Copyright © 2002 by Nick Bontis A member of the Reed Elsevier group All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Recognizing the importance of preserving what has been written, Butterworth- Heinemann prints its books on acid-free paper whenever possible. Library of Congress Cataloging-in-Publication Data British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. The publisher offers special discounts on bulk orders of this book. For information, please contact: Manager of Special Sales Butterworth-Heinemann 225 Wildwood Avenue Woburn, MA 01801–2041 Tel: 781–904–2500 Fax: 781–904–2620 For information on all Butterworth-Heinemann publications available, contact our World Wide Web home page at: http://www.bh.com 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America A A BOUT THE UTHORS EDITOR Nick Bontis DeGroote Business School, McMaster University, Hamilton, Canada [email protected] Dr. Nick Bontis (Ph.D. University of Western Ontario) is an award-winning professor of strategic management at McMaster University and Program Director of the World Congress on Intellec- tual Capital. He is Associate Editor of the Journal of Intellectual Capital (the leading research publication in the field) and Director of the Institute for Intellectual Capital Research (a global research think-tank and KM consulting firm). He is Chief Knowledge Officer of Knexa.com Enterprises, which is the world’s first knowledge exchange and auction, and sits on a variety of advisory boards for several knowledge-based companies. He is widely recognized as a leading researcher in the fields of intellectual capital, knowledge management, and organizational learning and is an internationally sought-after keynote speaker and respected management consultant. His latest publications appear in a variety of journals, including Journal of Management Studies, European Management Journal, Management Decision, Knowledge and Process Management, Inter- national Journal of Technology Management, Journal of Internet Research, and International Journal of Management Reviews, among others. See www.Bontis.com for more information. CONTRIBUTING AUTHORS Philip R. Beaulieu Faculty of Management, University of Calgary, Calgary, Canada [email protected] Phil Beaulieu (Ph.D. University of Washington) is an associate pro- fessor teaching management accounting and internal auditing at the University of Calgary, who has also authored a course in advanced xvi WORLD CONGRESS ON INTELLECTUAL CAPITAL READINGS management accounting for the Certified General Accountants Asso- ciation of Canada. He is interested in the communication of intellec- tual capital measurements between firms and their investors and creditors. A related research interest is the provision of innovative assurance services, such as assurance regarding the reliability of sys- tems, by public accountants. Dr. Beaulieu has published articles in Contemporary Accounting Research, Accounting, Organizations and Society, and Auditing: A Journal of Practice and Theory. Laurie Bassi Human Capital Dynamics, Chevy Chase, Maryland, U.S.A. [email protected] Dr. Laurie Bassi, an internationally recognized expert in using sys- tems for measuring and valuing learning as a tool for continuous improvement, is the president of Human Capital Dynamics and a research fellow at the Accenture Institute for Strategic Change. In recent years, Dr. Bassi has served as the director of research at Saba and the vice president and general manager for research and enter- prise solutions at ASTD. While at ASTD, she worked with a consor- tium of employers to develop standardized, benchmarkable metrics for measuring both employers’ investments in education and training, as well as the learning outcomes that those investments create. These measurement systems, which were designed as a tool for continuous improvement, are now used in thousands of organizations around the world. Earlier in her career, Dr. Bassi was a tenured professor of eco- nomics and public policy at Georgetown University. She has also served as the director of several U.S. government commissions. David W. Birchall Henley Management College, Greenlands, Henley-on-Thames, Oxfordshire, U.K. [email protected] David Birchall is Director of Educational Technologies and Infor- mation Systems at Henley Management College and Director of the Centre for Business in the Digital Economy. He has worked on many innovations within Henley, including the development of e-learning systems and an e-library. He is a founding member of both the Future Work Forum and the Knowledge Management Forum at Henley. He has research interests in the areas of innovative practices in organizations and organizational implications of IT, knowledge management, and IT and management learning. He has published widely including Creating Tomorrow’s Organization and The New xvii ABOUT THE AUTHORS Flexi Manager. David joined Henley in 1974 and has been a profes- sor since 1983. He has held a number of senior posts at Henley, including Director of