The subjective side of ic reporting: Actors “on” and “behind the scene”

The aim of this study is to investigate the subjective-side of Intellectual Capital (IC), i.e. who measures and manages IC. More in depth, we examine how the “actors on the scene”, such as the “project sponsor” and the “project leader”, behave with reference to an IC measurement project. We will also examine the role played by another actor so far remained “behind the scene”: the external partner (e.g. consultants, university researchers, etc.). In order to achieve this aim the results of an exploratory field study (Lillis and Mundy, 2005, p. 131; Roslender and Hart, 2003, p. 262) referred to Italian companies that adopted an IC report will be presented, The main findings are the following. First, it emerges that the project sponsor is the main actor that determines the success or the failure of the project. Second, the project leader is the one that shapes and “operationalizes” the theoretical concept of IC adopted by the project sponsor in order to make it applicable. Third, the sensemaking processes related to IC tends to be limited to the sponsor and the leader. This implies that IC tends to remain a “private business”, something reserved to an élite that tend to disappear when the elite quits or changes. Forth, when the CFO/controller adopts a traditional accounting approach (i.e. “bean counter”) rather than a business analyst approach, the IC project tends to fail and to be considered only as an “accounting matter” and not as a managerial matter. Fifth, the role of the consultant seems to determinant in the sensemaking, legitimization and implementation processes of the IC project. Our study adds to IC literature by showing, from a practice-based perspective, the roles played by the project sponsors and of the project leaders in different organizations and how external partners are, in several cases, the “deus ex machina” of the projects, i.e. they are determinant in the decision to undertake these projects, in their accomplishment, prosecution and abandonment. In particular, it emerges that external partners have a key role in the IC sensegiving and sensemaking processes: their specialization influence the way IC is perceived within the company and the fate of the IC report, i.e. in determining the success or the failure of the IC projects.