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A model of Managing IC to Increase Performance: Case Study in Higher Education

Wirawan ED Radianto

Background
• There is increasing evidence that the drivers of value creation in modern competitive environments lie in a firm’s intellectual capital rather than its physical and financial capital (Petty, 2007) • Knowledge intensive firms memiliki tangible asset antara 15%-25% (Ballow, 2004)  university is knowledge intensive organization

Phenomenon
• University is a knowledge based organization • Universities become industry  high competition among universities • Many universities go bankrupt, merger, taken over by other universities (Antara News, 2009; Elizabeth, 2008) • most of the performance of human resources in universities is very low making it difficult to compete nationally even more of the world (Pikiran Rakyat, 2010; Harian global, 2009; Okezone, 2011; Wahyuni, 2011; Kompas, 2010)

• There are 16 from 478 accounting department that already have “Guru Besar”. Sadly, there are 55 accounting department that all the lecturers still have “tenaga pengajar”. There are 72 from 478 accounting departments have PhD degree in acconting and there are 141 from 6.166 accounting faculties who hold PhD degree in accounting. (Radianto, 2011)

Motivation
• There are still inconsistency result of relationship between IC and performance  this study tries to answer why and the reason behind  There are still no research exploring the role of IC on performance based on qualitative method • Most of accounting deparment have less quallity in term of human capital therefore they don’t have competitive advantage  no research regarding the relation between IC and universities’ performance  Research of IC in the university is still demanding

Research aimed
• To investigate which strategy used by university and why it use the strategy • To investigate which performance used by university and why it use the performance • To investigate how management manage IC in order to increase organization performance • To investigate how IC support strategy in order to increase organization performance

Originality
• Qualitative research on IC in Indonesia • IC research in University in Indonesia

Literature Review
• Theory:
– Porter’s generic strategy – Resource Based View theory

Literatur Review cont...
• IC influences positively on company performance (Zang, 2006; Shiu, 2006; Wang, 2006; Tan, 2007; Ulum et al., 2008, Solikhan&Roman, 2010; Clarke et al., 2010; Soewarno, 2011; Pulic, 2004; Kaplan&Norton, 2004) • IC is a source of competitive advantage for organization (Kaplan&Norton, 2004; Bontis, 2000; guthrie, 2003) • Strategy is a key factor to gain competitive advantage and increase performance (Burgerlam et al., 1989; David, 1988)

Research Model

Strategy

Organization performance

Research Model

Strategy

Management of human capital

Organization performance

Research Model

Strategy

Management of human Ic

Organization performance

Human capital

Informational capital

Organizational capital

Methodology
• Qualitative approach with case study strategy  Thomson (2008) find out that each university has different need and it is complex organization • Focus on 3 variables of IC namely human capital, information capital, and organizational capital (Kaplan&Norton, 2004)

• Unit Analysis: Accounting Department
– Porter (1998) Competitive advantage is located on strategic business unit (SBU) – Johnson et al (2008) SBU is part of organization which has different market and product/service compare to other SBU. – In the context of university, SBU is department

• Informant: head of department • Sample: one private university and one public university