Managing sustainability through the IC practice lens

Purpose: The value creation is not done by or within the organization alone. It is influenced by external factors, e.g. the economic conditions and societal issues, which are representing risks and opportunities in the external environment. Furthermore relationships to employees, partners, networks, suppliers and customers have an impact on the organization’s value creation process. According to the framework of International Integrated Reporting Council (IIRC), an integrated report should display an organization’s stewardship not only for financial capital, but also for other “capitals” (e.g. manufactured, human, intellectual, natural and social) and their interdependences. In this light, the goal of this paper is to establish relationships between indicators of business performance and indicators associated with Intellectual Capital (IC) and Sustainability. In particular, the study concerns a company operating in the field of Electronics and Defense, which has developed and applied in its reality a model of IC-CSR management and the guiding principles underpin the preparation of an integrated report, based on the interconnected key content elements. Design/methodology/approach: From a methodological point of view, it is believed that these objectives can be successfully achieved by adopting a qualitative research based on “action research”. This method looks at the meaning of the experiences of people; it is a research strategy suitable to situations in which the object of investigation is to be examined in depth. In our research, an interventionist approach (Dumay, 2010) to researching and implementing an IC-Sustainability framework has been followed. In particular we used “Action research” wich attempts to combine the process of research and action based on what Shein (1987) describes as a key assumption – that one can never really understand any human system without trying to change it. Thus, a key aim of action research is to increase both researchers’ and practitioners’ understanding. Originality/value –No papers or researches question how, in practice, it is possible to reporting and to manage in practice sustainability initiative trough the IC perspectives. It is evident that this issue is not covered by the present literature. This paper aims at filling the aforementioned gap by highlighting how an high-tech company has developed a reporting aiming to manage sustainability initiatives by the measurement of related firm specific intangibles functional to the creation of value. This case study puts in evidence that the communications that result from integrated reporting will be of benefit to a range of stakeholders. In this way “researcher” and “practitioner” create a model to evaluate the measurement and management of the company’s intangible assets, which can be integrated into the managerial practices in order to support the firm’s decisions. Practical Implications: The application of this model represents an innovation in support of the organizational management system, and also offers an important tool for the entire reporting on intangible assets in the company, which takes on double meaning: for internal management to support management decision, and for external stakeholders, in addition to the traditional information tools. Thanks to our methodological approach, i.e. “action research”, we were the testimonials of the process which involved the managers of the analysed company in planning CSR activities for 2013 year. Accounting for CSR activities trough the effect of mediating contingent variables, i.e. a firm’s specific intangibles, allow managers to be aware of what drivers of performance can lead to both revenue and cost-related outcomes- researchers and practitioners were successful in designing a tailor-made model to evaluate and manage the CSR activities of the company which can be integrated into managerial practices supporting company decisions