Research, Director of Corporate Programmes and Director of Graduate Business Studies. Manfred Bornemann Department of International Management, Karl Franzens University, Graz, Austria [email protected] Manfred Bornemann wrote his doctoral thesis, Measuring Instru- ments for Knowledge Management, at the Karl Franzens University, Graz, Austria. He is an independent consultant in the field of knowl- edge management and intellectual capital evaluation. Additionally, he is part time assistant professor at the Department of International Management at the Karl Franzens University, Graz, and gives lec- tures in general management, organizational theory, and knowledge management. He is an active guest lecturer in various other national institutions and has published several articles in the field of intellec- tual capital. Dr. Bornemann has presented papers at numerous aca- demic conferences in the U.S.A., Canada, Singapore, and Europe. David H. Brett Knexa.com Enterprises, Vancouver, British Columbia, Canada [email protected] David Brett is considered to be one of the pioneers of Web-based knowledge exchange. David created Knexa in 1999 as a way to financially reward people for sharing their knowledge. Considered by some KM experts to be a breakthrough in knowledge capture and sharing, Knexa has developed a worldwide reputation as a leader in its field, with partners in Europe and Australia. Mr. Brett’s business background includes sixteen years experience running public compa- nies on NASDAQ, the Toronto Stock Exchange, and the Canadian Venture Exchange. He holds a bachelor’s degree in Religious Studies from the University of British Columbia and is near completion in the executive M.B.A. program at Simon Fraser University. Per Nikolaj Bukh Aarhus School of Business, Denmark [email protected] Per Bukh is BDO Professor in Entrepreneurship and Growth at the Aarhus School of Business, Aarhus, Denmark. He has been a researcher for a project on intellectual capital–reporting organized xviii WORLD CONGRESS ON INTELLECTUAL CAPITAL READINGS by the Danish Ministry of Industry. Among his other research inter- ests are balanced scorecard, activity-based costing, and relationship marketing. Per Bukh has published a large number of articles in sci- entific journals, is a frequent speaker at business conferences, exec- utive seminars, and in companies, and has been consulting on the design of performance measurement, intellectual capital–reporting, and cost management systems with leading Nordic companies and organizations. Michael Charney ServiceWare, Parsippany, New Jersey, U.S.A. [email protected] Michael Charney is Director of Product Marketing and Research for ServiceWare, a developer of KM software and solutions for the eService industry. He has worked in the KM field for six years and has been responsible for KM consulting services, internal KM programs, and ongoing KM product innovations. As the original designer of Ser- viceWare’s KM methodology, he has developed both statistical and nonstatistical models for knowledge domain analysis and has con- sulted on, or managed, the implementation of dozens of KM systems. He speaks and writes on KM frequently, in both the national and inter- national arenas. Mr. Charney has a bachelor’s degree from the Univer- sity of California at Berkeley and a master’s degree from William Paterson University in New Jersey. Denis M. Coffey Requirements Engineering, KM and IC, Anteon Corporation, Rhode Island, U.S.A. [email protected] Denis Coffey received his B.S., M.S., and Ph.D. in Electrical Engi- neering from Northeastern University in 1962, 1964, and 1969; he further received an M.A. in Public Administration from University of Northern Colorado in 1981 and an M.Ed. from Lesley College in 1991. Dr. Coffey is a Corporate Program Manager at Anteon Cor- poration, applying the techniques of Quality Function Deployment to corporate and customer projects. He has also applied concept engineering to the problem of large-scale information and control- systems requirements definition. He holds memberships in the Insti- tute of Electrical and Electronic Engineers and International Society of Technology in Education. He is an adjunct professor at Lesley College and Bristol Community College. xix ABOUT THE AUTHORS Jenny Darroch Department of Marketing, University of Otago, Dunedin, New Zealand [email protected] Jenny Darroch is currently completing her doctorate in the area of knowledge management and innovation. Her interest in these areas stems from earlier work she did as an economist on national innova- tion systems that resulted in much public debate on what can be done to enhance the international competitiveness of New Zealand firms. Prior to joining the academic world, Jenny gained extensive experience in marketing research and marketing management. C. Anne Davies School of Management and Economics, Queen’s University, Belfast, Northern Ireland [email protected] Anne Davies currently holds the position of Head of the School of Management and Economics at Queen’s