The Creation and Deterioration of Intellectual Capital in a Meta-Organisational Context.

The Creation and Deterioration of Intellectual Capital in a Meta-Organisational Context José António Fernandes Lopes Oliveira Vale Tese de Doutoramento em Gestão Especialização em Contabilidade e Controlo de Gestão Orientação de: Professor Doutor Manuel Emílio Mota de Almeida Delgado Castelo Branco Professor Doutor João Francisco da Silva Alves Ribeiro Faculdade de Economia da Universidade do Porto 2015 To my daughter Lara, for all her love and her “child’s play” To my wife Vera, for her love and affection To my parents, for always believing in me To my fathers-in law for their support In memory of Francisco Lopes, “you will always be with me” i Biographic Note José António Fernandes Lopes Oliveira Vale was born in 24 September 1975 in Porto. He lives in Maia, Portugal, with his wife Vera and his daughter Lara. Presently he is an invited lecturer at the Porto polytechnic, teaching several management accounting courses at the School of Accounting and Administration of Porto (ISCAP). In the past, he has also been an invited lecturer at the University of Porto (Faculty of Engineering) and at the University of Aveiro (Department of Economics, Management and Industrial Engineering) where he taught several courses related to management. He is also a chartered accountant and partner of an accounting and consulting firm in Porto. Moreover, José is a member of Porto Polytechnic’s Centre of Studies in Business and Legal Sciences (CECEJ) and member of the Portuguese Accounting Research Network (Grudis). Besides holding a degree in Accounting and Administration at ISCAP, Porto Polytechnic, he holds an MBA in Commercial Operations Management and an MSc in Administration and Management, both granted by the Católica University of Portugal. José has presented communications in seminars and conferences such as ECIC 2011 (3rd European Conference on Intellectual Capital), ECKM 2012 (13th Conference on Knowledge Management) and ECKM 2014 (15th Conference on Knowledge Management). ii Acknowledgments Many individuals have contributed to this journey. Their ideas and namely their support and motivation were crucial to provide me with the rigour and enthusiasm that a PhD demands and to give me strength in the worse moments. Firstly, I would like to express my deepest gratitude to Professor Manuel Castelo Branco and Professor João Ribeiro for all the support they gave me. I was fortunate to have these two fantastic human beings as supervisors, whose guidance and encouragement were crucial to accomplish this project. I wish also to thank the support given to me by several of my colleagues from ISCAP and from UA where I have been working for the past years. I would also like to express my gratitude to my friends for their support. I would also gratefully acknowledge the comments made by the participants in the following conferences: 3rd European Conference on Intellectual Capital (18-19 April 2011, Nicosia, Cyprus); 13th European Conference on Knowledge Management (6-7 September 2012, Cartagena, Spain); 15th European Conference on Knowledge Management (4-5 September 2014, Santarém, Portugal). In addition, I wish to thank the comments made by the editor and the anonymous reviewers of the Journal of Intellectual Capital, which proved extremely useful. My thanks also goes to the organisation in which I undertook my research – the Seaport of Aveiro as represented by its Port Authority. This organisation allowed me to consult several documents which were critical for this research. I also wish to thank iii several of its members and, specially, I am indebted to one member of its board of directors, Doctor Luís Marques. His huge availability to cooperate with this research as well as his contributions were especially valuable. I wish to thank to my parents for always being by my side, in the better and worse moments, always supporting me during my studies and during this doctoral journey. All my achievements have been rooted in their unconditional love. I also wish to thank to my parents-in-law for their encouragement and their support. Also my thanks to the rest of my family, namely my uncles. A word to my two princesses: Lara and Vera. This thesis was only possible to be accomplished due to them. All the strength that I needed in order to accomplish this journey came from their comprehension, patient or a simple smile. This thesis is dedicated to you. A final word to thank a person that is no longer among us, my uncle and godfather Francisco Lopes. He was a person that always believed in me, care for me and was always proud of me. So, wherever you are now, I am certain that you will continue to be proud. You will be always in my heart. iv Abstract This thesis explores the phenomenon of creation and deterioration of Intellectual Capital (IC) within a specific and complex network setting that we labelled ‘metaorganisation’. It is the result of an in-depth single case study which was conducted in a Portuguese seaport – the Seaport of Aveiro. Several issues regarding the creation, deterioration and management of IC are explored along three essays that compose the thesis. In the first essay we explore the effect that the interdependency between a metaorganisation’s IC and its members’ IC has over its creation and deterioration at both levels of analysis. We argue that there are underexplored settings such as meta-organisations in which two types of IC can coexist – the Collective Intellectual Capital (CIC) of the metaorganisation and the Individual Intellectual Capital (IIC) of each one of its members. This essay contributes to IC literature by providing evidence that CIC and IIC appear as a function of both collective and individual dimensions. Although present at different levels of analysis, these two types of intellectual capital are interconnected in a non-linear way. It supports the claim that the whole is different from the sum of its parts, i.e. the metaorganisation’s IC can be different from the sum of its members’ IC. This essay suggests that, although a meta-organisation is composed by individual organisations, there are CIC dimensions that go beyond the individual ones. In the second essay we explore the main factors behind the creation and deterioration of a meta-organisation’s Collective Intellectual Capital and how they are articulated in the production of such effects. This essay contributes to the development of IC research by providing evidence that compatibility/incompatibility of goals and power v are crucial drivers for the creation or deterioration of CIC in a meta-organisation. More specifically, we conclude that Collective Intellectual Assets (CIA) or Collective Intellectual Liabilities (CIL) can be a consequence of collaborative and/or conflictive behaviours, which in turn may result from compatibility or incompatibility of goals and power relations between the various organisations. These connections are encapsulated in an integrated framework where dyadic and more complex relationships are depicted. Finally, in the third essay we explore the management of the meta-organisation’s CIC from a power perspective. In this essay we suggest that, besides deploying resources to develop CIC, a network coordinator should focus on fostering higher levels of collaboration, aiming to develop a more ‘sustainable’ type of CIC. A trust based collective culture should thus be promoted. Thereby, in order to attain that goal, the network coordinator should mobilise different and interrelated dimensions of power, namely the non-coercive ones. This essay provides researchers and practitioners with important insights, namely regarding the dynamics of power and its effects over the Collective Intellectual Capital in a meta-organisational setting. vi Resumo Nesta tese explora-se o fenómeno de criação e deterioração de Capital Intelectual num contexto de rede, específico e complexo, que classificámos de ‘meta-organização’. Resulta de um estudo de caso realizado num porto Português – o Porto de Aveiro, onde diversas questões relativas à criação, deterioração e gestão do Capital Intelectual são exploradas ao longo dos três ensaios que a compõem. No primeiro ensaio exploramos o efeito que a interdependência entre o Capital Intelectual de uma meta-organização e o Capital Intelectual dos seus membros exerce sobre a criação e deterioração deste em ambos os níveis de análise. Consideramos que existem contextos pouco explorados, tais como meta-organizações, em que dois tipos de Capital Intelectual podem coexistir – o Capital Intelectual Coletivo da meta-organização e o Capital Intelectual Individual de cada um dos seus membros. Este ensaio contribui para a literatura sobre Capital Intelectual ao fornecer evidências de que Capital Intelectual Coletivo e Capital Intelectual Individual surgem como função de ambas as dimensões coletivas e individuais. Embora presentes em diferentes níveis de análise, ambos os tipos de Capital Intelectual estão interligados de uma forma não linear. Suporta-se, assim, a afirmação de que o todo é diferente da soma das partes, ou seja, o Capital Intelectual da meta-organização pode ser diferente da soma dos Capitais Intelectuais dos seus membros. Este ensaio sugere que, apesar de uma meta-organização ser constituída por organizações individuais, existem dimensões do Capital Intelectual Coletivo que vão para além das individuais. No segundo ensaio exploramos os principais fatores que estão por trás da criação e deterioração do Capital Intelectual Coletivo de uma meta-organização, bem como a sua vii articulação na produção de tais efeitos. Este ensaio contribui para o desenvolvimento da investigação em Capital Intelectual, fornecendo evidências de que a compatibilidade/incompatibilidade de objetivos e o poder podem ser geradores fundamentais de criação ou deterioração do Capital Intelectual Coletivo numa metaorganização. Mais especificamente, concluímos que Ativos Intelectuais Coletivos ou Passivos Intelectuais Coletivos podem ser uma consequência de comportamentos colaborativos e/ou conflituosos, que por sua vez podem resultar de uma compatibilidade ou incompatibilidade de objetivos e de relações de poder entre as várias organizações. Essas relações estão condensadas num esquema integrado, onde relações diádicas e mais complexas são retratadas. Finalmente, no terceiro ensaio exploramos a gestão do Capital Intelectual Coletivo da meta-organização a partir de uma perspetiva de poder. Neste ensaio sugerimos que, além de investir recursos de modo a desenvolver Capital Intelectual Coletivo, um coordenador da rede deverá focar-se em promover elevados níveis de colaboração, com o objetivo de desenvolver um tipo mais ‘sustentável’ de Capital Intelectual Coletivo. Uma cultura coletiva baseada em confiança deverá, assim, ser promovida. Desse modo, a fim de alcançar esse objetivo, o coordenador da rede deverá mobilizar dimensões de poder diferentes e interrelacionadas, nomeadamente as não coercivas. Este ensaio oferece importantes contributos aos investigadores e profissionais, designadamente relativos às dinâmicas de poder e aos seus efeitos sobre o Capital Intelectual Coletivo num contexto de uma meta-organização. 2 2. Background to the research Many authors consider an organisation’s intangible resources as the most important and required critical drivers of its sustainable competitive advantages (Marti, 2004; Palacios and Galván, 2006). In this thesis we refer to these intangible resources as Intellectual Capital (IC), which can be broadly defined as “the immaterial sources of value related to employees’ capabilities, the organisation’s resources and processes and the relationships with its stakeholders” (Kujansivu, 2008, p. 26). Garcia-Parra et al. (2009) refer to the influential economist John Kenneth Galbraith as having introduced the term “intellectual capital” in 1969. This concept has been especially developed in the 1990s when organisations such as Skandia started to measure and to report it (Marr, 2005). Since 1993, an increase in publications (namely practitioners’ ones) on IC, proposing models for measuring and managing it, was noticed (Marr, 2005). Skandia’s work was indeed valuable to start a debate and promote initiatives regarding IC measurement (Edvinsson, 1997). The importance of research in IC has increased significantly since then and the Lisbon Agenda, which refers to Europe’s effort to promote investment in intangibles, is an evidence of this increasing importance (Lin and Edvinsson, 2011). IC encompasses several disciplines, including accounting. IC accounting is not confined to its measurement. In fact, it can be defined as a “management, accounting and reporting technology towards understanding, measuring and reporting knowledge resources such as employee competencies, customer relationships, brands, financial relationships and information and communication technologies” (Guthrie et al., 2012, p. 70). Several IC models propose different taxonomies for assessing and measuring it. Ferenhof et al. (2015), in their literature review of IC models, identified eleven dimensions of IC, which included the earlier ones proposed by Edvinsson and Malone 3 (1997) or Stewart (1997). Indeed, IC is commonly decomposed into three dimensions: human capital, structural capital and relational capital (Bontis, 1999; Cañibano et al., 2002; Roslender and Fincham, 2001; Liu, 2007). Although several frameworks have been developed to identify and measure IC, most of them focus on the intellectual assets of an organisation. An increasingly important topic of investigation in IC research concerns the concept of intellectual liabilities. This concept resulted from the findings that IC can be seen as a source of value destruction, in addition to the traditional and “too optimistic” view that considers it as an intellectual asset contributing to value creation (Stam, 2009; De Santis and Giuliani, 2013). From a managerial perspective, it is important to identify future organisational success as well as failure (Stam, 2009). Without assessing the latter, value deterioration cannot be foreseen (Stam, 2009). Harvey and Lusch (1999) were the first to address and to theoretically discuss this topic, by developing a model in order to assess the extent of an IL. Since then, ILs have been defined according to two different conceptual streams: as the depreciation of IC’s value (Abeysekera, 2003; Caddy, 2000) and as non-monetary obligations (GarciaParra et al., 2009; Harvey and Lusch, 1999). Intellectual liabilities can be further decomposed in internal and external ones (see Appendix 1 for further detail): internal intellectual liabilities “refer to the causes of deterioration that arise from the sources of value creation within the organisation” while external intellectual liabilities “refer to the causes of deterioration that come from outside and are beyond control of the organisation” (Stam, 2009, p. 99). More recently, Giuliani (2015) combined the concept of IC and IL with the concept of time. Nevertheless, ILs continue to be one of the most under researched and, to a certain extent, avoided concepts in IC research (Dumay, 2013). 4 In this thesis we conceptualise IC from an Intellectual Equity perspective considering that it may be composed of Intellectual Assets (IA) and Intellectual Liabilities (IL) (Harvey and Lusch, 1999). More specifically, and adopting the internal intellectual liability taxonomy suggested by Stam (2009), IC can be considered as being composed by Human Capital (HC), Structural Capital (SC) and Relational Capital (RC), where: HC = Human Assets – Human Liabilities; SC = Structural Assets – Structural Liabilities and RC = Relational Assets – Relational Liabilities. We use this taxonomy as a basis for our analysis. Despite its growing importance, IC research is being mainly discussed in academic or management consulting circles, and namely at a micro-organisational level, i.e. regarding individual firms (Bontis, 2004; Pöyhönen and Smedlund, 2004; Lin and Edvinsson, 2011). Many researchers started to inquire the importance of knowledge resources as sources of regional and local development dynamics, advocating the importance of IC trying to go beyond the study of individual firms, arguing that these ‘macro’ and ‘meso’ organisation systems can obtain competitive advantages from IC (Schiuma et al., 2008). Hence, in the last decade, contributions underlying the strategic importance of intangibles for value creation capabilities at a ‘meso’ or ‘macro’ organisational level (e.g. local production systems, clusters, cities, regions and nations) have been growing (e.g. Maditinos et al., 2010; Bontis, 2004; Pöyhönen and Smedlund, 2004; Lin and Edvinsson, 2011; Schiuma et al., 2008; Palacios and Galván, 2006). Economists usually use the concepts of natural, physical and financial capital to assess value creation in these contexts (Schiuma et al., 2008). Lin and Edvinsson (2011, p. 8) claim that if “intangible assets are important to private enterprise organizations, they should also be important in increasing the productivity and competitiveness of the public sector, the nation, and the region”. In a knowledge economy, IC can thus be crucial to ‘meso’ and macro-level units in the same way that it is a critical concept to organisations 5 or individuals (Bounfour and Edvinsson, 2005). Business models are being translated to nations or regions and there has been an effort to apply the traditional IC methodologies to broader scopes of analysis (Lin and Edvinsson, 2011). In this type of settings, IC can be assessed at different but interconnected levels (Nielsen and Dane-Nielsen, 2010). According to Nielsen and Dane-Nielsen (2010, p. 9), organisation’s characteristics are “made up of a series of properties from a process beginning with the individuals’ (subunits’) knowledge and skills, moving through group practices and traditions to organizational value creation through a number of mechanisms consisting of communication and organizational infrastructure”. They argue that higher levels emerge out of the lower levels and that higher independent supra-individual formations representing the interacting forces are created. Accordingly, research on IC is far more complex when applied to ‘meso’ or macro-level units. In these cases we refer to a Collective Intellectual Capital (CIC: see chapter 2) that results from interaction at a lower level. In this line of thought, Edvinsson (2013, p. 170) claims that the traditional view of IC with its traditional taxonomy should be “reframed to establish a deeper understanding of a higher form of capital”, considering as crucial to understand IC at different levels of analysis. Edvinsson (2013) also considers that IC research should be approached in a crossdisciplinary way, emphasising the role of networks (or relational capital) and stressing the importance of IC research to go beyond the theory of the firm and follow the new trend of networked organisation. From a ‘macro’ level perspective, Edvinsson (2013) emphasises the study of IC of settings such as knowledge cities/hubs or knowledge harbours. Indeed, there are still specific settings which, as long as we are aware, are underexplored, such as the case of meta-organisations. 