Crazy Systems Resilience: a Minimum-Deficit Model of Intellectual Capital

Purpose Resilience is typically theorized as an organizational virtue. Yet organizations may remain resilient while normalizing dysfunctional routines. This paper examines how configurations of Intellectual Capital (IC) can interrupt or stabilize feedback loops sustaining crazy systems (CS). Design/methodology/approach We develop the IC Minimum-Deficit Craziness (IC-MDC) model. It treats six IC typologies as complementary filters that mediate whether latent anomalies are detected, interpreted, and converted into corrective action or self-reinforcing dysfunctional loops. This logic is formalized through Capital Adequacy Ratios (CAR), a slack-sensitive multiplier (ICMraw), an adequacy-capped multiplier (ICMcapped), a Craziness Index. Findings Resilience emerges as an ambivalent governance property: it depends not on the average abundance of IC, but on threshold-adequate complementarity of IC dimensions. One under-adequate capital can become a binding constraint that masks vulnerability and amplifies pathological loop pressure. Originality/value Addressing a gap at the intersection of IC and resilience research, the paper advances IC scholarship by shifting from additive to minimum-deficit complementarity, introducing a binding-constraint heuristic for IC governance, and offering a formal diagnostic grammar explaining when IC portfolios sustain resilient functioning and when they normalize dysfunction. Research limitations/implications The contribution remains theoretical: future research can operationalize IC stocks through survey-based and archival proxies, calibrate thresholds and sector-specific weights, and test longitudinally whether changes in the binding constraint precede escalation of dysfunctional loops. Practical implications The model provides an early-warning governance tool that directs managerial attention to the least adequate IC dimension rather than aggregate IC abundance. Social implications The framework helps reveal dysfunctions socially normalized as routine, thereby supporting earlier diagnosis and more accountable organizational correction.