Intellectual Capital in Practice in the Public Sector: Developing a Conceptual Framework for the ‘Third Wave’

Abstract

Throughout the world, public sector organisations are under continuous pressures from various stakeholders for performance improvement. Public sector, just like corporate sector is also utilising intellectual capital (IC) in various ways and it is being argued that IC as a strategic resource can also help in improving the performance of this sector. However, research on intellectual capital in public sector is still very scarce, and especially, in the context of developing countries, almost non-existent. The IC body of knowledge has evolved through various stages and currently it is moving towards the fourth stage. This paper is focussing on the third stage of ‘IC in practice’. The third stage of IC research advocates the complex and idiosyncratic nature of intellectual capital and stresses on researching ‘IC in action’ i.e., IC practices and managerial implications rather than measuring it. This theoretical paper aims to propose a framework to explore IC phenomenon in the knowledge intensive public sector organisations of a developing country (Pakistan). It raises the issues of the role of IC in value creation or destruction in the public sector and practices associated with intellectual capital, in such organisations which do not have explicit IC management strategies however, through their practices these organisations are managing it. It also develops a conceptual framework which proposes to study the IC practices of the public sector organisations through performative IC, social construction, and structuration lenses in order to grasp the complexity of conceptualising the IC, its particular nature, failure of generalisation of the IC grand theories, and development of IC body of knowledge. This framework focuses on understanding the phenomenon and its role in public sector organisations.The framework contributes towards the IC in Practice perspective of IC body of knowledge in the specific context of public sector organisations in a developing country and suggests that by adopting an appropriate methodology, the practices, management, and development of IC can be better comprehended through this framework.