6 In this thesis we conceptualise a meta-organisation as an organisation per se, which “comprise networks of firms or individuals not bound by authority based on employment relationships, but characterised by a system-level goal” (Gulati et al., 2012, p. 573). A meta-organisation has its own goals, although its members may or may not share it (Gulati et al., 2012). First, this definition suggests that a meta-organisation is composed by networks. Indeed, an organisation can be defined as a social open system or networks of coordinated activities between two or more actors, interacting with the environment, whose boundaries are determined in the first place by their functions and activities, and that behave more organically and less mechanistically (Allee, 2010; Cetin and Cerit, 2010). A ‘system’ is an “organized, unitary whole composed of two or more independent parts, components or subsystems and delineated by identifiable boundaries from its environmental supra-system” (Cetin and Cerit, 2010, p. 196). In order to be effective, these subsystems need to be in harmony and coordinated to work together. Moreover, the outputs of one subsystem can be the inputs of another (Cetin and Cerit, 2010). Rao (1996) claims that an alliance can be thought as a new meta-organisational form, whose main objective is to facilitate knowledge exchange, operating in a meta-organisational culture that transcends the firm’s cultures. Second, the traditional logic of authority, with its inherent characteristics such as control, hierarchy, formality roles or financial incentives, does not fit well with this type of organisation (Gulati et al., 2012). Third, the actual effectiveness of a specific organisation is determined by the degree to which it achieves its goals (Cetin and Cerit, 2010). Indeed, a meta-organisation can be seen as a “whole network”, i.e. a “group of three or more organizations connected in ways that facilitate achievement of a common goal” (Provan et al., 2007, p. 482). 7 Seaports constitute examples of such settings. Although seaports have been conceptualised in several different ways, such as clusters (de Langen, 2004), we argue that they possess the characteristics to be conceptualised as meta-organisations. Despite not having legal personality, seaports act like single organisations by cooperating with and competing against other seaports, aiming to attract clients (Robinson, 2002). They are complex networks where multiple actors are connected with each other, providing a maritime logistics service in a coordinated way, aiming to create higher value to the final customer/user (Lee and Song, 2010; Bichou and Gray, 2005). Spatial proximity is an important factor to facilitate learning interactions between organisations, including the creation, acquisition and application of knowledge (Hall and Jacobs, 2010). On the other hand, networking improves the flow of information (Sporleder and Peterson, 2003), give organisations the knowledge that they cannot obtain in-house and also give them external economies of cognitive scope (Visser, 2009). According to supply chain literature, the network goals coexist with each member’s own goals (Gagalyuk et al., 2010). Not only the seaport’s members possess their goals and follow their individual strategies, but also the seaport (as a whole) may pursue its own goals. Consequently, members’ individual strategies have to be accommodated within a logic for collective action (Gulati et al., 2012). A seaport provides a collective service that results from the combination of services of various firms (such as pilots, towage firms or terminal operators) which have to strongly cooperate with each other as a team to improve their operational efficiency and service effectiveness and therefore maximise the logistics performance of the seaport (de Langen, 2004; Lee and Song, 2010). Although stakeholder’s interests influence their individual behaviours, collaboration between them is crucial in order to create value for the whole seaport (Notteboom and Winkelmans, 2002). The attainment of network-level goals (namely in terms of performance) is dependent on the level of collaboration between the network’s 8 members (Gagalyuk et al., 2010). Therefore, from the seaport level of analysis, collaboration between its members as well as between them and the network coordinator (which represents the seaport’s interests) is crucial for CIC to be created – for example, by leading to quicker processes (Lee and Song, 2010). From an individual perspective, collaboration can develop an organisation’s IC: by collaborating, organisations may acquire or create new knowledge, thus developing its Individual Intellectual Capital (IIC) (Forsman and Solitander, 2003; Joia and Malheiros, 2009; Seleim and Khalil, 2011). However, relationships between seaport’ members can be very complex. At stake is a specific way of organising relationships between legally autonomous agents such as firms (Gulati et al., 2012). Besides being able to have different interests in the seaport, actors might as well have different levels of power (de Langen, 2006). Power is a crucial variable when studying networks and particularly this type of setting (Olivier and Slack, 2006). Defining power has been troublesome. Classic definitions such as Dahl’s (1957) emphasised the decision making behaviours regarding ‘key issues’ in observable conflict situations. According to Dahl (1957, pp. 202-203) power is exercised when “A has power over B to the extent that he can get B to do something that B would not otherwise do”. Furthermore, Dahl (1957, p. 203) argues that “the base of an actor’s power consists of all the resources – opportunities, acts, objects, etc. – that he can exploit in order to effect the behavior of another”. Threats or promises are examples of such resources. Hardy (1996) labelled this single-face of power as ‘power of resources’. However, Bachrach and Baratz (1962, p. 948) questioned this view, arguing that conflict could exist even if not directly observable and that power could also be “exercised by confining the scope of decisionmaking to relative ‘safe’ issues”, i.e. a person or a group could limit decision-making to non-controversial issues, by exerting an influence over others’ values or procedures. They 9 considered that agendas could be set up through ‘non decision making’ processes, i.e. by making use of power to ensure that things would not be done by preventing others from participating fully in decision making. Hardy (1996) termed this second type of power as ‘power of processes’. Lukes (1974) considered the above two dimensions as insufficient to assess power relations, thus adding a third dimension to Bachrach and Baratz’ (1962) proposal: the capability to shape actors’ preferences, perceptions and cognitions of “what are their real interests”, i.e. ‘power over meanings’. The exercise of this type of power could thus make individuals to accept the status quo because they would not even think of an alternative. Lukes’s (1974) work suggested that attention should be paid to issues of power least accessible to observation. These different perspectives allowed to position this thesis, by adopting Hardy’s (1996) four dimensional concept of power, which encompasses the three dimensions of Lukes (1974) – power of resources, power of processes and power of meanings – adding a fourth one: ‘power of the system’, i.e. the power that is embedded in an organisation’ culture and structure and that is taken for granted. Hardy (1996) claims that in order to produce organisational change, these three dimensions could be used against the ‘power of the system’. Hardy (1996) stresses the importance of introducing modifications to the structure, systems, human resource policies and culture to align the organisation with its desired strategy, i.e. by introducing change to IC related aspects, the process of strategy making can be more successful. There are, of course, alternative models of power. Among these, the so-called ‘circuits of power’ framework (Clegg, 1989) has been widely employed in research. The author emphasises the ways networks of power relations are configured and stabilised, fixing circuits through which power strategies must be conducted. The framework thus attempts to bridge structure and agency, arguably with some focus on the way structures of relations, or networks, of power emerge, in time, as a result of (human and non-human) agency. The emphasis in this thesis is more situated: 10 here, we are looking at the way a specific agent moves within different dimensions – or circuits – of power in its management activities, and specifically in order to influence the creation of intellectual capital in a meta-organisation. We are not looking at the way the overall network of power relations is constructed. In fact, this would imply a scope of analysis that the present thesis does not aim to achieve. “Interests” and “Power” may trigger different behaviours towards an organisation’s strategy, i.e. its members may act by supporting or obstructing it (Ackermann and Eden, 2011), thus affecting both individual and collective IC. The seaport has collective goals, but members have their own individual ones, and they may prioritise these in detriment of the common ones (Notteboom and Winkelmans, 2002; Winkler, 2006). This is likely to lead to non-collaborative or even conflictive behaviours towards other organisations, including the network coordinator (Gagalyuk et al., 2010), which in this case is the port authority. As far as the authors are aware, literature on IC only addresses the positive side of relationships, i.e. the intangible assets – namely knowledge development – resulting from collaboration, and not the intellectual liabilities that may emerge from conflict. For the meta-organisation to achieve its goals, leader organisations such as the port authority should set up collective goals and try to influence the members’ individual behaviours, aligning them with such goals, by promoting collaboration for instance (Provan et al., 2007; de Langen, 2004; de Langen, 2006; Gagalyuk et al., 2010). In order to ensure that no one can appropriate the benefits of the collective service to themselves, coordinating mechanisms are necessary (de Langen and Visser, 2005). Although some authors make a distinction between cooperation, coordination and collaboration, namely based on the level of interaction between actors (Polenske, 2004; Ketchen et al., 2008; McNamara, 2012), in our study we use the term collaboration to refer to the “interaction 11 between participants who work together to pursue complex goals based on shared interests and a collective responsibility for interconnected tasks which cannot be accomplished individually” (McNamara, 2012, p. 391). We consider this concept more suitable to the specificities of the setting we analyse in this research. Consequently, by collaborating, actors may easily share knowledge between them (Lee and Song, 2010). Therefore, considering that seaport’s members may act in order to benefit themselves even if damaging the performance of the collective (Cabrita and Bontis, 2008; Ketchen and Hult, 2007), managing the seaport implies motivating members to collaborate (and share knowledge). It also implies overcoming possible collective problems that might emerge (Sporleder and Peterson, 2003). Coordination is thus a crucial variable in this type of context, in order to account for the best interests of the whole system (Gulati et al., 2005; Gulati et al., 2012). However, in a seaport the network coordinator might not have the legal power to impose rules to other members, which means that both forms of coercive and non-coercive power might be used in order to successfully manage the network (Belaya and Hanf, 2009a). Besides investing in CIC creation (e.g. by providing training or developing IT systems), port authorities should focus on an efficient management of relationships. On the one hand, by exerting power to solve collaboration problems. On the other hand, and crucially, by fostering a “culture of collaboration” in order to develop a more ‘sustainable’ type of CIC. 3. Research objectives As referred above, we intend to contribute to a better understanding of the phenomenon of creation and deterioration of IC within a specific and complex networking environment that we call meta-organisation. A meta-organisation can be considered as an 18 5. Structure of the thesis This thesis is structured in three essays which follow a sequence. Accordingly, it is organised as follows: Chapter 2 includes the essay “Individual Intellectual Capital versus Collective Intellectual Capital in a Meta-Organisation” 1 . Chapter 3 includes a second essay titled “A Relational Approach to the Creation and Deterioration of Intellectual Capital in a Meta-Organisation” and finally Chapter 4 includes the essay “Intellectual Capital Management and Power Mobilisation in a Meta-Organisation”. Since the essays are related with each other some information can be repeated, namely regarding the research method. The final chapter of this thesis ends with a conclusion which offers a summary of the essays and discusses its main contributions. Then, some limitations are described and indications for further investigation are suggested. This chapter ends with some concluding remarks. 1 A shortened version of chapter 2 has been accepted for publication in the ‘Journal of Intellectual Capital’, and is scheduled for publication in 2016. 19 Chapter 2 – Individual Intellectual Capital versus Collective Intellectual Capital in a Meta-Organisation Abstract Although there have been some efforts to apply the traditional Intellectual Capital (IC) methodologies to a bigger scope, such as regions or nations, some ‘meso’ level empirical contexts are still unexplored. This is the case of meta-organisations. In this essay we discuss and analyse how intellectual capital (IC) is created and deteriorated in a meta-organisation by assessing the interdependency between the collective IC of the meta-organisation and the individual IC of its members. We discuss how the creation and deterioration of IC at one level (individual or collective) may have positive or negative impacts at the other level. To support this discussion, based on a case study conducted in a specific metaorganisation – a seaport, we provide several illustrations depicting different types of relationships between both types of IC. Evidence suggests that IC appears as a function of both individual and collective IC dimensions. Changes in the meta-organisation’s IC or in its members’ IC may have different impacts on each other. This means that members’ actions not only may generate Intellectual Assets (IA) or Intellectual Liabilities (IL) for themselves, but also, due to the fact that they belong to a specific network where interdependency is high, may lead to collective intellectual assets or even liabilities. Also, an increase or decrease of the seaport’s own CIC can also have different types of impacts at the individual level. Evidence also suggests that those changes in IC should be analysed in a longitudinal way, since both levels affect each other in different ways over time. Despite the validity of our interpretations in the context of the case study, generalisation to other situations should only be conducted in a theoretically framed manner. This study provides important insights for academics, as well as important strategic and managerial implications for seaports and their stakeholders, who are concerned with their performance. 20 1. Introduction The assertion that organisations are more dependent on intangible resources than on tangible ones for the creation of sustainable competitive advantages has become commonplace (Marti, 2004; Palacios and Galván, 2006). The term IC – Intellectual Capital – is used to refer to non-physical sources of future economic benefits (Cañibano et al., 2002). Research on IC has focused mainly on individual business firms, treating knowledge in a static way (in terms of a knowledge stock), namely by identifying and evaluating the intangible assets owned by an organisation in a particular moment, and not in a dynamic way (in terms of knowledge flows) (Pöyhönen and Smedlund, 2004; Schiuma et al., 2008). These two approaches to IC (static and dynamic) are also discussed by Kianto (2007). In other types of settings, such as regions, nations, clusters and local production systems, economists have focused on natural, physical and financial capital in order to explain why some are able to create more value than others (Schiuma et al., 2008). However, in the last decade, the importance of knowledge as a source of regional and local development has been acknowledged and many argue that ‘macro’ organisations can obtain competitive advantages from knowledge resources (Schiuma et al., 2008; Maditinos et al., 2010). Despite all the progress, there is still a great deal to know about IC in these broader, more ‘macro’ and ‘meso’, types of organisations. In particular, seldom have researchers used a network-level approach to explain how individual organisations and their actions might affect outcomes in the networks in which they are involved (Provan et al., 2007). In this thesis, we analyse IC at a ‘meso’ level, namely by focusing on the networking arrangements between organisations (Smedlund, 2006). By examining a whole network we can gain insights about how it evolves, how it is governed and how 21 collective outcomes (such as IC) might be generated (Provan et al., 2007). Although theories concerned with organisational design emphasise several elements such as formal authority, control, incentives’ design and formal roles, such elements may not be present in settings (e.g. clusters; networks) that perform as a single unit (Gulati et al., 2012). We will call them meta-organisations. The meta-organisation’s IC (hereafter mentioned as collective IC, or CIC) should be managed in order for sustainable competitive advantages to be acquired. This is a study which aims to improve understanding about how IC is created and deteriorated in a meta-organisation. It resorts to Provan et al.’s (2007) typology of interorganisational network research to assess the impact of individual organisations on the whole network’s IC and vice-versa. The main research questions addressed are:  How does the creation and deterioration of IC at the individual level affect the CIC in a meta-organisation?  