Benchmarking and learning organizations:ranking methods to identify "best in class"

The benchmarking analysis of organizational learning capability considers a set of criteria: clarity of purposes and mission, leadership commitment and empowerment, experimentation and rewards, transfer of knowledge, teamwork of group problem solving, etc. For this reason it assumes the configuration of a multicriteria analysis. In the traditional benchmarking the multicriteria problem is solved throughout the construction of a synthetic indicator obtained by averaging all scores assigned to an organization on the different criteria. This methodology presents many theoretical and empirical disadvantages. This paper illustrates the advantages, in terms of greater flexibility and realism, connected to the application of the multicriteria methodology founded on the notion of outranking. In fact, such a methodology solves the multicriteria benchmarking problem without using the averaging rule adopted by the traditional benchmarking approach

Value creation and sustainability in knowledge-based strategies

The purpose of this paper is to place the value creation process within sustainable growth strategies. Building on Drucker (1968, 1999a, b), Pulic (2000, 2004, 2008) and other papers by the same authors (Iazzolino and Laise, 2013) the specific aim of this research is to propose an accounting-based framework able to: distinguish between knowledge-intensive firms (KIFs) and nonknowledge intensive firms (nonKIFs); and investigate the contribution of the two sets of firms (KIFs and nonKIFs) to overall sustainability, from a social point of view, of the economic system. Design/methodology/approach – The paper uses the notion of value added (VA) (Pulic, 2000, 2004, 2008) as the main indicator to measure the value creation in a knowledge economy context. As regard the first point of the framework, the approach is based on the analysis of VA and its components, starting from a reinterpretation of the concept of value added intellectual coefficient made by the same authors of this paper. An empirical analysis based on the composition of VA in ten Italian industries, by using an overall sample of 1,000 firms, has been carried out and is described in the paper. As regards the second point, the paper analyses, from a theoretical point of view, the necessary conditions to set up a sustainable value creation strategy in social terms, using the conceptual categories introduced by Drucker (1968, 1999a, b) and Pulic (2000, 2004, 2008). Findings – From results of the empirical analysis it emerges that: first, in traditional industries the weight of the cost of employees on VA (human capital investments) is less than the other sectors (low human capital intensity). In these sectors the value creation strategy is mainly based on “dead knowledge,” embedded in machines (physical capital); and second, in nontraditional industries (consulting, advertising, research, etc.) the economic value creation is mainly based on “living knowledge,” embedded in human resources (high human capital intensity). In these sectors we have lower productivity of work (VA/human capital) and higher employment. Practical implications – The framework proposed makes it possible to reduce the risk of myopic valuation of economic performance. Through this methodology it is possible to highlight the effects of sustainable strategies based on knowledge investments oriented toward the stakeholder value theory and corporate social responsibility. The approach can be very useful for top managers and for accountants, as it underlines the importance of the VA income statement and constructs a strong link to the themes of knowledge management. Originality/value – The originality and the value of this methodological proposal can be appreciated by taking into account that in the literature there is no accounting-based methodology that is able to identify: the knowledge-intensive firms; and the firms that can contribute to overall social sustainability, within the set of all firms. © 2016, © Emerald Group Publishing Limited

Value added intellectual coefficient (VAIC): A methodological and critical review

Purpose: The purpose of this paper is to study, mainly from the point of view of methodological accounting principles, the value added intellectual coefficient (VAIC), introduced by Pulic as a measure of intellectual capital efficiency (ICE). More specifically, the aim of the analysis is to investigate the strengths and weaknesses of the VAIC, primarily from the accounting theory perspective.Design/methodology/approach: The approach to the study of Pulic's contribution is as follows: first the authors submitted Pulic's methodology to a "conceptual" test, in order to check whether it contradicts any basic accounting principles. Then the results of this methodological test were compared to those obtained by the authors who have criticized Pulic's proposal, in order to check for any concordance or discordance with the literature. Findings: Several authors have discussed the crucial aspects of the VAIC. In this paper the focus is primarily on Andriessen's concerns, since they relate to the theoretical accounting aspects of Pulic's proposal, which is the topic of the paper. First of all, the authors have found that the suggestion of Pulic, centered on the Value Added Income Statement, does not modify or contradict any of the fundamental accounting principles. Therefore the criticisms made by Professor Andriessen should be subject to future research. Furthermore the performance measure proposed by Pulic (VAIC) is not a genuine rival to the traditional methodologies (e.g. the Economic Value Added (EVA)), as instead emerges from Pulic's papers. VAIC and EVA measure different aspects of the performance and therefore may usefully live together in a context in which the performance is measured through multicriteria methodologies, such as the Balanced Scorecard, Skandia Navigator or Intangible Asset Monitor. Practical implications: The practical implications of the results are: the correct placing of Pulic's contribution into the accounting principles theory; and the manner for using the VAIC methodology in a multicriteria performance evaluation. The authors believe that both aspects have relevant implications for business accounting practice. Originality/value: The paper shows that almost all of the misunderstandings of the literature debate, regarding Pulic's proposal, arise from a "semantic shift" generated by the fact that Pulic uses the terms human capital and structural capital with a completely different meaning from that of the Skandia Navigator. Authors' hope is that the study described in the paper will contribute to a better understanding of: the way to calculate and to interpret the efficiency of intellectual capital (IC) in a correct manner; and the role of IC on firm multicriteria performances. © Emerald Group Publishing Limited