Accounting for a system of corporate knowledge

Abstract

Many corporate managers and researchers now frequently rank intellectual assets ahead of physical assets in developing a competitive edge, primarily due to such factors as shorter life cycles, frequent changes, adoption of advanced technologies and increasing global competition. Given the accounting literature’s inadequate attention to these important resources, this paper develops a systemic view called a “system of corporate knowledge”. This system includes the components, environment and structure of intellectual assets. Components include critical thinking, creative thinking and innovation. The environment includes organization climate and organization learning into which the system’s components operate and culminate through the integration of all applied thinking types. The system’s structure is shown mathematically by a dynamic equation. The mathematical model is a form of reductionism necessary to bring such a complex system of corporate knowledge to a manageable level. Controllers and managers can then use the system to explain the mechanism of the knowledge development or lack thereof. Since the system operates dynamically, spiral functions are applied to help controllers and managers graphically present the trends in the system.

Citation

Bayou, M.E. and Reinstein, A. (2001), "Accounting for a system of corporate knowledge", Managerial Auditing Journal, Vol. 16 No. 6, pp. 331-338. https://doi.org/10.1108/02686900110395479