How does the creation and deterioration of IC at the collective level affect members’ IIC in a meta-organisation? As far as the authors are aware, the processes of IC creation and deterioration, and namely the relationship established between the IC of the meta-organisation (collective IC, or CIC) and the IC of its members (individual IC, or IIC), have not been fully explored in the literature. This is an important gap, since such a relationship is, so we hypothesise, not necessarily a straightforward one. In this essay, we discuss the possibility that the increase in the IIC of a member of the meta-organisation may not mean a proportional increase of the CIC. Individual actions aimed at increasing IIC can even deteriorate the CIC, i.e. lead to an intellectual liability (IL) for the entire meta-organisation. Finally, we conjecture that collective actions that increase or decrease the CIC may also have positive 22 or negative impacts at the IIC level. These hypotheses have not been considered in extant literature. This essay results from a case study conducted in a Portuguese seaport. The review of literature on IC in ‘macro’ and ‘meso’ units allowed us to identify some yet unexplored empirical contexts, such as seaports, which can be seen as complex organisations that possess certain specific characteristics that differentiate them from other collective organisations. These characteristics allow them to be conceptualised as metaorganisations, hence turning them into valuable settings for the study of IC creation and deterioration, and more specifically, for the provision of evidence about the relationships between individual and collective IC. Although seaports should use its available tangible and intangible resources in the best way possible, it is critical that they concentrate their investments on the hard-to-imitate intangible aspects, i.e. the IC (Marlow and Casaca, 2003). Seaports are complex network systems composed of interrelated organisations with common objectives, collaborating with each other in order to create value for themselves, for the network, and for the final consumer. Synchronic forces are played out among a pluralistic port community that strives for common internal and external goals (Olivier and Slack, 2006). The traditional design logic of control, hierarchy, formality roles and financial incentives does not “fit” with this type of setting which function as an organisation per se (Gulati et al., 2012). The case study allowed us to better comprehend IC at a specific ‘meso’ setting, namely by depicting the interdependencies between a meta-organisation’s and its members’ IC, offering some illustrations of different instances of articulation between individual creation/deterioration of IC and collective creation/deterioration. It also suggests that to assess CIC in this settings, due to this multi- 23 level interrelationship one has to go beyond the mere translation of micro-level models to higher levels. In the next section we review the concepts of Intellectual Assets (IA) and Intellectual Liabilities as sources of value creation and deterioration, respectively. Also, we go beyond the study of IC at the firm level, and underline the importance of IC in ‘meso’ and macro-level units, namely in a particular type of complex network that we label meta-organisation. We differentiate IIC and CIC within a meta-organisational context with its own intrinsic characteristics. Then, a conceptual framework that is theoretically grounded on the literature reviewed is proposed. In section 3 we describe the methodology adopted in our study. In section 4 we present the case study that provides us with the empirical material to validate the conceptual framework proposed. In section 5 we discuss the case study’s findings and, finally, in section 6 we offer some concluding remarks and present the study’s implications for both practitioners and researchers, as well as some cues for future research. 2. Background and relevant literature 2.1. IC creation and deterioration – IC as an asset or a liability IC is most often considered as the sum of an organisation’s intellectual assets, and as such the expressions “intellectual capital” and “intellectual assets” have been used interchangeably (Caddy, 2000). A common approach to the conceptualisation of IC is by decomposing it into three dimensions: human capital, structural capital and relational capital (Cañibano et al., 2002; Roslender and Fincham, 2001; Liu, 2007). Human capital refers to employees’ individual knowledge, attributes, attitudes and abilities like 24 creativity, know-how, experiences, or loyalty (Cañibano et al., 2002; Habersam and Piber, 2003; Jacobsen et al., 2005). Structural capital includes systems and networks, cultures and values, and elements of intellectual property (Cañibano et al., 2002; Roslender and Fincham, 2001; Jacobsen et al., 2005). Intellectual property includes patents, trademarks, licenses, etc. (Jacobsen et al., 2005). Jacobsen et al. (2005) also claim that structural capital encompasses all internal processes, models, IT systems and documentation. Relational capital refers to the external relationships with the organisation’s stakeholders and to their perception about it (Cañibano et al., 2002; Habersam and Piber, 2003; Jacobsen et al., 2005). It includes dimensions such as image, customer satisfaction or the achievement of financial support (Cañibano et al., 2002; Habersam and Piber, 2003), being related to the concept of “learning organisation” (Nazari and Herremans, 2007). Jacobsen et al. (2005) stress the importance of the brand as a component of the relational capital, focusing on aspects such as attitude, preference or reputation. The traditional view of IC is related to the creation of competitive advantages and value for the organisations. In many cases, investments in human capital may generate structural capital, which in turn may lead to an increase in relational capital. However, investments in IC can also destroy value. Research on issues regarding organisational decline is still limited and IC research follows this same trend. IC literature mainly focus in the “mainstream” IAs, underestimating the importance of ILs (Stam, 2009). Harvey and Lusch (1999) were the first to address and theoretically discuss this topic, considering as myopic the traditional assumption that all intellectual capital leads to an increase in equity. Caddy (2000) developed further such discussion, arguing that IC should be assessed in net terms by subtracting ILs to IAs, considering the factors that erode the value of intangible assets as intangible liabilities. Since 1999, ILs have been 25 defined according to two different perspectives: a strategic and an accounting one (Garcia-Parra et al., 2009). The strategic perspective is based on the depreciation of IC’s value (Abeysekera, 2003; Caddy, 2000). This perspective is focused on the intangible causes of value loss such as the use of IAs on a bad idea, employees’ lack of commitment, employees’ lack of capabilities, or loss of key employees (Garcia-Parra et al., 2009). Hence, ILs can be defined as the “potential non-physical causes of organisational deterioration” (Stam, 2009, p. 95). Furthermore, internal and external intellectual liabilities can be distinguished (Stam, 2009). Stam (2009) adapted the traditional IC taxonomy to his internal IL concept: human liabilities, such as employee turnover or insufficient training, involve reductions in the value that employees bring to the organisation, their knowledge, experience or motivation; structural liabilities are related to decreases in the value of procedures, processes and culture of the organisation (weak strategic planning processes or a knowledge unfriendly culture are examples of such liabilities); relational liabilities are related to declines in the value of relationships with customers, suppliers and other stakeholders (e.g. negative word of mouth; poor corporate reputation). The accounting perspective is considered to be closer to the classical definition of liabilities, viewing ILs as non-monetary obligations (Garcia-Parra et al., 2009; Harvey and Lusch, 1999). This approach is based on Harvey and Lusch’s (1999, p. 87) classification of intangible liability as representing “the responsibility of the firm to transfer economic resources or provide services to other entities in the future”. This essay adopts the definition of IL suggested by Garcia-Parra et al. (2009, p. 827), which integrates both perspectives: “all non-monetary obligations related to the stakeholders that the company must fulfil, in order to avoid the depreciation of its intangible assets”. For example, the non-fulfilment of working conditions may lead to 26 changes in employees’ attitudes, something which can have negative consequences regarding organisational processes or activities (depreciating its structural capital). These negative effects may also affect the organisation’s relationship with their stakeholders thus depreciating its relational capital (Garcia-Parra et al., 2009). This topic may also be approached from a different level of analysis. For example, from an inter-organisational point of view, other organisations might form expectations related to non-monetary obligations, which if not accomplished might affect the relational capital (Garcia-Parra et al., 2009). From a single firm perspective, organisations should try to fulfil non-monetary obligations to avoid the depreciation of its IAs (e.g. trying to meet with employees’ expectations regarding promotion opportunities or working conditions) (Garcia-Parra et al., 2009). In order to minimise the negative impacts of ILs, organisations should react in quick and efficient ways by using IAs to decrease the IL’s size and life span (Caddy, 2000). This is a crucial task since the process of value deterioration leads to negative consequences in a much faster way than when compared with the processes of value creation (Giuliani, 2015). Giuliani (2015) argues that the time is crucial to assess the negative consequences that, from a dynamic perspective, may emerge from IC, something which has been neglected in IC research. As he puts it: “viewing IC as a process means taking into consideration its life cycle, its changes over time and thus, the time variable” (Giuliani, 2015, p. 5). IC creation/deterioration is a dynamic process that evolves over time, and time, seen as in longitudinal studies, is essential to better comprehend this process. For instance, there is a lag between the investment in IC and its development (Giuliani, 2015). Although these themes are generally addressed from a firm’s perspective, they may also be approached from a higher level of analysis. 27 2.2. IC beyond individual organisations In the last decade, many researchers have pointed out the importance of knowledge resources as a source of regional and local development, advocating the importance of studying IC beyond individual firms (Schiuma et al., 2008). As Lin and Edvinsson (2011, p. 8) put it, “as intangible assets are important to private enterprise organizations, they should also be important in increasing the productivity and competitiveness of the public sector, the nation, and the region”. IC research at ‘macro’ and ‘meso’ levels has been gaining some importance in the past decade. Nevertheless, a lack of academic discussion about IC at these levels still subsists (Krušinskas and Bruneckienė, 2015). Most IC research at higher levels of analysis has been focused on Nations, namely as a means to support decision making with the aim of increasing wealth (Seleim and Bontis, 2013; Labra and Sánchez, 2003). The first countries to assess their Nation Intellectual Capitals (NIC) were Sweden and Israel (Bontis, 2004). Since then, several authors have been studying IC in Nations (Lin and Edvinsson, 2011). An important contribute was given by Bontis (2004), who developed a NIC index by assessing IC in Arab countries. Intangible factors can create competitive advantages for ‘meso’ level settings that compete with each other (Krušinskas and Bruneckienė, 2015). Several proposals have been made, such as those of Marti (2004), who applied his IC Benchmarking system model to a city or Palacios et al. (2006), who studied the implementation of an intellectual capital model in a network of cities. More recently, Krušinskas and Bruneckienė (2015) presented a city’s IC balance index grounded on the analysis of the biggest three Lithunian’s cities. Research on ‘regional IC’ has also improved. For instance, Schiuma and Lerro (2008) considered value creation at a region level as a consequence of its knowledge-based capital, i.e. its regional intangible resources. Other settings such as 34 Single case study methodology is a widely accepted one. Miles et al. (2013, p. 31) acknowledge that “much of qualitative research examines a single case”. Although multiple-case studies offer the possibility of generating theoretical constructs by observing contrasting instances, the option for a single case study is advantageous because it can allow more attention to be given to distinctive and typical characteristics of a particular context. Our aim is to promote a deep understanding of the case within this unique type of environment (Mills et al., 2010). A seaport context is a complex one were interrelations between actors are of the utmost importance to comprehend the phenomenon. Hence, we considered that an in-depth understanding of the context was required, and chose the single case study method because it would allow more attention to be given to the Seaport’s specific characteristics. The usefulness of the single case study is stressed by Dyer and Wilkins (1991), who argue that an in-depth study of a single case allows a deeper understanding of the setting under research and that the use of multiple cases to build theory may neglect important aspects of that setting. Seaports can be broadly conceptualised as “complex entities supporting the procurement of raw materials, the manufacturing and the distribution of finished goods” (Carbone and De Martino, 2003, p. 306), i.e. as an important element (in a dynamic logistics chain) for the management and coordination of commodities, people and information, which flow through it (Roh et al., 2007; Carbone and De Martino, 2003). From a systems perspective, seaports can be seen as “open systems interacting with their turbulent environments and affecting from the changes in the logistics and supply chain, transport industry, and in a broader concept, the trade and manufacturing industry”. They can also be seen as networks of interrelated subsystems interacting with each other in order to function as a whole (Cetin and Cerit, 2010). We conducted a case study in a seaport setting because it has the necessary characteristics to differentiate it from other collective organisations (see Gulati et al., 35 2012) and to provide us with evidence about the attended phenomenon, specifically: it is composed by a network of organisations with activities that may increase the value added output of the seaport (Roh et al., 2007); the system level goal premise is present in this context, i.e. a seaport pursue its own collective goals (de Langen, 2004), notwithstanding the fact that each one of its members pursue their own goals; finally, and crucially, the extent of authority. Regarding authority, Marques et al. (2011) consider seaports as mixed-type networks where a public organisation acts as a coordinator whose powers are not unbound. In “whole networks”, not always coordinators have the legal power to impose actions to other network members (Marques et al., 2011). To attest the arguments presented in the previous sections and depicted in Figure 2.1, we made use of four episodes, pertaining to situations where the creation or deterioration of IC at one level (individual or collective) has positive or negative impacts at the other. These episodes were chosen according to a conceptual question, not by a concern for representativeness (Miles et al., 2013). During the collection of the data, multiple sources of evidence were used and also a chain of evidence was established. The necessary information was collected through exploratory discussions and interviews with members of the Aveiro’s Port Authority (APA) and also by documentary analysis. Indeed, documentary data played a crucial role in this research. Finally, although briefly, the direct observation method was used in order to understand the operation of a seaport. The selection of the interviewees was based on their knowledge about the seaport processes and about specific episodes and their potential contribution to this essay. Discussions were held and interviews were conducted between April 2010 and September 2014. Notes were taken of all discussions and interviews. The semi-structured interviews were recorded, and the most important parts were transcribed. 36 In order to understand how the IIC and the CIC in the Seaport relate with each other, we started with an analysis of the empirical context. In a first stage (April 2010 – January 2012), we held four exploratory discussions and conducted two semi-structured interviews with one member of the Port Authority’s Board of Directors (MotB), which had an approximate length of 90 minutes each. We sought to gain a better knowledge about a seaport and its internal processes by identifying the various types of firms that compose it and understanding the relationships they establish with each other. It was also our intention to gather details about events that could illustrate the aforementioned relations. The exploratory discussions and interviews, along with the review of literature, suggested that the Seaport possessed the necessary characteristics to be conceptualised as a meta-organisation. In a second stage (2012-2013) we focused on the chosen events in order to identify how the different actors create and deteriorate their own IC and, chiefly, to determine the impact that those actions had in other actors’ IC and on the CIC. Also, the (positive or negative) impact of changes in CIC on individual firms’ IC was explored. In this stage, four semi-structured interviews to the MotB were conducted. This interviewee was fundamental to our research not only due to his technical knowledge regarding maritime transportation and logistics but also due to his knowledge about several important events that occurred or were occurring in the seaport. These interviews were complemented and triangulated with a 2 hour semi-structured interview with an APA’s Business Development Manager (BDM) in June 2012, and another two interviews (in June 2012 and February 2013) with an ITsM (the first was a preliminary one lasting about 30 minutes and the second lasting 2 hours). The interview with the BDM was very fruitful since the interviewee had a general knowledge about all the episodes under analysis. The interviews conducted with the ITsM, who is a regular collaborator of the “Portuguese Ports Association” portal, helped us to collect information about the technical details of 37 the Seaport of Aveiro’s IT System, and also about the whole developments and main events that occurred since its beginning. Finally, an unstructured interview was held with a Responsible for the Environmental Area (RftE), who not only described how the APA’s environmental system works, but also provided important insights about its impact on the port community. This interview took about 75 minutes. In 2014 we conducted two complementary semi-structured interviews with the MotB and the ItsM in order to better precise some information regarding two illustrations that will be depicted below: “The strikes” and “The IT system”. These interviews had an approximate length of 30 minutes each. Documentary analysis was also made and it was crucial in this research. Documents were collected in APA between June and August 2012: these included emails, faxes, contracts and internal memos concerning relationships between the Port Authority and other members of the Seaport, and also between members themselves. A deep analysis regarding the APA’s Strategic Plan and its Environmental Management System was also conducted. Environmental management manuals and progress reports concerning the Environmental Management System were of the utmost importance. The progress reports allowed us to analyse the four types of plans related to it: training plans, monitoring plans, internal emergency plans and internal auditing plans. All those documents were available when requested due to the fact that the Port Authority is a public and state owned organisation. Furthermore, several other documents were collected from external sources, such as sustainability reports or annual reports and accounts. The high media coverage regarding the problem of the strikes occurring in the Seaport (as we will illustrate bellow), provided significant records such as interviews held to the press by different actors. This type of data allowed us to better depict the episode. 