University of Belfast. Her research interests are in the contribution of information systems (in the widest sense) to organizations; examining the links between information systems, knowledge management, and the learning organization, and developing an organizational information strategy. Previous publications have been in the area of information systems failure, especially in the public sector. Bryan Davis The Kaieteur Institute for Knowledge Management, Toronto, Canada [email protected] Bryan is an independent researcher, educator, consultant, and ana- lyst. He is currently engaged in advanced research into e-knowledge markets, knowledge-enabling software, knowledge business models, and knowledge pattern recognition. He has been transforming infor- mation, document, and knowledge management theory into practice for over twenty years. He is a philosophy graduate from York Univer- sity and is currently on the Advisory Board of Knexa.com Enterprises. He has served as vice president of KM Strategies and Research with the Delphi Group Canada. He has previously been an IT consultant with the Municipality of Metropolitan Toronto, Manager of the Cor- porate Records Centre for Metro Toronto, Regional Superintendent of Records, Management Transport Canada, and Assistant Chief of the Toronto Federal Records Centre, National Archives Canada. He currently teaches a new seminar on e-knowledge–based innovation xx WORLD CONGRESS ON INTELLECTUAL CAPITAL READINGS and is also an instructor in the University of Toronto School of Con- tinuing Studies. G. Scott Erickson Division of Economics and Business, SUNY College at Oneonta, New York, U.S.A. [email protected] Scott Erickson is assistant professor of marketing in the Division of Economics and Business at SUNY College at Oneonta, Oneonta, New York, U.S.A. He consults in areas such as entrepreneurial high tech- nology and marketing strategy. He holds a Ph.D. from Lehigh Univer- sity, an M.I.M. from AGSIM (Thunderbird) and an M.B.A. from Southern Methodist University. Research interests include intellectual property and intellectual capital protection. Deborah Hurst Centre for Innovative Management, Athabasca University, Alberta, Canada [email protected] Dr. Deborah Hurst is an associate professor with the Centre for Innovative Management, Athabasca University in Alberta, Canada. Her area of specialization is located within the study of cultural orga- nization change with an interest in knowledge work and development of intellectual capital through ongoing competency development and virtual learning. Her work is a balance of applied and academic research that draws from a diverse background in her pursuit of this specialization. Her current research program is concerned with the experiences of contingent knowledge workers, the development, retention and valuation of intellectual capital, the use of virtual learn- ing environments to enhance intellectual capital, transmission and alignment of cultural values, and the de-institutionalization of the psychological employment contract. For more information regarding Deborah’s work or background, check the Athabasca University, Centre for Innovative Management Website. Eila Järvenpää Department of Industrial Engineering and Management, Helsinki University of Technology, Finland [email protected] Dr. Eila Järvenpää is professor in organizational behavior and knowledge management at the Department of Industrial Engineering and Management, Helsinki University of Technology (HUT). Her xxi ABOUT THE AUTHORS research interests include knowledge management, communication in organizations, cross-cultural management, competence develop- ment and media industry, and ICT and quality of working life. She is a research director at the TAI Research Centre in HUT, responsible for the research area Organizational Development. She is responsi- ble for the InPhD program, a doctoral program for experts and man- agers in industry. Joseph J. Kranz Requirements Engineering, KM and IC, Anteon Corporation, Rhode Island, U.S.A. [email protected] Joseph Kranz provides decision-making, knowledge management, intellectual capital, and requirements engineering consulting to gov- ernment and industry and is a corporate program manager at Anteon Corporation. In addition to collaborative and team process develop- ments, and knowledge management organizational implementations, he participates in the application of genetic algorithms to science and technology investment decision-making. He has also directed major U.S. Navy command and control information system programs and received the Superior Civilian Service Award from the Secretary of the Navy. He received his B.S. in Mathematics at Loyola University in 1966 and expects to receive his Ph.D. in Business, Technology Pol- icy, and Management in 2002 from Berne University International Graduate School. He is a member of the Society for Judgement and Decision-Making. Laurent M. Lapierre Human Resource Systems Group Ltd., Ottawa, Canada [email protected] Dr. Lapierre is currently