Toward a theory of knowledge management at a business school: The generation and deployment of reputational capital

Importance and key contribution: Most universities treat their business schools as strategic assets deployed to enhance their reputation and attract revenue (Pfeffer & Fong, 2002; Starkey & Tempest, 2008). Therefore they... [ view full abstract ]

Importance and key contribution: Most universities treat their business schools as strategic assets deployed to enhance their reputation and attract revenue (Pfeffer & Fong, 2002; Starkey & Tempest, 2008). Therefore they expect strong and visionary leadership from the deans of business schools (Baraket, 2012; Cornuel, 2007). There is a plethora of training programs for deans run by established organizations such as the Association to Advance Collegiate Schools of Business (AACSB), Canadian Federation of Business School Deans (CFBSD) and the European Foundation for Management Development (EFMD) that are very well subscribed. Yet, there is little by way of a conceptual model or a guiding theory that informs what amounts to a multi-million dollar enterprise. This paper addresses the issue of leadership in a business school and offers a theory of knowledge management.
Theoretical Base: Drawing from intellectual and social capital theories (Nahapiet & Ghoshal, 1998) I focus on reputation management in business schools (Rindova et al., 2005) and show how reputation capital can be derived from intellectual and social capital and leveraged toward regional, national and global influence for the institution.
Research Question and Method: The central research question is how can business schools gain influence in a competitive environment? This is further broken down to how business schools can generate intellectual and social capital and convert them into reputation capital. The final question is how the reputation capital can be used to gain competitive advantage in the school’s relevant environment. I use a theory building approach with examples drawn from leadership practice in decanal environments.
Findings: I begin with the idea that Business Schools like universities are reputational organizations dealing in a good that is non-rivalrous and non-excludable: knowledge. The school seeks to influence certain sectors of society through the use of knowledge. This is not easy because knowledge is a public good that does not deplete with use – non-rivalrous. Besides, although the School produces this knowledge, it does not have sole proprietary rights over its use as it is located in the public domain – non excludable. As it is, our core business is the production and dissemination of knowledge and our core competency rests in that process (Siadat et al., 2012). So knowledge management is at the heart of my theory (Serenko & Bontis, 2004). In what follows I will offer a concise theoretical statement and provide more details by fleshing out my theoretical ideas into some propositions toward knowledge management. I will attach a figure in the full paper to provide a visual representation of the model guided by the theory and the accompanying propositions.
A theory of knowledge management: Valuable knowledge production and dissemination enhances the reputation of the knowledge organization. Investment in human and structural capital engenders intellectual capital which provides core value. Investment in social networks embedded within the relevant context generates social capital. Leveraging of the social capital with intellectual capital contributes to the cultivation of political capital and the building of reputation capital. Reputation capital is used to generate financial capital for reinvestment in the core business and to enhance organizational influence. Influence in turn entrenches the core value proposition. Knowledge management ensures effectiveness in intellectual capital formation, efficiency in the various investment processes, the augmentation of reputation at the organizational level, and the strategic deployment of reputation toward continual influence.
Proposition 1: Intellectual capital is a multiplicative function of human capital and structural capital housed within an intellectual unit. Intellectual units can be academic departments, centers, institutes and schools. Intellectual capital refers to all intellectual products generated within the unit by individuals housed within the unit. This production is aided by human capital expressed in the qualification, skills, and training that rests with the individuals within the unit. This production is further facilitated by structural capital manifested by the institutional arrangements such as research groups, labs, centers, and institutes that serve the purpose of intellectual capital production. The leveraging of human capital and structural capital toward the production of intellectual capital is done through knowledge management involving recruitment, resources, recognition, and rewards. The density of competence in the unit contributes to the enhancement of the intellectual capital. Such intellectual capital is owned or co-owned by the agents responsible for its production and is shared with the intellectual unit as long as it houses at least one agent of production.
Proposition 2: Social capital is a synergistic function of relational and cultural capital identified with the intellectual unit. The relational capital is generated through the cultivation of facilitative relationships both inside the intellectual unit and outside with key stakeholders that is synergistic in nature. The synergy accrues when the social capital generation takes place in a manner that is in resonance with the culture of the unit and the larger culture within the unit’s relevant context. The cultural capital accrues as the resonance between the intellectual unit and its cultural context becomes optimal. It is a symbiotic relationship capable of strengthening each other. In order for the cultural capital to be sustained, it has to be sensitive to the cultural currents both within the unit and outside. The leveraging of relational capital in conjunction with cultural capital toward the generation of social capital is done through knowledge management involving resources, recognition, and rewards. Such social capital is general in nature. The density of competence in the unit contributes to the quality of the social capital. This is accomplished by mechanisms that facilitate the nature and frequency of interaction among members of the unit both internally and externally. The social capital is owned or co-owned by the individual or individuals responsible for its cultivation and is shared with the intellectual unit as long as it houses at least one agent of cultivation. The leader of the intellectual/social unit is the principal agent for the generation of the social capital.
Proposition 3: Political capital is a form of social capital and emanates from it. While social capital is broad, political capital is focused and has a narrow but more definite sphere of influence. Political capital is also a function of relational capital and cultural capital and is cultivated both internally and externally among relevant stakeholders. It accrues from social and professional interactions where specific and identifiable expectations in the form of obligations and favors are communicated, mutually understood, honored, and exchanged. The certainty and dependability comes from its quid pro quo nature. This process further reinforces the social capital housed within the intellectual unit which also functions as a social unit in this case. Such political capital is owned or co-owned by the agents responsible for its cultivation and is shared with the intellectual unit as long as it houses at least one agent of cultivation. The leader of the intellectual/social unit is the principal agent for the generation and deployment of political capital for the benefit of the unit.
Proposition 4: Reputational capital is a multiplicative function of intellectual and social capital with political capital used for additional leverage. The process of generating reputational capital, transfers the benefits of intellectual and social capital generated by agents to the intellectual unit. While individuals who have their own personal reputations enjoy the use of it, the reputational capital generated through interplay of individual level intellectual and social capitals moves to the institution and remains with it even after the agents responsible for its generation leave the institution. The leadership of the intellectual unit is primarily responsible for the conversion of the individual level intellectual and social capital to unit level reputational capital. It is sustained by reinvesting it toward the generation of additional intellectual and social capital and converting some of the social capital into political capital. Maintaining the density of competence ensures its sustainability. It is further leveraged toward raising financial capital through knowledge management strategies involving resources, recognition, and rewards.
Proposition 5: The reputational capital is leveraged through leadership and management functions to enhance institutional influence in society. It partially mediates the relationship between intellectual, social, and political capital and financial capital. The financial capital, further enhanced by such influence, is used to strengthen the core functions of the school through investment in the creation of intellectual capital, cultivation of social and political capital, and their conversion to reputational capital. Maintaining the density of competence contributes to the sustainability and expansion of institutional influence.
In essence, the basic business lesson endures! The generation of capital and its effective deployment requires leadership and ongoing management. It is good to be mindful of their respective roles and loci. In this case, leadership without management will become inefficient; management without leadership will become ineffective. However, for optimal performance of the unit, we need to locate the leadership at the top. The stock-in-trade for us is knowledge with which all of our capital is generated. As I said earlier, knowledge is a unique commodity that neither depletes with use nor bestows sole ownership in the hands of its producers. This is what makes academic leadership an exciting challenge.
References: Available upon request.

leadership, knowledge management, intellectual capital, social capital, political capital, reputation capital, influence [ view full abstract ]

leadership, knowledge management, intellectual capital, social capital, political capital, reputation capital, influence