1. © José M. Viedma Marti, 2002. i C The 5th World Congress on Intellectual Capital Josep M. Viedma Professor of Business Administration at the Polytechnic University of Catalonia and President of Intellectual Capital Management Systems SCBS Social Capital Benchmarking System Profiting from Social Capital when building network organisations

2. © José M. Viedma Marti, 2002. i CIntroductionSCBS 2Present models of IC focused on the value chain internal IC. 2They do not take into account Social Capital (SC) when building and managing networked organisations that intend to achieve sustainable competitive advantages. 2This paper is trying to fill up this gap by developing SCBS. 2SCBS is a new management method and tool that identifies, audits and benchmarks the SC existing in alternative cluster locations, that is necessary in order to develop the specific network organisation that each particular business model requires. IC= Intellectual Capital SC= Social Capital

3. © José M. Viedma Marti, 2002. i C Industrial Complex at Castrette (Benetton)

4. © José M. Viedma Marti, 2002. i C Benetton’s Store

5. © José M. Viedma Marti, 2002. i C Benetton BENETTON “Outsourcing” Backward 350 External Contractors Manufacturing 6.000 stores worldwide Outlets 70 Agents Distribution Forward

6. © José M. Viedma Marti, 2002. i C Firm resources and capabilities Sustainable Competitive advantage Strategy Best in class “competitors” core competencies Core competencies = core capabilities = intellectual capital Resources Intangible OrganizationalHumanRelationships - Technology- Knowledge- Customer - Knowledge- Skills- Suppliers - Reputation- Motivation- Stakeholders - Culture- Communication - Competitors abilities- Other partners Tangible - Financial - Physical

7. © José M. Viedma Marti, 2002. i C Endowments -Installed base of customers -Brand &image -Network of suppliers -Network of talent -Ownership of standards Skills & Tacit Knowledge -Know-how -Talent -Competencies Collective Values & Norms -e.g. Client focus, Reliability, Quality Technology & Explicit Knowledge -Patents -Manuals -Procedures Processes -Leadership & Control -Communication -Management Information Unique bundle of intangible assets (=core competence) A core competence as a unique bundle of intangible assets (Andriessen, 2001)

8. © José M. Viedma Marti, 2002. i C TangibleIntangible Organizational Human Intelligent Enterprise Strategy Core competencies Resources Other companies organizations and institutions Suppliers 1 … n Organizations 1 … n Institutions 1 … n Core capabilities Core capabilities Core capabilities Resources Relationships Intelligent Enterprise network

9. © José M. Viedma Marti, 2002. i C TangibleIntangible Organizational Human Intelligent Enterprise Strategy Core competencies Resources Other companies organizations and institutions Suppliers q … z Organizations q … z Institutions q … z Core capabilities Core capabilities Core capabilities Resources Relationships Suppliers 1 … q Organizations 1 … q Institutions 1 … q Core capabilities Core capabilities Core capabilities Resources Inside the cluster Outside the cluster Network structure. Inside and outside the cluster.

10. © José M. Viedma Marti, 2002. i C TANGIBLE RESOURCES Process A Company Value Creation Tree Process C Product A Service B Service C COMPETENCIES KNOWLEDGE HUMAN CAPITAL INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL INTELLECTUAL CAPITAL PRESENT (Value Extraction) Process A Service A’ Product A” Process B Product B’ Process C Product C’ Service C” CAPABILITIES KNOWLEDGE Process B i C © Intellectual Capital Management Systems

11. © José M. Viedma Marti, 2002. i C Company Value Creation Tree TANGIBLE RESOURCES Process A Process B Process C Service A Service B Service C COMPETENCIES CAPABILITIES KNOWLEDGE HUMAN CAPITAL INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL INTELLECTUAL CAPITAL PRESENT (Value Extraction) Process A Service A’ Service A” Proce ss B Service B’ Service B” Process C Service C’ Service C” FUTURE (Innovation) NEW COMPETENCIES NEW CAPABILITIES KNOWLEDGENEW KNOWLEDGE NEW KNOWLEDGE NEW KNOWLEDGE HUMAN CAPITAL NEW INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL NEW INTELLECTUAL CAPITAL New Process New Product M New Process New Product M’ New Product M” TANGIBLE RESOURCES i C © Intellectual Capital Management Systems

12. © José M. Viedma Marti, 2002. i C Mataro Marruecos Venecia Turquía Optional locations knitwear industry segment

