Abstract
This study investigated how Intellectual Capital in the public sector contributes to value creation during customer problem-solving. Intellectual Capital refers to the knowledge-related assets that are embedded in the staff, work routines, and network of relationships associated with an organisation, both within and outside of the organisation. In this study, Intellectual Capital is identified as comprising Human, Relational, and Structural Capital. Value creation is measured based on the extent to which customer problems are solved.
Two countries are examined as part of the research: Sri Lanka and New Zealand. These countries were deliberately chosen for their differing states of economic development because part of the research aim was to compare the mobilisation of Intellectual Capital in a developing country and a developed country. The research goal was to identify the similarities and differences that may exist in Intellectual Capital mobilisation in these two settings. It is important to note that both countries recently underwent an e-government transformation in their public sectors, thereby providing settings well-suited for the research. Sri Lanka is in the early stages of implementation, while New Zealand is in the latter stages.
This study employed multiple embedded case studies of the Inland Revenue departments of Sri Lanka and New Zealand. A case constitutes an instance of customer problem-solving involving process innovation. Data were collected using semi-structured interviews with the staff directly involved in problem-solving, as well as laddering interviews with customers. The interviews were based on an interview guide developed from the underlying theory used in the study. Interview participants were selected based on their knowledge of the specific problem-solving that characterised each case. Accordingly, purposive sampling was used. Data were triangulated using other sources, such as news reports, performance reports from the Inland Revenue, and publications from the finance ministry.
Since Intellectual Capital is an intangible asset that is embedded in activities such as problem-solving, and is not visible within the organisation, the research developed narratives from the data for each of the ten embedded cases. These narratives followed the stages of translation in Actor-Network Theory and identified innovative problem-solving as a development within an actor-network. Based on these narratives, the research identified the attributes of the actors involved in problem-solving, which were considered Intellectual Capital in addressing the research questions.
Cases from both countries aligned with the stages of Actor-network Translation. The findings from the Sri Lankan case studies revealed that Human Capital is the prominent Intellectual Capital component in problem-solving. Specifically, the Sri Lankan cases provided evidence that personal motivation drives teamwork, which helped mobilise Relational and Structural Capital. In contrast, the findings from the New Zealand cases showed that Structural Capital is the prominent Intellectual Capital in innovative problem-solving. The SL findings are consistent with the literature’s long-standing findings that associate innovation with Human Capital. The literature does, however, offer some support for the association between innovation and Structural Capital, thus supporting the NZ results.
The present study makes three contributions to the literature. First, through its use of a two-country setting, the research introduces a contextual variable (i.e., the level of technical, e-government development) as part of the process of IC mobilisation. Second, the research extends the Collective Intelligence Framework. Third, it contributes to Actor-network Theory by introducing two new concepts: structural hole and problematisation approaches.
The study contains important implications for practicing manager. The implications relate to the use of customer problem solving in an IC ecosystem to promote the effective implementation of e-government, promoting teamwork, and innovation. These findings are especially relevant for managers working in the Sri Lankan public sector.
Suggestions for future research include going beyond this study’s recognition of the role a country’s state of economic development exerts on the link between IC and value creation by incorporating explicit measures of national culture. For example, Hofstede’s six dimensions of national culture could be included.