38 Regarding the data analysis, we followed the five stages of analysis suggested by Yin (2011): compiling, disassembling and reassembling data, and then interpreting and concluding. The whole process was an iterative one. 4. The case study The Seaport of Aveiro is a multi-functional Portuguese seaport with an important role in serving the industrial sector in central and north of Portugal, as well as in central Spain. It plays a key role in the economic development of the ‘centre’ region in Portugal. Within the Seaport of Aveiro, several private actors develop their activities along with public ones, such as the Port Authority. The Seaport is administered by the APA, an organisation with exclusively public capitals. We consider that the APA is the one entity that ‘represents’ the collective. The port authority can be defined as the ‘cluster manager’ and, thus, the most central actor (de Langen, 2004), whose objective is to improve the quality of collective action regimes in port clusters (de Langen and Visser, 2005). However, besides solving collective action problems, port authorities should also seek to develop the port network by creating core competencies, thus ensuring port competitiveness (Notteboom and Winkelmans, 2001; Marques et al., 2011). They can play an important role through different initiatives such as by creating opportunities for value-added logistics, stimulating logistics polarisation, developing information systems, participating in the planning and/or implementation of new transport services, or developing strategic relationships with other organisations (Notteboom and Winkelmans, 2001). 39 We suggest that within a seaport the creation or deterioration of IC may occur in two ways: first, members’ individual IC may have a positive or negative impact on the collective IC; second, collective IC may also have impact at the individual level (see figure 2.1 above). The following illustrations entail instances of such situations. 4.1. The new business unit Within the Seaport of Aveiro there is an organisation (an operator) that belongs to a big Portuguese corporation, providing services of cargo handling, warehousing, distribution and logistics. Having already been granted (in 2001) with the concession of the Aveiro South Terminal, this operator was in 2008 granted with the use of a space in the Dry Bulk Terminal of the Seaport. This involved a considerable investment, including the creation of a new business unit and a new brand. This new business unit (an agribulk terminal) started its commercial operations in August 2008. Along with the (major) investment in tangible assets, this project led to an increase of the operator’s IC through several different ways. For example, the concession of the space and the creation and licensing of the new brand are by definition investments in Structural Capital. They also developed certified internal procedures regarding quality management and food safety management system, respectively, which is one more example of IC development. This investment in a new brand not only created awareness of the new service provided by the operator, thus developing relational intellectual capital for the operator, but also increased the reputation of the whole Seaport. According to an APA’s MotB: “The Seaport’s image clearly was reinforced. It is a new variable in terms of value proposition for our clients. We didn’t have any facilities with those characteristics. Also, by making such a huge investment, the 40 operator gave a proof of confidence in the Seaport, which is a positive signal for the Seaports’ reputation (…). When they sell themselves [the new brand] to their clients, they also sell the Seaport”. This means that there was an improvement of CIC as a consequence of the increase in the operator’s IIC. On the other hand, by including the operator in its promotion actions, the Seaport was developing not only its CIC, but also the operator’s IIC. The same MotB added that: “In presentations of the Seaport promoted by the Port Authority, they started to include a presentation of the operator’s new brand in order to create awareness towards the Port brand”. IIC and CIC were also developed in other ways. This investment led to the creation of new procedures and new competencies for the operator. In addition, given that within a seaport, organisations are part of a larger network intended to provide a collective service to the customer, new competencies had to be developed for the whole Seaport. The MotB claimed that: “There was [now] a new market segment that would have to be handled in a different way (…) and the operator cannot act alone. For example, they had to train stevedores specifically for that unit”. However, in 2013 there were reasons to consider that the investment was also leading to a collective intellectual liability. Clients had certain expectations regarding the use of this new installation and these expectations were somewhat unfulfilled. Indeed, the MotB argued that: “The project was expected to have a much higher market share than the one we are experiencing. Customers had expectations that the project would be very successful. [But the lack of success means that] the 41 reverse happens. The initial proof of trust also becomes a proof of distrust”. 4.2. The strikes Dockers pools are organisations responsible for managing ports’ workforce. In the Seaport of Aveiro, the Dockers Pool is a legal association which employs most of the stevedores’ work force. This association includes port operators and the stevedores’ Union (henceforth, the ‘Union’). When port operators need to perform any operation, they contract stevedores, paying their hourly fees. The Union aims to protect the stevedores’ interests. Conflicts between port operators and the Union are relatively frequent in the Seaport of Aveiro. In 2009 a major conflict has arisen. Dockers Pool’s costs surpassed their revenues, and in order to solve this situation, its management proposed a decrease in the stevedores’ wages, but the Union was against this solution. After several meetings between the Dockers Pool, the National Regulator and the Port Authority, no agreement was reached and the Union went on strike. As a consequence the Seaport closed for three weeks. In 2011 another conflict led to another strike. In the first week of December 2011, the Dockers Pool declared its insolvency, affecting more than 60 Seaport workers. The problems were similar to those felt in 2009. In an interview to a newspaper 2 , APA’s president stated that “… ETP [the Dockers Pool] does not have sufficient revenues to cover the expenses. In 2009 there was already a strike due to these problems…”. The 2 Diário Económico, 15 December 2011 42 Union reacted by issuing a pre-warning for strike dated for the 24th and 29th December. This warning threatened to spread to other Portuguese seaports, and the presidents of the five biggest Portuguese port communities issued a joint communication were they alerted for the “situation of imminent rupture in national ports” 3 . They also alerted to the serious consequences that a paralysis of the seaports might have on the Portuguese economy. In a comment to the Portuguese press 4 , APA’s president of the board considered that this strike was “unacceptable and [would] only contribute to worsen the situation of the Port”. In an interview to a newspaper 5 the vice president of the Confederation of Maritime and Port Unions considered that the stop would have a serious impact on exports. He also claimed that “it will affect the deadlines and the confidence of customers who may switch to other ports causing [Portugal] to lose competitiveness”. Several paralyses occurred in Port operations, involving different actors. These strikes not only resulted in financial losses for the Seaport and several other entities, but also had a negative impact on the IC of the Seaport, namely regarding its image, which was the main concern for the president of IPTM (for ‘Instituto Portuário e dos Transportes Marítimos’) in an interview given to one of the most important Portuguese economic newspapers 6 . Also according to the Executive Director of the association of shipping agents “the worst is that a port that starts to have strikes loses ships and cannot persuade the ship-owners to use Portugal as a scale” 7 . Once again we can infer from these statements that strikes deteriorated the Seaport’s relational capital. According to an APA’s Business Development Manager: 3 Diário Económico, 15 December 2011 4 Ionline, 24 December 2011 5 Dinheirovivo, 9 January 2012 6 Jornal de Negócios, 2 October 2012 7 Ionline, 10 January 2012 43 “[The Seaport] will take a lot of time to recover his image after all this”. The strikes also had negative consequences for the several organisations within the Seaport. They were also suffering, with their own logistic procedures being affected. Several processes had to be changed in order to respond to the contingency of not having the full workforce at disposal. According to the president of one of the biggest Portuguese transport firms “the strike is jeopardising the deadlines” and he was absolutely certain “that many companies will lose orders” 8 . Also, perishable products were being diverted to Spanish ports. Thus, evidence collected suggested that, at an individual level, there was a deterioration of IC, namely in terms of structural and relational capital. 4.3. The Environmental Management System In September 2001, APA implemented an Environmental Management System (EMS), thus investing in IC. Given that APA’s goals are linked with the Seaport’s goals, APA tried to change not only its own environmental culture but all the Seaport culture. Indeed, APA has made several commitments in its environmental management manuals in order to sensitise and involve the port community in adopting good environmental management practices. This means that APA also had a collective goal, i.e. to increase the IC of the whole Seaport. This Environmental Management System should thus be regarded as an investment in structural capital not only for APA, but at the same time for the collective, aiming to create value for the whole Seaport. Thus, we also consider the EMS as an investment in “structural capital” for the whole Seaport: this action increased the CIC. 8 Jornal de Negócios, 2 October 2012 50 that maritime operators’ behaviours can affect other actors’ strategic decisions by being part of a cooperative network in the same business. To produce collective knowledge in a meta-organisation (and consequently CIC), it is critical the way firms work together, how their tasks interrelate and how their knowledge is integrated in order to create value and competitive advantage for the meta-organisation (Kianto, 2007). Coordination of these firms’ knowledge is thus crucial, as well as the presence of a common goal and a shared identity, in order to improve communication and learning. On the other hand, the case study provides strong evidence regarding the interconnectedness between the metaorganisation’s and its members’ IC. For instance, “The new business unit” illustrates how the Seaport’s CIC (specifically its reputation) increased as a consequence of one of its members’ investment in a new brand (i.e. in IIC). It also illustrates how APA, by creating CIC (namely relational capital), increased the operator’s IIC. This IC micro-meso link is supported by Nielsen and Dane-Nielsen (2010), who argue that collaboration between entities can be seen as the means to transform knowledge into emergent proprieties at a higher level of analysis and also that higher level phenomena may have downwardly causal effects on lower level processes. The interconnection between ICs at different levels of analysis is also portrayed in “the strikes” illustration, although with a different (and negative) collective outcome. CIC decreased as a consequence of the actions of a particular actor – the Union. By defending their associates’ interests, the Union was itself increasing its reputation towards its main stakeholders – the stevedores – thus developing its own IIC. However, as time went by, financial and intangible negative consequences arose for both individual members and for the meta-organisation as a whole. Solitander (2011) offers an example in which organisations developed its IC even at the expenses of the collective: she considers that although flows of intellectual capital aiming to protect knowledge can be considered an asset for the organisation (as it prevents the transmission of valuable 51 knowledge), they also may be considered as liabilities on a societal level. This reinforces our claim that the concept of Intellectual Liabilities not only can be seen from the perspective of an individual firm, but also from a ‘meso’ or macro-level perspective. The case study also captures the importance of assessing IC in a longitudinal stance. Time is crucial to comprehend changes in IC (Giuliani, 2015). This is portrayed in the “new business unit” illustration, which provides evidence of both IC creation and deterioration over time. On the one hand, iterative collaborative processes between the Seaport and the port operator eventually led to an improved IIC and CIC. On the other hand, there is also evidence that, from a dynamic perspective, negative consequences may also emerge from IC (Giuliani, 2015). Although CIC grew due to this collaboration, a collective liability emerged over time as a consequence of the individual investment. Garcia-Parra et al.’s (2009) definition of IL neatly fits this ‘meta-organisational’ approach: the non-fulfilment (by the Seaport) of non-monetary obligations (the seaport’s clients expected a much higher service level due to the dimension of the project) negatively impacted the meta-organisation’s relationship with its customers. “The strikes” illustration also captured this phenomenon. Indeed, there were changes as time went by: the actions of the Union eventually brought about negative impacts for itself. Its reputation decreased at the eyes of several actors, and its IIC suffered. Initially the Union pursued its own interests at the expense of CIC, but over time this fact had negative consequences for that member. A MotB agrees with this rational, by stating that: “Today [2013], my opinion is that [the strike] destroyed [IC for the Union], but if we had this meeting at the time [2011], probably [its IC] was increasing”. Both this “temporal” perspective of IC and the micro-meso link proposed by Nilsen and Dane-Nielsen (2010) are present in the “environmental management system” 52 illustration. This illustration depicts how individual ILs gave place to IAs and how individual firms saw its IC raising as a consequence of an increase in the CIC. In a dynamic and longitudinal perspective, individual ILs (bad procedures) were leading to collective ILs (seaport’s bad environmental reputation). These collective ILs were then mitigated by the Seaport (represented by the APA) through the creation of a Collective Intellectual Asset – the EMS: organisations’ IIC increased through the development of new and better environmental procedures (in response to the annual auditing) and also through the development of new competencies as a result of collective training. Over time, the Seaport CIC (namely its environmental reputation) increased as result of the development of a collective environmental consciousness. Finally, the “IT system” illustration addresses the issue that although collaboration is crucial to develop IC through knowledge transfer, it is not always easy to attain. Although knowledge transfer is important to develop innovative capacities (Nieves and Osorio, 2013), the resistance of the Customs to adopt a new procedure – the electronic cargo manifest – can be seen as a resistance to change, which is a source of limiting an actor’s capacity of absorbing knowledge (Nieves and Osorio, 2013). This illustration also leads to a conclusion similar to previous ones: the relationship between IIC and CIC is dynamic. The results of our case study allowed us to reflect upon IC at the metaorganisational level. A meta-organisation’s CIC appears as a function of both individual and collective IC dimensions: the three traditional IC dimensions (human, structural and relational) when referring to the individual organisations that form the meta-organisation and two collective dimensions, which we label “Collective Structural Capital” (CSC) and “Collective Relational Capital” (CRC). Because we see the meta-organisation as an organisation per se, both these concepts were adapted from the ones applied at a ‘micro’ 53 level. On the one hand, CSC includes systems, networks, culture and values, and elements of intellectual property, pertaining to the meta-organisation. On the other hand CRC refers to the relationships between the meta-organisation and its stakeholders. Although acknowledging the importance of the human capital in this context, we not contemplate the existence of a ‘collective human capital’. Instead, we argue that the human capital “belongs” to the very interdependent individual firms that compose the metaorganisation’s network. In a meta-organisation, collaboration (or non-collaboration) may occur at two different levels: between the meta-organisation and its actors and also between the network’s actors. Although acknowledging that the meta-organisation’ CSC can encompass the relationships between the meta-organisation and its members, we propose that the meta-organisation’s CRC should be further divided into two dimensions: one regarding the relationships between the meta-organisation and its external actors (e.g. the population) and the other between the meta-organisation and its internal actors. We call them ‘Collective External Relational Capital’ and ‘Collective Internal Relational Capital’, respectively. An individual member’s IIC is a function of its Human, Structural and Relational Capital, as well as the above collective dimensions. A framework, in which these dimensions and effects are articulated, is presented in Figure 2.2. 