Intellectual Capital Development by Means of Knowledge Conversions

Based on a new conception of knowledge and knowledge dynamics, an approach for intellectual capital development in an organisation is given, which raises the notion of knowledge conversions to the level of intellectual capital domains. Intellectual capital development can be modeled with this approach by means of general transformations between domains and between appropriate parts of these domains, which themselves are refined and modeled with general knowledge conversions. To attain this approach, a new conception of knowledge and knowledge dynamics is introduced. The knowledge conception is represented by a knowledge cube, a three-dimensional model of knowledge with types, kinds and qualities. The type dimension addresses the internal-external aspect of knowledge, seen from the perspective of the human being. The kind dimension distinguishes various knowledge kinds like propositional or procedural knowledge. Finally, in the quality dimension, several quality measures of knowledge are given. Built on this conception, knowledge dynamics is modeled with the help of general knowledge conversions between knowledge assets. A set of basic knowledge conversions is given in a way, such that more complex general conversions may be easily gained by building on this set. Through this conception we gain a sound basis for knowledge management and development in an enterprise. Raising this knowledge development approach to the more strategic and resource-oriented intellectual capital level in an organisation, general transformations between the three main intellectual capital domains (individual competence, internal and external structure) and between parts of them can be described. With their help a model for intellectual capital development is gained: In a top-down approach, general transformations of intellectual capital are broken down to the notion of general knowledge conversions. This leads to development of the intellectual capital, i.e. to value creation in a company. To indicate the applicability of our approach, an example for the development of customer relations capital is given.