CRITICAL ANALYSIS OF BURR AND GIRARDI’S INTELLECTUAL CAPITAL MODEL
Introduction
There are many valuable assets for any organisation including visible and invisible. The focus of contemporary organisations are on knowledge creation capacity that that strengthens the ability of such organisations to realise opportunities in every point of leveraging. Realistically, organisations draw insights from theories to analyse and evaluate the performance from both individual and organisational frameworks. Internal assets including intellectual capacity is deemed to be the most important. The paper focuses on the critical analysis of the intellectual capital model expounded by Burr and Girardi. Comparison with Williams’ theory of behavior as determinant of performance is addressed as well as with Higgins’ and Bandura’s theories.
Burr and Girardi (2002) further developed Ulrich’s conception of intellectual capital demonstrated by the formula: intellectual capital = competence x commitment which takes into considerations a third integral element that is control, and provide an empirical causality between the variables which Ulrich fell short of doing. The authors contend that the settlement of the link between HR practices entrenched in organisational behaviours and the value of organisational intellectual capital must be a necessity. Intellectual capital is evident within two broad levels: individual and organisational. The interplay between ability, behaviour, effort and time to which the employees have the sole autonomy is said to be an important contributing factor for organisations. Deemed as ‘the backbone of the organisations’, structural capital, which is founded on intellectual capital, takes into account organisational ethos explicitly outlined in strategies, processes and policies.
Burr and Girardi concluded that intellectual capital has three core ideas integrated into it: capacity, willingness and opportunity. In lieu with Ulrich’s theory, the first and second ideas are clear manifestations of competence and commitment elements and that opportunity is the loophole of such model. There are four basic propositions that the authors presented. According to them, the measure of intellectual capital is regarded as the measure of capacity, skills utlisation and efficacy when it comes to competence requirements as well as commitment, either affective, continuance or normative. Combined, the impact of this will be moderated by the third element that is job control or work autonomy. Within the frameworks of job designs, theorists suggest that the power over respective jobs and hence performance encompasses influences on the ability to utilise skills, to conform to efficacy beliefs and job crafting with the ideology of worker empowerment at the center.
As such, what the authors is trying to prove is that aside from individual competence and commitment there is a pluralistic yet highly-individualistic factor whereby it will determine the extent by which individual organisational members will contribute to the organisation’s being and future. Unreservedly, the dynamics of job control is central on the motivation of the people that allows them to act on their own prerogative (Matthews, 1999; Millward). Burr and Girardi divide job control into behavioural and cognitive whereby the former is identified to be the ‘acceptable’ actions and the latter as the informed choice. Nonetheless, both distinguished how individuals perform within an organisation that requires competence, expertise and skills; embeds on various intrinsic and extrinsic factors and delivers individual decision-making regarding performing tasks and duties.
Knowledge and information are increasingly becoming the ‘life’ of every organisation and as unique source of competitive advantage (Jackson and Schuler, 2002). Likewise, Burr and Girardi failed to clearly connect commitment, competence and control perhaps because of the inherent parasitical element of the model. Intellectual capital cannot be unilaterally applied in efforts to explain performance and performance management. For once, human capital and structural capital are central on culture and customer knowledge so there must be the holistic movement of intellectual capital if it is to affect the organisational productivity and performance in the long run. Second is the motivation of the people and how it relates with ability. Burr and Girardi could have integrated the receptiveness to learning or the degree of how quickly a person acquires new knowledge significantly that people have differing levels of knowledge and capacity. Third is focused on accurate role perceptions or how well individuals understand the behaviours they are expected to perform as well as their desire to fulfill unmet needs and to resolve cognitive dissonance. Fourth is realized on the fact that there are factors that impact employees’ performance but are beyond their control. The authors could also relate the performance delivered by intellectual capital based on direction and intensity either on individual or organisational level.
Plausibly though, the model builds on intellectual capital as one of the important factors that identifies with the performance of the people and the performance of the organisation collectively. As the sum of human and structural capitals, intellectual capital is demonstrated as processual and that energies must continuous and must come from both directions top-down and bottom-up. Scrutinizing the assumptions of the model, we can deduce that intellectual capital is both ascertainable and transferable and so as performance that travels from individual to organisational frameworks. Though the term capital is vague and problematic, intellectual capital takes into consideration intangible assets that are not intellectual. As such, performance is said to be equally diffused in organisations.
