Managing Intellectual Capital-Related Risks: A Relational Approach

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Title: Managing Intellectual Capital-Related Risks: A Relational Approach
Author: Ritvanen, Hannu
Contributor: Hanken School of Economics, Department of Management and Organisation
Belongs to series: Economics and society - 329 - Ekonomi och samhälle - 329
ISSN: 0424-7256 (printed)
2242-699X (PDF)
ISBN: 978-952-232-387-3 (printed)
978-952-232-388-0 (PDF)
Abstract: This thesis has two aims: firstly to discuss and answer what are Intellectual Capital (IC)-related risks, and secondly to develop a framework for decision-makers for managing IC-related risks in an organisational context and practice. The main discipline and contributions of the thesis are in IC theory. Risk theory forms an important element to the contribution. The presumption is that risks occur in relationships, while results are shown in entities or in new tensions in relationships. Knowledge is seen as relational, between subject and object, between knower and known (or not known). The dominant classification, the ‘IC-Triad’ (human, structural and relational capitals), is an artefact from the time when IC was understood from an accounting perspective with financial and intangible assets. In this thesis an alternative is proposed. If classification is understood as a means to make sense of the complex world for managerial purpose, it is better to interpret the managerial task with concepts as close to the managerial reality as possible. I suggest re-conceptualising the original ‘IC-Triad’ to address arguably one of the most difficult, yet most common, managerial tasks: how to manage risk. Practitioners must in temporal flow of events ‘make do, with what is available’; I see them as ‘bricoleurs’. The ultimate aim of this thesis is to give decision-makers, through a practical framework for managing risk, more than they currently have available. Related IC and Intellectual Capital Management (ICM) discourses and the Risk Management (RM) literature have been reviewed. The conclusion from the IC literature review is that the dominant ‘IC-Triad’ needs to be re-conceptualised, including relationships, by developing a full ‘relational approach’ to Intellectual Capital Risk Management. This means that knowledge and knowing are understood as ‘existing’ in relationships between the subject (knower) and object (known). The object of enquiry can be entities or potential relationships between objects. The conclusion from literature review is that the conceptualisations underlying ISO 31000 are appropriate to the purpose of managing risks, risk defined as: the ‘effect of uncertainty on objectives’. The ICRM Framework is the main contribution to the IC, ICM and IC risk literatures by defining IC-related risks, identifying (with an emphasis on finding) IC-related risks in the practical organisational context and bridging the gap between management and operations by identifying the essential uncertainties in the organisational domain operationalised as epistemic holes in three temporal dimensions: ex-ante, present, and ex-post. The key is to avoid the ‘optimistic agenda’ by taking all essential uncertainties into account for decision-making and sharing the objectives of the organisation to all decision-makers. The risk identification process further ensures that the objectives are commonly known and that all events, whether positive or negative at the time of assessment, are also shared.
Date: 2019-08-07
Subject: intellectual capital related risks
knowledge related risks
relational approach
ISO 31000 risk standard
intellectual capital related risk management framework
uncertainty-based risk approach

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