54 Figure 2.2 – IC creation and deterioration in a meta-organisation We found that the above individual and collective dimensions are strongly interrelated, which means that members’ investment in the individual dimensions of IC may have a positive (or negative) effect on the meta-organisation’s CIC. On the other hand, ‘collective’ investments may also have different impacts on members’ IIC. We found that the creation or deterioration of IC by an individual member may lead to the development or the deterioration of the collective IC, and that the relationship between both levels may be less straightforward. Firstly, the creation of IC by individual organisations may lead to the emergence of a CIL. Secondly, increases or decreases of CIC may have distinct impacts at the individual level. This reinforces our claim that the concept of IL can also be seen from a ‘meso’ or macro-level perspective. CIC CRC CSC External CRC Internal CRC IIC HC SC RC 55 6. Conclusions This essay addresses an important gap in IC literature: the processes of IC creation and deterioration in meta-organisations and, specifically, the relationship between IC at a ‘micro’ and ‘meso’ levels of analysis. Its objective has been also to comprehend those relationships from a longitudinal perspective. A case study conducted in the Portuguese Seaport of Aveiro provided a set of illustrations depicting the interdependencies between a meta-organisation and its members, which allowed us to better comprehend the importance of assessing IC at both these levels. We suggest that in such settings two types of IC must be distinguished: the CIC pertaining to the meta-organisation and the IIC of its members. We also argue that the traditional models on which most ‘macro’ and ‘meso’ IC models are built from, do not fit in this type of setting which we see as an organisation per se. In a more dynamic stance, results suggest that relationships between IIC and CIC develop and evolve throughout time. There are situations whereby IC may be created or even deteriorated at both individual and collective levels of analysis in an interdependent way as time goes by. In the “strikes” illustration, for instance, we gathered evidence suggesting that individual organisations may try to increase their own IC at the expense of the collective, but it may well be the case that this results in an individual liability for those organisations. A contrario, there may be instances of organisations incurring in intellectual liabilities when they prioritise collective interests, but in the medium and long term the increase in CIC may translate into individual assets for the same organisations. In general, this essay contributes to the literature by showing that although a metaorganisation is composed by individual organisations, there are CIC dimensions that go beyond the individual ones. Hence, the IC of a meta-organisation is different from the sum of the ICs of the individual organisations composing it. Also, although both IIC and 56 CIC may be assessed separately, one has to be aware of the interrelationship between the ‘individual’ and ‘collective’ IC dimensions. Our arguments are not entirely in line with those of Nielsen and Dane-Nielsen (2010), who suggest that the CIC is greater than the sum of individual knowledge. This may be true in some situations. However, there may be cases in which increases of the IIC will not necessarily lead to an increase of the CIC. CIL may emerge from individual organisations’ investment in their own intellectual capital. In such circumstances, the CIC may become smaller than the sum of IIC. Despite the validity of the interpretations provided in the context of the case study, generalisation to other situations should only be conducted in a theoretically framed manner. In this essay, a seaport is conceptualised as a meta-organisation, which has a coordinator – usually in the form of a port authority – that strives to ensure the attainment of collective goals, but characterised by the lack of a formal authority towards several members (within a port, both private and public organisations coexist). From a managerial perspective this coordinator is likely to bear in mind the above relationships to perform its role with the objective of increasing CIC. We believe that future literature should seek to develop even further the ‘managerial’ implications, coordinator’s view, of the problem of IC in a metaorganisation. IIC and CIC can be created not only by direct investments in intangibles but also by cooperation or even competition between actors. Liabilities may even emerge as a consequence of different relationships between those actors. Therefore, future research could focus on the impact that different types of relationships may have upon the creation and deterioration of IC within this type of organisation. Specifically, IC literature should address the impact that power balance/imbalance between organisations may have upon the CIC, namely in the case of a meta-organisation, where its coordinator may not be able to make use of a more “coercive” type of power. In the particular case of seaports, it 57 would be very useful for the port authority management to know in which way those relationships may affect the seaport’s IC. Due to their role as port coordinators, port authorities may seek to influence or motivate other actors to create IC, namely by transferring knowledge with each other. Given that several processes of IC creation and deterioration can coexist, it is very important that a port authority can manage these processes in order to increase the seaport’s competitiveness. Thus, future research could be focused on the mechanisms network coordinators can use in order to create CIC – not only directly, but also indirectly, as a result of more or less collaborative (or even conflicting) relationships established throughout the network. Further research should also explore how investments in tangible assets may lead to both individual and collective intellectual assets and/or liabilities (e.g. the creation of a new terminal on a seaport). Finally, it would be important to replicate this study in similar contexts with similar characteristics, namely the possibility of distinguish the whole’s CIC from individual members’ IIC and the coexistence of public and private actors possessing different levels of power. 58 Chapter 3 – A Relational Approach to the Creation and Deterioration of Intellectual Capital in a Meta-Organisation Abstract With this essay we address several gaps in the literature regarding Intellectual Capital (IC). Although the study of IC in ‘macro’ level units such as nations or regions has grown in the last few years, there are still underexplored empirical contexts. That is the case of seaports, that we conceptualise as meta-organisations with generic goals of economic development for themselves and for regions where they are located. A seaport can be conceptualised as an organisation per se, although one composed of several organisations connected by interdependent relationships and, typically, with no formal hierarchy. The complexity of the interactions between the various actors turns the seaport into a very interesting empirical ground for research. Although these actors provide a “collective service” and thus collaboration is critical in order to create value for them, for the seaport and for the client, conflictive behaviours may also emerge. Furthermore, and as long as the authors are aware, the concept of intellectual liability has not been applied to this type of context. Our essay explores the main factors that, from a relational approach, are behind the creation and deterioration of a meta-organisation’s Collective Intellectual Capital, and seeks to understand how these factors are articulated in the production of such effects. This is done through a case study conducted in the Seaport of Aveiro, Portugal. The main conclusion that emerges from this study is that the compatibility/incompatibility of goals and power can be crucial drivers for the creation or deterioration of Collective Intellectual Capital in a seaport context. An integrated framework is presented relating compatibility/incompatibility of goals and power with collaborative and conflictive behaviour in order to create collective intellectual assets or lead to collective intellectual liabilities. This framework depicts both dyadic and more complex relationships i.e. not only relationships established between seaport’s actors but also between them and the meta-organisation. This study contributes to the development of IC research and also provides practitioners with valuable insights, namely those responsible for network coordinator organisations (such as port authorities) who are concerned with the achievement of a meta-organisation’s goals. 59 1. Introduction Organisations’ intangible resources are increasingly seen as important drivers, for some the most important drivers, of organisations’ sustainable competitive advantages (Marti, 2004; Palacios and Galván, 2006) and, as such, have been the object of a vast body of research. Indeed, several authors argue that dependency on traditional tangible resources has been decreasing (Alwis et al., 2003). Those often overlooked resources have been labelled the ‘Intellectual Capital’ (IC) of an organisation. IC is composed of the intangible sources of value related to employees’ capabilities (human capital), the organisations’ resources and processes (structural capital) and the relationships with their stakeholders (relational capital) (Kujansivu, 2008). According to Zabala et al. (2005), relational capital not only encompasses intellectual assets that bring value for the organisation from the relationships with its main stakeholders, but also those intellectual assets which influence the perception of the organisation’s identity. They call the latter ‘Brand Capital’. However, and bar for some studies that have explored the strategic importance of IC from a ‘macro’ and ‘meso’ perspectives such as those of nations, regions or cities (Maditinos et al., 2010; Lin and Edvinsson, 2011; Bounfour and Edvinsson, 2005; Schiuma et al., 2008), most of the research on IC has focused on individual organisations (Guthrie et al., 2012; Tan et al., 2008; Swart, 2006) and there is a paucity of IC research in entities such as inter-organisational networks and meta-organisations. The same can be asserted regarding “the ways in which intellectual capital is created and maintained as a dynamic process” (Pöyhönen and Smedlund, 2004, pp. 351-352). In this essay, we aim to address these gaps by exploring the main factors underlying IC creation and deterioration in the context of a meta-organisation: a seaport. Meta-organisations are “networks of firms or individuals not bound by authority based 66 Seaport’s members may not always show collaborative behaviours. In certain circumstances organisations may adopt conflictive behaviours towards other actors. In this study we consider that conflictive behaviours exist when an individual organisation behaves in such a way that collaboration, as defined previously, is impeded. Our understanding is congruent with the vision of conflict proposed by Bradford et al. (2004, p. 182), who conceptualise it as “the behaviors or feelings of interdependent parties in response to potential or actual obstructions that impede one or more of the parties achieving their goals”. This is a relatively broad definition that includes situations of ‘open’ conflict as well as situations of more passive ‘non-collaboration’. Conflictive behaviours are likely to lead to IC deterioration and to what some authors have termed Intellectual Liabilities – ILs – as opposed to Intellectual Assets – IAs. IC deterioration is a recent theme whose first steps in IC literature have been devoted to individual firms. By following a “balance sheet” logic, Harvey and Lusch (1999) state that in the same way organisations have unrecorded IAs, they may also have unrecorded ILs and thus they should prepare themselves to manage them. Similarly, Giuliani (2013) advanced the intellectual equity concept as the difference between IAs and ILs. ILs may be conceptualised as all “non-monetary obligations related to the stakeholders that the company must fulfil, in order to avoid the depreciation of its intangible assets” (Garcia-Parra et al., 2009, p. 827). This integrated definition has its origins it two different perspectives regarding ILs: as the depreciation of intangible assets (Caddy, 2000; Abeysekera, 2003) and as non-monetary obligations (Garcia-Parra et al., 2009). The first of these two perspectives moves away from the traditional definition of liabilities, trying to identify any potential non-physical source of deterioration of an organisation’s value (Caddy, 2000; Stam, 2009; Garcia-Parra et al., 2009; Giuliani, 2013). Some examples may be given: using intangible assets on a bad idea (good decisions increase IC while bad ones give rise to ILs), loss of key personnel, high 67 employee turnover (which may decrease an organisation’s performance), lack of commitment, lack of competencies or decrease of reputation (which may affect stockholder equity) (Caddy, 2000; Garcia-Parra et al., 2009; Harvey and Lusch, 1999; Giuliani, 2013). The idea of non-monetary obligations, in its turn, involves the nonfulfilment of something expectable such as working conditions, which may cause changes in personnel’s attitudes (Garcia-Parra et al., 2009). Organisations should try to eliminate ILs or to minimise its negative consequences (Caddy, 2000), and it is therefore critical to assess the probability of an IL to emerge (Harvey and Lusch, 1999). In this sense, current ILs should be distinguished from longterm ones, according to the time horizon one considers (Harvey and Lusch, 1999). Regarding certain ILs, we can only assess its impact after a large number of years (Harvey and Lusch, 1999). Indeed, Giuliani (2015) argues that time is a critical factor to better comprehend the emergence of intellectual liabilities as a consequence of investments in IC. Furthermore, the probability of occurrence may be different as well as its economic impact (Harvey and Lusch, 1999). A seaport is, as we saw, composed of several members relating with each other through different connections (formal or informal) and flows (such as information), in a setting where two types of goal coexist: each member’s own goals and the network-level goals which can only be achieved if members work together towards them (Ziggers et al., 2010; Gagalyuk et al., 2010). Although members of a network can share common goals, they also have their individual ones and compatibility of members’ goals is needed in order to get collaboration in a business (Gulati et al., 2005; Costa and Cunha, 2010; Sheth and Parvatiyar, 1992). Collaboration is not always easy to attain, and organisations’ goals may even be incompatible. 68 In general, the literature seems to suggest that, at a meta-organisational level, Collective Intellectual Assets (CIA) may be created or Collective Intellectual Liabilities (CIL) may emerge as a consequence of collaborative or conflictive behaviours, respectively. According to Kaufmann and Roessing (2005, p. 237), interests may be in conflict when “the parties’ goals are incompatible”. Whereas conflictive behaviours are likely to emerge when goals are incompatible, collaborative behaviours are likely to occur when goals are similar (Hudson et al., 1999) and thus compatible. The specificity of the setting we are studying leads us to note that an incompatibility between individual organisations’ goals and the shared common goals (the meta-organisation goals) may also occur. These ideas form a basic theoretical framework, presented in figure 3.1, which constitutes the basis for our analysis in subsequent sections. Figure 3.1 – An IC relational framework 3. The case study 3.1. Methodological note Since we are studying dynamic processes, about which there is a lack of understanding, in a complex and atypical organisation, the case study is an appropriate Compatibility of Goals Incompatibility of Goals Collaborative Behaviours Conflictive Behaviours CIA CIL 69 method of research (Mills et al., 2010). Specifically, the case study is a suitable method to develop an understanding of the factors and processes behind IC creation and deterioration on a seaport. On the one hand, we study a contemporary and complex phenomenon within its real-life context (Yin, 2009). On the other hand, the seaport provides us with a unique environment due to its complexity as an organisation composed by other organisations, each of one having their own individual goals and different levels of power, but connected by interdependency relationships. Hence, we developed an indepth single case study. This type of case study allows to better understand the peculiarities and typical characteristics of the setting under research (Dyer and Wilkins, 1991). Furthermore, we focused on the network of relationships rather than on a specific actor (Joia and Malheiros, 2009). Although we are studying the relationships between several Seaport’s members, it is our aim to understand the outcomes of such relationships (in terms of IC) for the whole meta-organisation. Therefore, both dyadic and more complex relationships are analysed in this study. Data was collected between April 2010 and September 2014. In order to understand what factors are behind the creation and deterioration of IC from a relational point of view, we used multiple sources which included exploratory discussions and interviews with several members of the Port Authority, documentary evidence and also direct observation. Notes were taken in every discussion and interview. Besides, all semistructured interviews were recorded, with the most important parts being transcribed. Between 2010 and 2013 we conducted several exploratory discussions and semistructured interviews with one member of the Port Authority’s Board of Directors (MotB). This interviewee gave a fundamental contribution to this study due to the knowledge he had about several important events that occurred or were occurring in the Seaport. We also conducted interviews with an APA’s Business Development Manager 70 (BDM), an APA’s IT System Manager (ITsM) and an APA’s Responsible for the Environmental Area (RftE). Finally, in 2014 we carried out two more semi-structured interviews in order to precise some issues concerning our illustrations: one with the MotB and the other with the ITsM (with a length of 30 minutes each). In a first stage (2010 – January 2012) we analysed the empirical context, identifying the types of firms that compose the Seaport and how they relate with each other. During this period we carried out four exploratory discussions and conducted two semi-structured interviews with a MotB. During this stage, this interviewee provided us with information not only about the Seaport and its internal processes but, crucially, about the APA’s perception regarding several relationships between Seaport’s members. These discussions and interviews had an approximate length of 90 minutes. Along with the literature review, they suggested that members of the Seaport have different goals. They also suggested that although there is a high level of interdependency between several of these members, they sometimes fail to adopt a collaborative behaviour. These meetings allowed us to identify three episodes that, due to their complexity and richness, were deemed appropriate to explore the main factors behind the types of relationships depicted in the framework represented in figure 3.1. In a second stage (2012-2013) the four additional interviews with this MotB were focused on these three episodes, since he demonstrated a deep and clear knowledge about the particularities of each episode in a longitudinal way. These interviews allowed us to gain a deeper understanding of the reasons for the adoption, by the Seaport’s members, of collaborative or conflictive behaviours, and the impact of these behaviours on the Seaport’s CIC. We conducted four semi-structured interviews with the MotB (with an approximate length of 75 minutes), in which those specific episodes were a major part of the discussion. These interviews were complemented and triangulated with a semi- 71 structured interview with a Business Development Manager (BDM) in June 2012, and