Williams, on the other hand, maintains that the individual performance determines outputs and results founded on behavior and competencies. He also made mentioned that behaviours are critical determinants of performance and that job context is a one-dimensional determinant of performance. Individual behaviours are then vital for organisational effectiveness albeit the fact that these individuals are well aware that there are many external forces that might deliver favorable or adverse consequences for the ultimate success and survival of the firm especially that these forces are beyond the control of the individuals. Notable is that behaviours are critical means for energizing and directing employees.
Therefore, the existence of performance management systems is a necessity for the purpose of communicating expectations of how people should behave, shaping their aspirations and facilitating the achievement of those aspirations. The premise is that performance is the function of operating contingencies and the context of reinforcement. Job context is simply the why, the how and the who of the work. In essence, creating context is instrumental towards giving the workforce a new perspective on how their works fits into the company in order to eliminate incompetence that directly correlates with professional value and with company’s growth. For Williams, there are two basic performance schemas: excellence and quality which are the resultants of performance (2002).
To critique, it is a common knowledge that intellectual capital represents the most important asset of every organisation. Aside from human capital and structural capital, relational capital is another component that shall add in creating value within an organisation. For once, the two models have very different assumptions where the former is on the degree of competence and commitment and also control whereas the latter is on behaviours that generally determine the performance and the levels by which this could be managed (Bonfour, 2003). Though both are tended on outcomes and results, the two differ in the perceptions of job designs whereby for Burr and Girardi job control is the element that distinguishes behaviours and for Williams job context is the instrument that largely determines the degree of performance management.
Further, there are two other cognition theories that could be compared to that of Burr and Girardi’s which are Higgins’ Theory and Social Cognitive Theory. The former was developed in 1987 which states that each person has multiple mental representations of the self. Higgins also noted that the discrepancy between any pair of the representations has corresponding emotional consequences. The theory claims that there are three broad categories of self: actual – who one really is, ideal – who one would like to be and ought – who one feels it is one’s duty to be (Musil et al, 1999; Segal et al, 1995).
To compare, the three perspectives on self are largely to determine the levels of performance any individual may wish to contribute to the organization and these are manifested in their behaviours toward work and their immediate surrounding (Eraut, 1999). Though this maybe comparable with that of intellectual capital model’s core assumption, only that Higgins has more concrete explanations of what drives the behaviours of individuals in organisational context. For example, the concept of three selves would likely to determine self-discrepancies associated with individual differences in the way they are going to behave and hence perform (Baumeister, 1999; Cartin, 1999).
Albert Bandura developed the Social Cognitive Theory in 1962 to explain the individual and group behaviors. The core assumptions of theory point on identification and self-efficacy whereby individual’s knowledge acquisition is said to be founded on direct observation of others through social interactions and social experiences. Bandura also advocated the concept of self-efficacy that functions as important determinants of cognition, motivation and affection (Bandura, 1985; 1988; 1989).
In comparison with Burr and Girardi’s model, Bandura’s theory is more systematic because of the precision between learning and self-efficacy that determines the performance of individuals. Though the theory is tended on the cognitive aspect instead of arriving at a balance with the social aspect, what makes the theory comparable to intellectual capital model is the recognition that external forces play a major role in performance (Eysenck, 2004).
Conclusion
From a personal standpoint, Williams’ theory is better than that of Burr and Girardi though he failed to connect the behaviors with performance and/or job context. The effectiveness of William’s theory is on contemplating that needs for a performance management measure and addressing the hows and the whys of people’s performance within an organisational setting. Needs in individual, collegial and organisational levels must be integrated within the two models so that the models could determine the fundamentals that energized people and causing them to act and perform. As such, Burr and Girardi’s theory lacks a lot of elements and compared to Williams’, the latter is more acceptable. Such theory is also compared with two other theories that determine the levels of performance in organisation as Higgins’ Theory and Social Cognitive Theory.
References
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