Intellectual capital management in a non-profit organization

IC literature claims that IC is one of the key determinants of business’ performance (Schiuma et al., 2007). This should be even truer for non-profit organizations (NPOs), whose outputs (services) are intangible in nature and whose production processes are based heavily on intangible inputs such as skilled personnel and other intangible factors (Sillanpää et al., 2011). However, the issue of IC is relatively new to NP sector (Kong, 2008): only few empirical studies have been carried out (Fletcher et al., 2003; Kong, 2007; Guthrie et al., 2009; Sillanpää et al., 2011), and the existing research has mostly been rather generic and conceptual (Kong and Prior, 2008). The perspective adopted in the study is a managerial one, because we are not interested in developing a new framework for measuring, managing and reporting IC or in exploring how NPOs disclose IC to their stakeholders, rather we explore how managers use IC information for managerial decision making. Thus, the main research question is “What are the existing practices used by ANPAS Piemonte for measuring, managing and reporting IC?” The research question is addressed by semi-structured interviews to an Italian NPO, namely ANPAS Piemonte using five main themes related to the research question: 1. Why did ANPAS Piemonte start to produce IC reports and why is continuing to do so?2. What are the existing IC reporting practices?3. What are the economic implications; the costs and benefits associated with producing IC reports?4. What are the organizational implications of reporting IC?; 5. How is IC used for managerial decision making?ANPAS Piemonte, which is the only NPO producing IC reports in Italy, has been chosen for its longstanding experience in reporting IC: its first IC report was produced in 2003, and IC reports have reported annually since then up to 2011. Moreover, Italy represents an interesting context on which conduct our research. Italian NP sector has profoundly changed its role in recent years, moving from a marginal one to become a key actor in supplying social services, acting as third element between the public sector and private market (Borzaga and Fazzi, 2011). We intend to conduct interviews with the IC manager of the NPO in the form of semi-structured interviews, which involve prepared questions guided by identified themes in a consistent and systematic manner (Qu and Dumay, 2011). The paper contributes to knowledge to the existing research on measuring, managing and reporting IC in the NP sector by presenting the findings of an exploratory study on IC in an Italian NP organization (NPO).Fletcher, A., Guthrie, J., Steane, P., Roos, G. and Pike, S. (2003), “Mapping stakeholder perceptions for a third sector organization”, Journal of Intellectual Capital, 4 (4): 505-27.Guthrie, J., Steane, P. and Farneti, F. (2009), “IC reporting in the Australian Red Cross blood service”, Journal of Intellectual Capital, 10 (4): 504-19.Kong, E. (2007), “The Strategic Importance of Intellectual Capital in the Nonprofit Sector, Journal of Intellectual Capital, 8 (4): 721-31.Kong, E. (2008), “The development of strategic management in the non-profit context: intellectual capital in social service non-profit organizations”, International Journal of Management Reviews, 10 (3): 281-99.Kong, E. and Prior, D. (2008), “An intellectual capital perspective of competitive advantage in nonprofit organisations”, International Journal of Nonprofit and Voluntary Sector Marketing, 13: 119-28.Qu S. Q. and Dumay J. (2011), “The qualitative research interview”, Qualitative Research in Accounting and Management, 8 (3): 238-264.Schiuma, G., Ordonez de Pablos, P. and Spender, J.C. (2007), “Intellectual capital and companies’ value creation dynamics”, International Journal of Learning and Intellectual Capital, 4 (4): 331-41.Sillanpää, V., Lönnqvist, A., Koskela, N. Koivula, U., Koivuaho, M. and Laihonen, H. (2010), “The role of intellectual capital in non-profit elderly care organizations”, Journal of Intellectual Capital, 11 (2): 107-122.