another two interviews (in June 2012 and February 2013) with an ITsM. The semistructured interview with the Business Development Manager (BDM) had a length of approximately 2 hours. The interviews with the ITsM had lasted for about 30 minutes (the first one) and 2 hours (the second one). The BDM was selected due to the fact that he had a general knowledge about all the three events we chose to analyse. Besides, he was strongly involved in the Seaport’s promotion. The ITsM, who is also a regular collaborator of the “Portuguese Ports Association” portal, provided us with detailed and rich information about not only the technical details of the Seaport’s IT System (one of the selected episodes), and also about the main developments that had occurred since its creation. Documentary evidence and other records were critical for our study. This type of evidence provided us with information regarding the Seaport’s collective goals and regarding several members’ individual goals. It also provided us with information on the relationships established between APA and other Seaport’s members, and those established between some of those other members. Some documents were collected within the APA’s headquarters between June and August 2012 and included emails, faxes, contracts, internal memos and other reports. Those documents were publically available due to the fact that APA is a public and state owned organisation. Furthermore, APA had the documents archived in “physical” folders and organised chronologically according to the subject or the Seaport’s member, something that was very helpful for our analysis. It allowed us a faster access to relevant documents. Other documents such as the Strategic Plan, sustainability reports or annual reports and accounts were also publically available and could be found online. In particular, the analysis of the Strategic Plan was very important to this study, since this Plan described in exhaustive and systematic fashion the collective goals of the Meta-Organisation under study. This Strategic Plan 72 stated not only general, but also specific goals for a 10-year frame. When considering the “Union” episode, external records were crucial, allowing us to get important information about the consequences of the labour conflict in terms of CIC. In fact, there was considerable media coverage of this conflict, something that allowed us to better comprehend the sequence of events and their consequences. Finally, the direct observation method was also used in order to get to know how a seaport works in physical terms. As proposed by Yin (2011), we followed five stages of data analysis: compiling the data, disassembling and reassembling it, and finally interpreting the data and concluding. This process was an iterative one. 3.2. Research site – The Seaport of Aveiro and Aveiro’s Port Authority A seaport can be seen as a functional element in logistics systems delivering value to shippers and other third parties’ service providers (from moving cargo through that seaport) in the value-driven chain, segmenting their customers in terms of a value proposition, and capturing value for themselves and for the chain in which they are embedded in so doing (Robinson, 2002). Such is the case of the Seaport of Aveiro, which is located in Central Portugal, in an inland lagoon called “Ria de Aveiro” (Aveiro Estuary). It includes seven terminals (including an advanced agribulk terminal) and two specialised intermodal logistics areas, and it is an important seaport in the development of Short Sea Shipping. Within this Seaport, several private actors – shipping agents, terminal operating companies or industrial clients – develop their activities along with public ones, such as the Customs office, the marine police or the labour Union. Although there has been a trend for private investment, Portuguese seaports are owned by the state, 73 regulated by a public body and managed by port authorities (Barros, 2003): at stake is the landlord form of management, which is the most common in the EU (Verhoeven, 2009). It involves port authorities that act as ‘facilitators’ in transport chains, working together with various stakeholders to identify and address issues affecting logistics performance (Notteboom and Winkelmans, 2001). Until 1998 the Aveiro’s Port Authority (APA) was a public body. However, this situation changed in that year and since then APA is a legal company whose sole shareholder is the Portuguese State. According to Marques et al. (2011), its role also changed from a regulatory towards a more managerial one, becoming responsible for all actions concerning the Seaport’s economic development. The APA is responsible for the Seaport economic exploration, as well as its preservation and development. The Seaport’s mission is to provide competitive access of goods to regional, national and international markets, promoting the economic development of its region. In Portugal, port authorities have increasingly gained autonomy and competencies to define seaports’ goals, although it is the Portuguese government that formulates the strategic guidelines that they have to follow. In 2005, the APA developed and approved a Strategic Plan (which was revised in 2008) for the Seaport’s next 10 years, defining three main strategic goals: to expand and enhance the hinterland; to fulfil the potential of capacity in reserve; and to extend the range of the Seaport’s services. Several means to achieve this latter objective was identified: the increase of flexibility and productivity of stevedoring operations; the modernization of administrative and customs’ procedures; and the optimization of the functional organisation of the Seaport, as well as the coordination between the several actors within it. Thus, consistently with the literature (see above), overall collective goals for the Seaport were defined by the APA. As a Business Development Manager (BDM) put it: 74 “[The APA] can represent the collective in certain aspects, such as the ones stated in the Strategic Plan”. 3.3. Episode 1: The concession within the Dry Bulk Terminal Port operators are organisations that load and unload cargo from ships and that may also have other responsibilities such as cargo control or warehousing (Marques et al., 2011). They can enhance maritime logistics by offering quick, responsive, flexible and reliable services at a lower price (Lee and Song, 2010). In 2008, an operator and the Seaport of Aveiro, represented by its coordinator – APA – entered into a collaborative agreement (a concession contract) whereby the operator was granted a 20 years license to explore a space in the Dry Bulk Terminal. This specific operator was a private organisation belonging to a sub-holding of a major Portuguese Group. That organisation provided services regarding cargo handling, warehousing, distribution and logistics. It had profitability objectives, aiming to provide better quality and more efficient (i.e. cheaper) services to its customers. The acquiring Group’s objective for this operator was to grow through acquisition of new concessions in Portugal and abroad, and also through diversification of its range of services. The operator thus made a big investment not only in tangible assets but also in the development of its IIC, especially by developing a new brand and creating a new business unit. Also, the concession contract itself may be seen as IIC for the operator. The APA greatly valued this collaboration given its goals of improving the supply of Seaport services and of increasing the Seaport’s competitiveness, as well as its capacity to meet customers’ expectations. Until 2008 there was no operator dealing with agribulk cargo and for the Seaport this was a new business area whose exploration deemed 75 interesting: the investment increased the Seaport’s capacity regarding agribulk goods and overcame important storage limitations. The MotB remembered that this was perceived as an opportunity back then, stating that: “It is a new variable in terms of value proposition for our customers. We didn’t have any facilities with those characteristics”. This collaboration had positive impacts on IC for both the operator and the Seaport as a whole. Regarding the operator, as already mentioned, this investment was in line with its growth objectives. From the Seaport’s perspective, this investment led to the creation of IC through several different ways. The development of a new business within the Seaport required the development of new competencies throughout the MetaOrganisation. In fact, operators are part of a logistics chain, which means that they have to collaborate with other actors within the Seaport. The MotB stressed this fact by stating that: “There was then a new market segment that started to be handled in a different way (…) and an operator cannot act alone (…). [For example] the operator had to train stevedores specifically for that unit”. Several actors had to adjust to the new reality and developed their own competences in order to provide a service to this new operator. Knowledge was being transferred within the Seaport in order to increase performance. CIC had also to be created: the Seaport’s external relational capital was boosted due to an improvement of its image. As a result of the operator’s investment, the Seaport could now offer a new service. Also, the support of one of the biggest Portuguese corporations (which was behind the operator) and the great amount of investment were, to the MotB: 82 arguing that ETP did not charged the real value that should be charged for the concession of the workers. On the other hand, the president of the Association of Stevedores Companies in the Seaport of Aveiro (AEEPA for ‘Associação das Empresas de Estiva do Porto de Aveiro’) replied by arguing that the Union took part in all decisions. These different ETP owners had different goals and behaved in a conflictive way, with serious consequences for the whole Seaport. After several meetings between Dockers Pool’s members, the National Regulator and the Port Authority, no consensus was achieved and the stevedores (represented by its Union) went on a strike that halted the Seaport of Aveiro for a period of three weeks. In December 2011, ETP declared its insolvency triggering another conflict. The problems were the same as in 2009. According to the APA’s Board President 10 “ETP does not have sufficient revenues to cover the expenses. In 2009 there was already a strike due to these problems”. However, in 2011, ETP’s insolvency was seen as part of a wider problem. At this time, there was an ongoing port labour reform - which also involved Dockers Pools’ laws and aimed to reduce expenses in at least 20% and also to decrease the prices payable by companies using Portuguese ports. This reform was one of the Portuguese government priorities, and it was demanded by the Troika’s memorandum (Portugal was under a financial bailout since 2011). According to the vice president of the Confederation of Maritime and Port Unions “the intention behind this initiative from stevedore associations and enterprises was the deregulation and precariousness of all the dock work in the Port of Aveiro”. He argued that “after the insolvency petition, they [port operators] contacted temporary workers to ensure the work” 11 . With the insolvency of 10 Diário Económico, 15 December 2011 11 Exame Expresso, 10 January 2012 83 ETP, stevedores faced a sombre perspective: they were likely to face daily underpaid contracts and lose their job stability. On the 24th December 2011, the Workers’ Union of the Seaport of Aveiro went on strike against the presence in the Seaport of workers not related to the Seaport’s activity. The APA’s Board President commented to the press that the strike would “only contribute to worsen the situation of the Port” 12 . He also claimed that this strike would jeopardise the future of four exporting companies located within the Seaport. Even the vice president of the Confederation of Maritime and Port Unions considered that the impact of the stoppage would be “more serious” on exports: “[the stoppage] will affect the deadlines and the confidence of customers who may switch to another port making us [Portugal] lose competitiveness” 13 . By January 2012, this problem spread out to other Portuguese ports that also went on strike in solidarity with Aveiro’s stevedores, demanding the suspension or withdrawal of ETP’s insolvency process. It should also be noted that by this time the Portuguese government wanted to change Dockers Pool laws, something that was creating a tense environment in the sector. Throughout 2012, no consensus was reached regarding the reform of port labour, and there were several paralyses in the Seaport’s operations, involving different actors. Indeed, in the port sector there were 7 strikes in 2011 representing a loss of 145 days of work, and 14 strikes in 2012 (until October) representing a loss of 295 days of work in most Portuguese seaports, including Aveiro 14 . In November 2012 an insolvency plan for the recovery of ETP was approved, with the two remaining operators voting against it. As a consequence, ETP’s was now 12 Ionline, 24 December 2011 13 Dinheiro Vivo, 9 January 2012 14 Ionline, 27 November 2012 84 composed of an insolvency administrator and also the president of the Seaport of Aveiro’s Labor Union. The two opposing operators refused to be part of that commission, and in 2013 they created a new Dockers Pool (named ‘GPA – Empresa de Trabalho Portuário de Aveiro’) that became ETP’s competitor. 3.6. Theory Development The episodes described above lend support to a basic proposition derived from the literature: collaboration occurs in situations of compatibility of goals and it may lead to the creation of CIC. Episode 1 “the concession within the Dry Bulk Terminal” depicts a case where an operator collaborated with APA as a result of a dyadic compatibility of goals between both parts. The operator made a large investment in order to follow its own economic goals: acquiring the right to conduct new operations, thus diversifying its services. These goals were compatible with the APA’s ones, as reflected in its Strategic Plan: to increase competitiveness by improving the range and quality of Seaport’s services. A similar situation could be found in episode 2 “the IT System”: despite initial concerns regarding the input of data through a new system, the shipping agents perceived the advantages of collaborating with the APA when the IT system was introduced. For instance, several operations such as car travel, phone calls or faxes ceased to exist. As the ITsM put it: “At the time (…) when we presented the software what we had to ensure to shipping agents and Port operators was that, namely, they would save [money]. That was more or less obvious”. The effects of collaboration are portrayed in both illustrations 1 and 2, and are in line with Nooteboom’s (2004) arguments about the importance of collaboration in order 85 to attain collective goals (in this case, common to the Seaport and other members such as the Operator or the Shipping Agents). Shared interests were behind those collaborative behaviours (see McNamara, 2012). In episode 1, both parts acted synergistically in order to promote not only the new Business Unit but also the Seaport. The marketing of a port can be a ‘collective good’ (de Langen, 2004) and APA was involved in promoting (along with the port community) the brand ‘Porto de Aveiro’. Therefore, it was of the best interest of the Seaport to “sell” the new service. As the MotB noted: “Presentations of the Seaport promoted by the Port Authority (...) started to include a presentation of the operator’s new brand in order to create awareness towards the Port brand (…). [On the other hand], when [the operator] sell[s himself] to [its] customers, [he] also sell[s] the Seaport”. By promoting the new service, the Seaport was increasing its “brand capital”, which, according to Zabala et al. (2005) can be considered an important measure of success. In episode 2, collaboration led to the development of new and better procedures. Moreover, episode 1 provided evidence regarding the importance of knowledge transfer to develop IC (see Visser, 2009; Pöyhönen and Smedlund, 2004; Joia and Malheiros, 2009; Lee and Song, 2010). Therefore, and as represented in figure 3.2, these cases suggest that a compatibility of goals between a seaport’s member and the port authority (in a dyadic way) promoted a collaboration between the member and APA, thus leading to the creation of CIC. 86 Figure 3.2 – The effects of a dyadic compatibility of goals over CIC However, a somewhat opposite observation surfaced in our case study: the emergence of a CIL is a possibility even when there is a dyadic relationship of collaboration between both actors. As we saw in episode 1, the non-fulfilment, by the Seaport, of customers’ expectations regarding the level of service (they expected a much higher level of service due to the dimension of the project) led to a depreciation of the relational capital that was developed since 2008. This is in line with IL’s definition proposed by Garcia-Parra et al. (2009). In general, IC creation and deterioration in a meta-organisation are complex phenomena. Issues such as economic restrictions, lack of competences or simply wrong decisions may lead to negative outcomes even in a context of compatibility of goals and collaboration. The latter is probably a necessary condition for the emergence of intellectual assets and for the avoidance of intellectual liabilities, but it is not a sufficient condition for those outcomes: hence the dashed arrow linking ‘Collaborative Behaviours’ and ‘CI asset’ in figure 3.2. A contrario, and considering the different organisations working within the Seaport boundaries as composing a port supply chain – i.e. “a system of people, activities, information, and resources involved in creating a product and then moving it to the customer” (Ketchen et al., 2008, p. 235) – several instances of incompatibility of goals Network Coordinator Network Member Collaborative Behaviours CI Asset Compatibility of Goals 87 are likely to emerge (see, for instance, Ketchen and Hult, 2007). Some actors may try to benefit themselves, such as by free-riding, holding up or leakaging, even if this damages the whole chain in terms of speed, quality, cost and flexibility (Ketchen and Hult, 2007). Episodes 2 and 3 provide us with evidence on the impact that an incompatibility of goals may have on the Seaport’s CIC. Following a stakeholder approach, we see the seaport as a context where stakeholders’ behaviours are driven by their own interests but also where collaboration between them is needed in order to create value for the seaport (Notteboom and Winkelmans, 2002). Indeed, stakeholders can affect each other (Costa and Cunha, 2010). De Langen (2006) considers that besides having a common interest in the seaport which is its economic development, members might as well pursue their own goals. These episodes portray instances where members try to attain their own goals, even at the expense of the collective, similar to what is referred by Notteboom and Winkelmans (2002). They also highlight the moderating effect that power may have in accommodating non-collaborative or conflictive behaviours. In fact, the concept of power has been neglected in literature regarding IC in networks, but it proved decisive in the analysis of our case