which it is
visualized, measured and managed. For this reason, this paper has presented an
empirical study into the intellectual capital dynamics of a network of companies through
the use of the causal mapping. The creation of a causal map can help to visualize and
understand how intellectual capital really works in the specific business context in which
it is deployed. This potentially would permit the domination of the real nature of this
phenomenon by understanding the relationships among its elements and the creation of
value, its potential non-linear effects, its strengths and its weaknesses.
The causal map has also been used as the foundation for creating an ICMS.
Exploiting the map as a platform for identifying a set of indicators can contribute to
filling our research gap in three different but linked ways: by offering the opportunity
to reach a balance between leading and lagging indicators; by providing information
on the length of the lag and the persistence of the effects of managerial actions; by
signaling when and how to refine and update the causal map.
The combination of these factors can support the measurement and the management
of intellectual capital dynamism. From a static perspective, the causal map may allow
the switch to a dynamic view by examining, first, the direct impact of managerial
actions also on indicators of other related value drivers and, where possible, the indirect Intellectual
impact on value creation. This matching potentially permits the measurement not only capital
of the individual value drivers, but also of the relationships among them, providing the
opportunity to manage the links and to increase the positive impact of a value driver on measurement
the related ones. Such a measurement system is strongly oriented toward action as it
can provide relevant and timely information to support the managers’ decision making.
The identification of indicators from the mental model of managers who manage the 541
value creation process can increase the overall quality as well as the signaling ability of
the measurement system. This can lead to an increased likelihood that decisions cause a
series of multiple effects consistent with the expected results.
In other words, extracting indicators from the intellectual capital causal map can
increase the information content and improve the predictive ability of the measurement
system, enhancing, as a consequence, the chances for managers’ interventions. On the
one hand, the building of the causal map makes it possible to “deconstruct” intellectual
capital elements and to “reassemble” them in order to ascertain their identity and use in
specific settings (Mouritsen, 2006). On the other hand, extracting indicators from the
causal map allows us to measure intangibles “in action,” avoiding the “extraction” of
the resources from the specific operational setting in which they are employed
(Mouritsen, 2009). Consequently one of the main implications of this paper is that the
existing ICMSs may also improve their usefulness by including these dimensions. In
closing, it is important to acknowledge the limitations of this paper. First, the use of a
single case study to provide in-depth and rich data limits the generalizability of the
observations. Second, the proposed approach has not been implemented in practice.
Even though the discussion is based on a review of the intellectual capital literature,
the arguments are the authors’ interpretation of the facts.
The causal map proposed in this paper could be used as the foundation for
applying the interactive method in the subsequent steps of the research. It allows
the researchers to explain to the participants how the map is built, the meanings
of the nodes and why they identify those relationships, providing them the
opportunity to discuss the concepts, to change them and the relationships
among them. This initial alignment on method, meanings and relationships among
the managers is fundamental to attaining a common platform and to starting the
construction of a consistent map.
Thus, we call for further research to investigate the measurement of intellectual capital
dynamism through interventionist case studies in order to put the causal mapping
approach into practice. Compared to non-interventionist case studies, interventionist
research makes it possible to reach a much deeper knowledge level on the individuals
involved, the context analyzed, the attached meanings and the triggered effects (Lukka,
2005; Jönsson and Lukka, 2005).

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Dr Marco Montemari can be contacted at: [email protected]

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