Network management as a way to manage intellectual capital

Abstract

In order to meet the information and knowledge demands of today's society, there is a need for the development of intellectual capital and most especially social capital. Intellectual assets are knowledge, information, intellectual property and experience, while social capital is embedded in social structures and can be accessed as well as mobilized in purposive actions. Social capital is based on shared norms, values and trust which provokes transparency and improves the flow of information whiles reducing transaction costs. Social capital eventually leads to rationalization; hence, it increases flexibility as well as performance and innovation. As a result, there are formal and informal social networks within firms which serve as leverage for sharing information and knowledge. Factors of influence beside norms and values are the social skills of employees or network members, which is called social maturity in holistic management. Social networks are a source of intellectual and social capital, therefore, there is a need for the development, fostering and controlling of the networks within firms to achieve optimum results without losing control of roles that are played by employees in the network. The aim of the study is to propose a network management model which can be used for managing social networks within a firm with small additional expenses in order to achieve optimum effects from intellectual capital. In this study, the author combines models of network management from literature review and results of an exploratory survey of nine Austrian experts in the fields consulting, politics and management. This approach was aimed at designing a suitable model for the management of both formal and informal networks within a company. A suitable network model is that which fulfils the criteria of practicality in the development and fostering of intellectual capital within a firm. This paper introduces intellectual capital, social capital and further discusses the principles for working with and within social networks. The paper proceeds further by presenting common network management and network governance models, after which the results of the expert survey are explained. The paper concludes by presenting a practical model based on theoretical and empirical analysis. This is followed by a proposal on how the model can be adapted in firms.