study. Defining power has been troublesome (Hardy, 1996; Clegg et al., 2006) with several authors proposing different definitions. In this essay we adopt a conceptualisation of power that approaches it in neutral terms (Hardy, 1996), one which views power with its negative (‘power over’) and positive (‘power to’) dimensions (Hardy, 1996; Clegg et al., 2006). Hence, we have adopted Hardy’s (1996, p. S3) definition of power as “force that affects outcomes”. Within a seaport we can find several stakeholders with different levels of power, that can evolve from seaport to seaport or over time (de Langen, 2006). Power is dispersed through its members via the development of dependency relations, i.e. power is 88 distributed according to a path of interdependencies regarding members’ resources and activities. There is power imbalance when there are differences on dependencies between actors (Khoja et al., 2011). Assessing these power imbalances between stakeholders is crucial to understand a port community (Olivier and Slack, 2006). “Power imbalance” is thus an important variable to explain how and why a network takes place and thus issues of power in a seaport should not be neglected when adopting a relational point of view (Olivier and Slack, 2006). Episode 2 “The IT System” portrays two situations regarding the 2005 update: a first one, involving the Customs authority and the ‘electronic cargo manifest’ where an incompatibility of goals led to a lack of collaboration, with negative impacts on IC. APA wanted to include this procedure in its IT system (Gespor) while Customs, which had their own system, were renitent to turn a physical procedure (the use of paper and white stamps) into an electronic one, namely due to security reasons. Crucially, in this situation the APA did not have the power to enforce collaboration. The Customs were an authority, just like APA, and APA could not impose the system to them. Customs had the capacity to restrain choices and actions of the APA. In this case, there was a balance in terms of power due to the high degree of independency of each actor (Customs and APA), something that contributed to the emergence of a CIL. The second situation is the one wherein the shipping agents collaborated with the Seaport, although some resistance emerged during the process. In this case a collective liability did not arise. This was to a great extent due to the power imbalance between APA and those agents: despite the shipping agents’ early reluctance to collaborate, the APA had mandatory power over them, the updates were accepted and CIC was created. To sum up, when an incompatibility of goals between the network coordinator and another member prevails, and there is a power balance between them, a CIL is likely to 89 emerge; when both parties’ goals are incompatible, but the network coordinator performs a power exercise over that member, a Collective Intellectual Asset (CIA) tends to develop. This is depicted in figure 3.3. Figure 3.3 – The effects of a dyadic incompatibility of goals over CIC It should be noted that the view of power implied in this discussion, and in the above definitions, is not necessarily a negative one of forcing the others to do what they otherwise would not do. Such ‘negative’ power was, for a time at least, important in the case of the shipping agents. But it was not sufficient in the case of Customs, wherein the APA had to persuade its counterpart of the mutual positive effects of the changes being proposed: i.e., a more positive or facilitative use of power. Actually, even in the shipping agents case, one in which enforcement power was available, the APA sought to deploy more facilitative dimensions of power by persuading those agents of the advantages of changes being proposed. In general, thus, the APA showed a preference for the exercise of positive power over negative one: this would arguably be expected in the context of a network in which the creation of an overall environment, in a sense a ‘culture’, of Network Coordinator Network Member Conflictive Behaviours CIL Collaborative Behaviours CI Asset Power Balance Power Imbalance Incompatibility of Goals 90 collaboration constitutes an important objective for the network coordinator. This is in line with Hardy (1996), who argues that although traditionally the concept of power has a negative connotation, it can also be approached with a more positive stance, where its exercise allows for the achievement of outcomes by promoting collaboration and preventing the emergence of conflict. While episodes 1 and 2 reveal situations where dyadic relationships (collaborative or conflictive) between a member and APA may affect (positively or negatively) the CIC, episode 3 – “the Union and the labour problems in the Seaport of Aveiro” – reveals a much more complex situation. Here, contextual factors such as the bad economic situation of ETP and its later insolvency process, or the port labour reform, triggered behavioural conflicts between two stakeholders: the port operators and the Union, with a highly negative impact on the whole Seaport. For example, the operators proposed a decrease in the stevedores’ wages and the hiring of temporary workers, in order to reduce costs. This clashed with the interests of the Union. Indeed, and although they were co-owners of the same organisation, the Operators and the Union had different and often conflictive goals. The conflict between these members arose as a consequence of an incompatibility of goals. Examples of operators’ goals are cost reduction, good infrastructures, and low interference with the logistics chain (e.g. safety, security, product quality regulation and Customs procedures). On their hand, stevedores (represented by the Union) aim to maximise employment levels, job security, career opportunities, and wages (de Langen, 2006; Notteboom and Winkelmans, 2002). As we saw, labour unrest emerged in 2009 and persisted throughout 2011 and 2012, though other motives were added up, namely the declaration of ETP’s insolvency and the port labour reform, and several strikes and paralyses took place. From a collective point of view, these behaviours were misaligned with several general goals of the Seaport, 91 such as increasing flexibility and productivity of stevedoring operations, optimising the functional organisation of Seaport operations or optimising the coordination between the various Seaport’s actors. They led to immediate losses: according to APA’s annual reporting, the 3 weeks strike (between 3 and 23 August 2009) resulted in a diversion of cargo to other ports. Perhaps more importantly from the meta-organisation’s point of view, the conflicts between members caused the depreciation of several intangible assets, such as the established procedures and the Seaport’s reputation (which is in line with authors such as Caddy, 2000; Stam, 2009; Garcia-Parra et al., 2009; Giuliani, 2013). Indeed, all those conflicts negatively affected the Seaport image and its relationships with several other entities. For example, after the strike of January 2012 and according to the executive director of the shipping agents association (in an interview to a Portuguese newspaper 15 ) there were not only direct losses, but also “indescribable losses” from “all other indirect operations” that would “spread out throughout the economy”. He added that “the worst is that a seaport that recurrently has strikes loses ships and can’t convince the ship-owners to use Portugal as a scale”. The MotB added that: “The fact that ETP is insolvent destroys intellectual capital for the collective. Customers are much more wary of doing business with the Port of Aveiro when one of the key players is in a major crisis process". The image Portuguese ports (including Aveiro) were giving was also the main worry for the president of IPTM (‘Instituto Portuário e dos Transportes Marítimos’, i.e., 15 Ionline, 10 January 2012 98 Chapter 4 – Intellectual Capital Management and Power Mobilisation in a Meta-Organisation Abstract In this essay we discuss how a network coordinator manages the Collective Intellectual Capital (CIC) of a meta-organisation, in order to promote its creation and prevent its deterioration. Several gaps in Intellectual Capital (IC) literature are thus addressed. IC management has been focused on individual firms rather than on ‘meso’ or ‘macro’ level units, such as networks. Also, there is a paucity on IC literature regarding the management of different dimensions of power and its effects over IC creation. With that purpose we conducted a case study in a seaport, which we conceptualise as a meta-organisation. The seaport provides us with a unique environment due to its complexity as an “organisation” composed by several organisations connected by interdependency relationships. Collaboration between members is, thus, of utmost importance to improve the performance of the whole seaport. However, a seaport is also a setting where actors may possess different goals and different levels of power, which can affect the seaport’s CIC either in positive or negative ways. Consequently, coordination is needed for those dependencies to be managed effectively and the role of a network coordinator – the port authority – is crucial to orient members’ behaviours towards the whole seaport’s goals, which is a potentially complex task. This essay focus on the actions taken by the port authority to develop the seaport’s CIC. We use a lens of analysis based on Hardy’s (1996) framework of power. Evidence collected from several illustrations suggests that the management of actors’ collaboration by the network coordinator is a fundamental task when it aims to develop CIC. Hence, mobilisation of different dimensions of power – in both coercive and non-coercive ways – is needed to promote a higher level of collaboration. Indeed, by mobilising non-coercive dimensions of power, the network coordinator can foster a sense of community within the meta-organisation, grounded in a trust based collective culture that can potentiate collaboration and thus allow the attainment of a more ‘sustainable’ type of CIC. Findings can have very important strategic and managerial implications, namely to provide network coordinators with a better understanding of the consequences of using different and interrelated dimensions of power in order to achieve the meta-organisation’s goals and enhance its performance. 99 1. Introduction IC is considered as a crucial factor for the attainment of organisational success (Lu et al., 2014) and its management is of the utmost importance in a knowledge-based economy, being considered as the main driver of organisation’s value creation (Chang et al., 2008; Lu et al., 2014). Academic discussion has been stressing the strategic importance of leveraging and managing Intellectual Capital (IC) for improving organisational performance (Schiuma and Lerro, 2008). IC management refers to different activities in identifying, measuring, controlling and developing intangible resources in a business (Kujansivu, 2008) and organisations that manage their IC are better able to respond to unanticipated economic and market changes (Tayles et al., 2007). Although most research on IC addresses individual organisations (Lin and Edvinsson, 2011; Tan et al., 2008), there has been a growth of literature regarding the study of IC in ‘meso’ and macro-level units where the role of knowledge resources as source of regional and local development dynamics has been stressed (Pöyhönen and Smedlund, 2004). Despite this trend, we consider that there is still a gap in the literature when referring to certain contexts, such as seaports. A seaport can be characterised as a complex, multi-functional organisation formed by several other organisations, collaborating to provide a common service. Due to its own organisational specificities, and in line with authors like Gulati et al. (2012), we conceptualise the seaport as a metaorganisation (see also chapter 1). In such a context, it is crucial that organisations rely on the IC of others, and collaborate, in order for sustainable competitive advantages to be built (Marti, 2004). However, collaboration to achieve collective goals may not (always) develop spontaneously and thus leader organisations can play a crucial role (de Langen, 2004; de Langen, 2006), since they attempt to orient members’ behaviours towards the whole 100 community’s needs and interests (Provan et al., 2007). In seaports, such leader organisations are usually the Port Authorities (PAs), whose role is thus crucial in the management of the seaport’s Collective IC (CIC). This management is potentially complex, given the likelihood of incompatibility of goals in some situations and also the power balances/imbalances between seaport actors. Grounded on the literature review and on a case study, in this essay we explore how a PA manages the CIC of a seaport. In order to develop the seaport’s CIC, the PA has to make collective investments in IC, but also has to promote collaboration between members and prevent situations of conflict. The essay proceeds, in section 2, with a brief exploration of key concepts of the study: IC, its management and meta-organisations. Then, in section 3, we approach the particular issue of the management of IC in the context of seaports. To do so, we start by defining the concept of, and highlighting the importance of, collaboration in such a context. We then identify the role of the PA and explore the concept of power as key in the way a coordinator manages IC in the seaport. In section 4 we describe and analyse the case study of a specific seaport – the Seaport of Aveiro, in Portugal. Our strategy is to present a set of events that enable us to explain how the PA manages IC in the Seaport: this allows us to develop a theoretical framework that is proposed as a basis for future research on this subject. 2. IC management and meta-organisations In a knowledge driven economy, where knowledge creation and exchange is crucial, the most important assets of many organisations tend to be intangible and thus IC should be regarded as a crucial and distinctive element for an organisation to create value (Roos et al., 2005; Tayles et al., 2007; Labra and Sánchez, 2013). Managers have been 101 faced with new demands that underline the importance of IC management (Tayles et al., 2007), which we define, in line with Roos et al. (2005, p. 42), as “the deployment and management of intellectual capital resources and their transformations (into other intellectual capital resources or into traditional economic resources) to maximize the present value of the organization’s value creation in the eyes of its stakeholders”. An adequate assessment and management of IC carries important advantages for organisations, namely the development of new business models, the improvement of organisational performance and value creation dynamics, the development of knowledge to support the growth of those organisations’ competencies, and the supporting of their governance (Schiuma and Lerro, 2008). IC management models have been developed, allowing for the identification, measurement, management and spread of knowledge (Ramírez et al., 2007; Tan et al., 2008). Several of them consider strategy as the main reference, focusing on the management of IC inputs – human, structural and relational – in order to improve the outputs (Marti, 2004; Ramírez et al., 2007). Human capital refers to employees’ individual knowledge, attributes, attitudes and abilities; structural capital includes systems and networks, cultures and values, and elements of intellectual property; relational capital refers to the relationships with the organisation’s stakeholders (Cañibano et al., 2002; Habersam and Piber, 2003; Roslender and Fincham, 2001; Jacobsen et al., 2005). Most IC management studies focus on value creation regarding individual firms, even though interest for the study of IC in ‘meso’ and macro-level units such as nations, regions, clusters or local production systems has been growing (Pöyhönen and Smedlund, 2004). Indeed, competitiveness and productivity at these levels may be improved through intangible assets and through the adaptation of firms’ business models to those wider settings (Lin and Edvinsson, 2011). Despite this new trend, we consider that there is a 102 gap in IC literature regarding IC management in network contexts, which is perhaps striking, given that, according to authors such as Pöyhönen and Smedlund (2004), most knowledge is developed in such settings. Indeed, knowledge can be developed within or between organisations (Song and Lee, 2012). Other authors note that the adoption of a network level of analysis is especially lacking (Provan et al., 2007). Managing IC in such contexts can reveal itself very complex, especially when the network can be conceptualised as a meta-organisation (see chapter 1). A metaorganisation can be defined in simple terms as an organisation formed by several individual organisations. By working in collaboration with each other as a single team and in a coordinated way, these several organisations can maximise their own performance, as well as the performance of the whole system (Lee and Song, 2010). Collaboration between them facilitates mutual learning and leads to the production and stabilisation of routines by putting members’ knowledge into action, i.e. by creating IC (Pöyhönen and Smedlund, 2004; Lee and Song, 2010). However, network performance (including IC creation) may be limited due to a mix of shared and also firm-level goals, values and experiences (Ketchen and Hult, 2007), with value propositions being developed at both individual and network levels (Ackermann and Eden, 2011). At stake is a coalition of actors following their own interests, where sometimes these actors may choose to act in order to benefit themselves rather than the whole (Ackermann and Eden, 2011). Furthermore, besides having their own interests, these actors also have different sources of influence and different levels of power (de Langen, 2006). According to their degree of power, they may support (or hinder) the meta-organisation’s strategy (Ackermann and Eden, 2011). Finally, their positions may change over time thus increasing the complexity of the relationships they establish (Costa and Cunha, 2010). 103 Hence, within a meta-organisational context, two different types of IC coexist and are interrelated: the individual IC (IIC) of each member and the CIC of the whole. The creation or destruction of IC at one level of analysis does not imply the same effect at the other level (see chapter 2). According to this rationale, the whole (CIC) is different from the sum of its parts. The CIC (at the meta-organisational level) emerges from a process where knowledge at the member level interacts with the environment (Nielsen and DaneNielsen, 2010). As long as we are aware, the extant literature does not refer the development of a management model that integrates both levels of analysis in order to assess how CIC is managed in this type of setting. 