13. © José M. Viedma Marti, 2002. i C NEW COMPETENCIES NEW CAPABILITIES KNOWLEDGENEW KNOWLEDGE NEW KNOWLEDGE NEW KNOWLEDGE HUMAN CAPITAL NEW INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL NEW INTELLECTUAL CAPITAL New Process New Product M New Process New Product M’ New Product M” TANGIBLE RESOURCES NEW COMPETENCIES NEW CAPABILITIES KNOWLEDGENEW KNOWLEDGE NEW KNOWLEDGE NEW KNOWLEDGE HUMAN CAPITAL NEW INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL NEW INTELLECTUAL CAPITAL New Process New Product M New Process New Product M’ New Product M” TANGIBLE RESOURCES ICBS Intellectual Capital Benchmarking System ICBS Innovation Capabilities Benchmarking System SCBS Social Capital Benchmarking System Intellectual Capital Management System Metodologies

14. © José M. Viedma Marti, 2002. i C Intelligent Enterprise Strategy Core competencies Industry segment Network Cluster ACluster BCluster CCluster … n based on Profiting from existing social capital when building network organisations: the need to benchmark.

15. © José M. Viedma Marti, 2002. i C COMPANY A Industry Segment Posible Network location alternatives Cluster ACluster B a) Resources and capabilities b) Demand c) Suppliers and other related industries d) Firms strategy, culture and structure e) Competitors f)Goverment a) Resources and capabilities (h) b) Demand (h) c) Suppliers and other related industries (h) d) Firms strategy, culture and structure (h) e) Competitors (h) f)Goverment (h) Benchmarking Gap Benchmarking Gap Benchmarking Gap Benchmarking Gap Benchmarking Gap Benchmarking Gap Benchmarking Gap Where Company A is located or is trying to locate Where the best competitor in the industry segment is located h=homologous Building the SCBS general framework

16. © José M. Viedma Marti, 2002. i C A) Resources and capabilities B)Demand C) Suppliers and other related industries D) Firms strategy culture and structure E) Competitors F) Government Building the SCBS general framework

17. © José M. Viedma Marti, 2002. i C 1 SCBS framework 2 3 4 5 6 FactorsCriteriaQuestionnaires Criterion 1 Criterion 2 Criterion 3.......... Questionnaire 1 Questionnaire 2 Questionnaire 3.......... From the general to the specific SCBS framework.

18. © José M. Viedma Marti, 2002. i C From the general framework to specific framework. General Context Specific Context General framework 6 factors xx Criteria xxx Questionnaires The 6 Factors Framework Clusters Benchmarking Best Competitors cluster Our company Cluster Specific framework 6 factors a, b,... Criteria m,n, p... Questionnaires Specific cluster competitiveness factors and criteria which are relevant in a given industry segment. Social Capital Benchmarking Our company Cluster Best competitor cluster Social Capital Key competitiveness drivers

19. © José M. Viedma Marti, 2002. i C The SCBS balance sheets.

20. © José M. Viedma Marti, 2002. i C The SCBS balance sheets.

21. © José M. Viedma Marti, 2002. i C 4Identifying the world best cluster locations, where the intelligent enterprise is able to establish the necessary relationships, that each specific business model requires in order to build its network organisation. 4Identifying the specific external social capital factors and criteria which are relevant in a given business model or industry segment. 4Trough the SCBS factors framework enabling the identification, audit and benchmark of the social capital alternative cluster locations that are the source of sustainable relational competitive advantages. 4When using SCBS in an orderly, systematic and repetitive way, we obtain social capital balance sheets that are future-oriented and complement and perfect finance and intellectual capital balance sheets, leading companies to leveraging social capital. Benefits from using SCBS - I

22. © José M. Viedma Marti, 2002. i C 4Selecting in a systematic and organised way the necessary information for evaluating relevant social capital factors and criteria. 4Identifying the key areas in which in-depth benchmarking can be carried out in the future. 4Promoting organisational learning through benchmarking teams, assessment teams, project teams and strategic teams. 4Introducing a common language for company managers when dealing with social capital or external resources and capabilities. 4Measuring the reliability concerning the relevant information and the progress of acquiring this information. Benefits from using SCBS - II

23. © José M. Viedma Marti, 2002. i C 4Facilitating the work of the benchmarking and competitive intelligence teams. 4Facilitating the work of the knowledge and intellectual capital managers. 4Giving SME’s managers access to social capital management in a systematic and organised way. Benefits from using SCBS - III Thanks for listening