a consultant with Human Resource Sys- tems Group Ltd., a management consulting firm specializing in the development of competency-based human resource management systems. He currently assists government and high technology orga- nizations in developing customized competency profiles for their employee groups. He also provides guidance in the development of competency-based human resource management processes for employee selection, performance management, and learning and development. Dr. Lapierre received his Ph.D. in human resources and management from McMaster University and his M.A.Sc. in industrial/organizational psychology from the University of Water- loo. His doctoral dissertation, entitled “Understanding the links xxii WORLD CONGRESS ON INTELLECTUAL CAPITAL READINGS between work commitment constructs,” explored how employee work commitment affects employees’ intentions to quit both their organization and their occupation. His research is currently in press in the Journal of Vocational Behavior. Heine Thorsgaard Larsen Copenhagen Business School, Denmark [email protected] Heine Thorsgaard Larsen is assistant professor of Intellectual Capi- tal Management at Copenhagen Business School, Copenhagen, Den- mark, researching mainly in the areas of strategic management, intellectual capital, knowledge management, management of intangi- bles, management control, and performance management. Heine Thorsgaard Larsen has been researcher on the Danish Ministry of Industry project on intellectual capital. He holds an M.Sc. in Manage- ment Accounting and Organization from Copenhagen Business School, and an M.Sc. in International Development Studies and Business Stud- ies from Roskilde University and completed his doctoral education at Copenhagen Business School in August 2001. Heine Thorsgaard Larsen has co-authored several articles and a book on intellectual capi- tal. Heine Thorsgaard Larsen also acts as a consultant for industry. Karl-Heinz Leitner Department for Technology Policy, Austrian Research Centers, Seibersdorf, Austria [email protected] Since graduating from the University of Vienna in the field of business administration and computer science, Karl-Heinz Leitner has been a sci- entist in the Department for Technology Policy at Austrian Research Centers, Seibersdorf. His research examines the innovative behaviors of organizations, the role of information technology in organizational change, and strategic management. Mr. Leitner also researches the micro- and macro-level perspectives of the innovation process. He has carried out theoretical and empirical studies on Austrian firms and con- ducted consulting projects for both public agencies and private firms. Shelley MacDougall Manning School of Business Administration, Acadia University, Nova Scotia, Canada [email protected] Dr. Shelley MacDougall is assistant professor of Finance at Acadia University, Wolfville, Nova Scotia, Canada. Her area of specialization xxiii ABOUT THE AUTHORS is capital budgeting, with particular emphasis on strategic investments in new technology. Her research principally involves the identification and valuation of the intangible benefits and costs of information tech- nology, intellectual capital, and advanced manufacturing technology. Her other research deals with the capital budgeting implications of implementing complex investments. Dr. MacDougall is also co-owner of Engineered and Environmental Products, Inc. (EEP). Further infor- mation on her work history and research can be viewed at http:// ace.acadiau.ca/fps/business/smacdoug/Shelley.htm. Joseph Magowan School of Management and Economics, Queen’s University, Belfast, Northern Ireland [email protected] Joseph Magowan graduated in English and Modern History and went on to a successful career in financial services. He has had exten- sive experience in a number of European banks. He is currently com- pleting a Masters of Business Administration from Queen’s University of Belfast. Eerikki Mäki Department of Industrial Engineering and Management, Helsinki University of Technology, Finland [email protected] Eerikki Mäki is a postgraduate student at the Department of Industrial Engineering and Management, Helsinki University of Technology (HUT). His research interests include knowledge man- agement, interpersonal trust in knowledge intensive work, and orga- nizational communication. He teaches knowledge management to undergraduate students. Karen McGraw Cognitive Technologies, Marietta, Georgia, U.S.A. [email protected] Dr. Karen McGraw is the Director of Learning and Performance Management for Cognitive Technologies and a research fellow at the Accenture Institute for Strategic Change. Dr. McGraw provides con- sultation and guidance to clients to help them gain maximum value from their human capital assets through the use of learning and per- formance technologies. Previously, Dr. McGraw was the director of Strategic Services for Saba, guiding clients as they implemented e- learning, learning management, and competency management. Prior