3. IC and its management in seaports A seaport is an example of a meta-organisation. Seaports are interesting examples of territorial economic systems encompassing a complex network of activities (Degrassi, 2001; Alderton, 2005). Several interdependent organisations engage in activities that are likely to increase the seaport’s value (Roh et al., 2007). Seaports are formed by public and private organisations, cooperating as a team in order to provide a competitive collective service (Lee and Song, 2010; de Langen, 2004). A seaport can be described as a complex, multi-functional and multi-institutional organisation where actors are connected with each other as suppliers or buyers, providing a maritime logistics service as a coordinated single team in order to create higher value to the final customer/user (Lee and Song, 2010; Bichou and Gray, 2005). Customer satisfaction and loyalty are affected by the logistic capabilities and thus by the quality of the service provided by the entire network (Wu and Chou, 2007). Hence, working together in a cooperative manner can lead maritime operators to a maximisation of the value of the system, fulfilling customer needs 104 (Lee and Song, 2010). The higher is the customers’ satisfaction, the higher is the whole system’s value (Song and Lee, 2012). Seaports should thus be flexible, responsive, adaptable, and act as knowledge centres, distributing information to all the players that participate in its activities in order to evolve from logistics distribution centres (third generation seaports) to transport solution providers (fourth generation), something that requires an efficient application of knowledge (Marlow and Casaca, 2003). Seaports should make the best use of their available tangible resources but also of the intangible ones (which are hard-to-imitate) since their environment is a knowledge driven one (Marlow and Casaca, 2003). Knowledge is one of the assets whose growth is higher when it is shared and thus competitiveness at a ‘meso’ or ‘macro’ levels may well depend on the individual organisations’ capacity to transfer, create and use knowledge, i.e. IC (Tan et al., 2008; Pöyhönen and Smedlund, 2004). By operating in a meta-organisational culture that transcends the firm’s cultures, actors in a seaport should be able to exchange knowledge in an easier fashion (Rao, 1996). The fact that these actors operate under similar regional conditions and contingencies, due to geographic proximity, can be an important factor to facilitate learning interactions. This is so at several levels: the transfer of the tacit knowledge embedded in people, their know-how, skills, practice, and experience, being captured by socialisation (Forsman and Solitander, 2003; Hall and Jacobs, 2010; Pechlaner and Bachinger, 2010; Marti, 2004; Sporleder and Peterson, 2003). When organisations share and co-develop resources and capacities, building long-term resources, they can co-evolve, thus increasing the possibility of obtaining benefits (such as IC) associated with the relationship (Joia and Malheiros, 2009). By exchanging knowledge, seaport’s members can improve their own efficiency but also the performance of the whole seaport (Lee and Song, 2010). Indeed, from a meta-organisational stance, 105 this might promote value creation and a sustainable competitive advantage towards other ports. 3.1. Collaboration According to the collective benefits view, the capital of a collective results from a cohesive structure which helps to achieve the collective goals (Walter et al., 2007). Therefore, a high collaboration between actors, as well as an effective coordination of its activities, is crucial for the competitiveness of a seaport. Within inter-organisational literature there is, however, a lack of consensus when referring to concepts concerning interactions between actors. Cooperation, coordination and collaboration are such an example, with many authors using these concepts interchangeably (McNamara, 2012). However, there are authors that seek to make a distinction, namely between cooperation and collaboration (McNamara, 2012; Ketchen et al., 2008; Polenske, 2004; Gulati et al., 2005). McNamara (2012, p. 391) summarises the distinctions between the three concepts along a continuum by suggesting that: cooperation pertains to “an interaction between participants with capabilities to accomplish organizational goals but chose to work together, within existing structures and policies, to serve individual interests”; coordination is “an interaction between participants in which formal linkages are mobilized because some assistance from others is needed to achieve organizational goals”; and collaboration refers to the “interaction between participants who work together to pursue complex goals based on shared interests and a collective responsibility for interconnected tasks which cannot be accomplished individually”. We consider that in the context of seaports the distinction between cooperation and collaboration, as well as coordination, is perhaps less meaningful. These distinctions 106 are proposed with reference to contexts of organisations that have the possibility of operating independently from the others to achieve their individual goals. At stake are, for instance, business alliances (Sheth and Parvatiyar, 1992), supply chains (Ketchen et al., 2008) or vertical arrangements (Gulati et al., 2005). In a seaport, however, the individual organisations must work together: it is not a matter of choice. Also, although we acknowledge that the definition of coordination may well be suited to relationships between seaport’s members, in this essay our focus is on the port authority and its coordinating role, which we will explore below. Hence, we have chosen to use the term collaboration, although we understand that different levels of collaboration may exist. In fact we recognise that McNamara’s (2012) definition (see above) involves a high degree of collaboration, and our conceptualisation will be slightly different: we will consider that collaboration is not always based on shared interests; and we will envisage collective responsibility as a goal instead of a means to collaborate. Despite its voluntary nature, inter-organisational collaboration needs shared values between actors in order to allow for their functioning as a clan (Rodríguez et al., 2007). Hence, it is more difficult to transfer knowledge between organisations rather than within organisations (Chang et al., 2008). The stronger the collaboration between maritime operators, the more exposed they are to knowledge flows and the bigger the probability for them to proactively share information and knowledge (Lee and Song, 2010). Nevertheless, in a seaport, collaboration may not develop for itself (de Langen, 2006). Consequently, we contend that a seaport may share the dilemmas of traditional supply chains: how to motivate its members to share valuable knowledge, since an organisation tends to keep valuable knowledge for itself; and how to overcome the fact that classic collective action problems may emerge (Sporleder and Peterson, 2003). From a supply chain perspective, actors may try to benefit themselves even if damaging the whole chain in terms of performance 107 (Cabrita and Bontis, 2008; Ketchen and Hult, 2007). Organisations may act in order to achieve their individual benefit, which might lead to an incompatibility of goals and result in collaboration problems (Gulati et al., 2005). Ultimately, their commitment may decrease, thus deteriorating the relationship (Gulati et al., 2012). Indeed, within a seaport setting, actors may have different goals, which may also diverge from the seaport’s ones (de Langen, 2006; Notteboom and Winkelmans, 2002). If on the one hand the economic development pursued by several actors may decrease their commitment to the seaport, on the other hand, at a societal level, problems may arise from stakeholders’ conflict of interests regarding the seaport (Verhoeven, 2010). Some have noted that seaports are becoming mere pawns on a game dominated by major corporations, whose goals are often incompatible with the ones of the PAs (Olivier and Slack, 2006). Seaport stakeholders may try to exert some type of pressure over the seaport (Denktas-Sakar and Karatas-Cetin, 2012). Reasons may be diverse: some actors such as shipping lines or shippers may have their own vested economic interests while community and public stakeholders pursue social and environmental interests (DenktasSakar and Karatas-Cetin, 2012). Hence, although collaboration between actors is needed in order for CIC to be created, in some situations actors may exhibit conflictive behaviours, that is, “behaviors or feelings of interdependent parties in response to potential or actual obstructions that impede one or more of the parties achieving their goals” (Bradford et al., 2004, p. 182), thus damaging that same CIC (see chapter 3). 3.2. The role of the coordinator Our study focus on a network with a public coordinator – a Port Authority (PA) – which we define as an organisation “which whether or not in conjunction with other 114 3.4. Summing up This section has reviewed literature that allows us to theorise on the issues involved in the management of IC in the context of seaports. We started by pointing out that a seaport can be conceptualised as a meta-organisation. In this type of setting, CIC exists alongside IIC, and the transfer of intangible assets between members of the organisation is of order for the creation of CIC to be fostered. This is potentiated by an environment of collaboration – something which is not automatically ensured and might even be hard to attain. The role of a coordinator is, among others, that of promoting such an environment. To do so, several dimensions of power may be mobilised, including those involving the mobilisation of resources, sometimes in coercive manner, but also those that involve the non-coercive promotion of a relational context (of trust) that facilitates the pursuing of collective objectives. 4. The case study – the Seaport of Aveiro The Seaport of Aveiro is a rich setting due to its complexity as an organisation composed of several organisations, each one having their own individual goals and different levels of power but connected by interdependency relationships. With the exception of the largest UK ports, port management in EU continues to be controlled by the public sector, with the landlord management form being the dominant one (Verhoeven, 2009). This model is predominantly applied in the largest continental European ports and may gain further importance in the future, due to reforms in member states (Verhoeven, 2009). The Seaport of Aveiro is a fully state-owned organisation and is regulated by a public body (IPTM, for Instituto Portuário e dos Transportes 115 Marítimos). Seaports located along the Portuguese Atlantic shore are managed by PAs. Although the direct influence of landlord PAs on cargo flows may be limited, they can act as facilitators and catalysts in the logistics chain through the creation of adequate facilities, the development of strategic relationships with other transport nodes and the creation of networks with other ports (Verhoeven, 2009). 4.1. Methodology The case study is a suitable method to develop an understanding of how a PA manages a seaport’s CIC in order to achieve the meta-organisation’s goals. In fact, in this essay we study a contemporary and complex phenomenon within its real-life context (Yin, 2009). The peculiarities and typical characteristics of the context under study can be crucial and single case studies can allow a better understanding of those (Dyer and Wilkins, 1991). Data was collected between April 2010 and September 2014. To understand how the Aveiro’s PA (henceforth, APA) manages IC in the Seaport in order to achieve collective goals, multiple sources of information were used: exploratory discussions and interviews with members of the Port Authority, documentary evidence and also direct observation. In a first stage (2010 – January 2012) we analysed the empirical context and specifically the network of firms operating in the Seaport of Aveiro. Four exploratory discussions and two semi-structured interviews (with an approximate length of 90 minutes) were conducted with an APA’s Member of the Board (MotB). These discussions/interviews allowed us to identify a set of illustrations about how APA 116 manages the complex network of members, all with different goals and different levels of power. In a second stage (2012-2013), four semi-structured interviews were conducted with the same MotB, lasting 75 minutes (approximately). These interviews served to gain a deeper understanding about how the APA manages the CIC of the Seaport, namely by questioning how it promotes a positive collaboration and how it prevents or manages situations of conflict. We also conducted a semi-structured interview with a Business Development Manager (BDM), who had a high involvement with the Port Community Association (see below) since its creation, and possessed a solid general knowledge about several episodes that occurred in the Seaport. This interview lasted 2 hours. Moreover, an unstructured interview (with a length of about 75 minutes) was held with a Responsible for the Environmental Area (RftE). She made a description about how the APA’s environmental system works, and above all she provided important insights about its impact on the behaviour of the Seaport’s members. Finally, two semi-structured interviews (the first one, lasting about 30 minutes, and the second one lasting 2 hours) were conducted with an IT System Manager. All the semi-structured interviews were recorded, with the most important parts being transcribed. Also, we took notes in all discussions and interviews. In 2014 we conducted two additional semi-structured interviews – one with the MotB and the other with the ITsM – in order to precise some events. These interviews had an approximate length of 30 minutes each. Documentary data was crucial for our research. We collected internal documents within APA’s headquarters between June and August 2012. These documents included emails, faxes, contracts, internal memos and several reports. The analysis of the documents regarding the Environmental System (see Appendix 4), which included environmental management manuals and progress reports, were crucial for us to understand its use for the achievement of specific collective goals. Other important documents, such as the Strategic Plan or annual reports and accounts, were analysed. 117 Those documents were publically available due to the fact that APA is a public and stateowned organisation. The fact that the documents were archived in “physical” folders and organised chronologically according to subject or Seaport’s member allowed for faster access. Other records such as newspapers and radio interviews also provided us with important evidence. Finally, direct observation of the workings of the Seaport allowed us to consolidate our understanding on the way operations are conducted in the Seaport. Regarding the analysis of the collected data, Yin’s (2011) five stages were followed. Specifically, the data was compiled, disassembled and finally reassembled. The reassembled data was then interpreted and conclusions were drawn. This process was an iterative one. 4.2. The management of IC by APA As mentioned above, our analysis of the way APA managed IC in the Seaport of Aveiro was based on a series of illustrations that allows us to describe, and theorise on, IC management in the context of seaports. Our approach is to structure the description and analysis of the case on the basis of the theoretical insights outlined in section 3. 4.2.1. Collaboration as the source of sustainable IC One observation could be immediately made regarding the way APA manages IC in the Seaport: direct initiatives aimed at fostering IC were promoted. Indeed, the APA mobilised its resources to conduct training actions and to provide information and knowledge both internal and directed to other members of the network, something that 118 may be seen as an example of developing human capital. It also implemented collective instruments such as information systems, quality systems, or an environmental system, that may be seen as examples of structural capital. And it put obvious care in establishing good relationships with external constituencies, such as large industrial customers, municipalities and local communities, thus enhancing the Seaport’s relational capital. However, it was clear within APA that these initiatives were insufficient: there was a strong perception that the APA had to count on the collaboration of the Seaport’s various organisations in order for IC to be created and its destruction avoided. As the Business Development Manager (BDM) put it: “The many institutions that are part of the maritime transportation and of a Port also began to realise that by working together, and not backto-back, things could be improved”. The collaboration of the members of the Seaport of Aveiro was seen as key for several reasons. Firstly, the very direct initiatives of IC creation promoted by APA depend on that collaboration. For instance, APA’s information system would only be enacted in the Seaport and produce positive effects on IC if relevant members accepted those systems and acted in conformity with their prerequisites. Secondly, collaboration may in itself lead to IC creation: e.g., exchanges of information and knowledge between members will have positive effects on the seaport’s IC. The APA directly created such effects, by making its own knowledge available to others, but horizontal exchanges of information and knowledge (i.e., between other members) are crucial. Thirdly, and a contrario, the lack of collaboration may have detrimental effects on the seaport’s IC if, for example, it implies a break in the service provided and a reputational loss. In the Seaport of Aveiro, labour problems faced by the Seaport in recent years are a clear effect of this. The objective for APA is thus to ensure collaboration (towards itself and also between members) and to ensure that this occurs in a sustainable manner. Clearly, the strategy 119 deployed by APA, and the way it mobilised different dimensions of power, had this objective in mind. To this issue we now turn. 4.2.2. The four dimensions of power in action We found evidence that the APA, in trying to enhance the IC in the Seaport, relied on resources, managed processes and attempted to shape, or create conditions for the shaping, of meanings of the network’s members. These movements were tactical, in that specific problems were solved and direct objectives of IC creation (or prevention of IC destruction) were pursued, but also strategic, in that the promotion of an overall environment of collaboration – in a sense shaping the power of the system – was also an objective for the APA. Several examples of the APA’s ‘power over resources’ were collected. Some such resources were linked to the fact that, within the Seaport of Aveiro, several organisations work under licences or concessions agreements. Licences are short term authorisations granted by the APA – the representative of the owner of capital – and some members might fear that their actions might have negative consequences regarding their attribution. In short, the ability to sanction and the authority attached to it is a key resource available to a network coordinator with APA’s characteristics. Importantly, the very fear of sanctions enhances the ability of the APA to enact direct measures that are conducive to IC enhancement. For instance, in 2001 the APA implemented an Environmental Management System (EMS) for the whole Seaport, in order to improve the Seaport’s (poor, at the time) environmental reputation. Environmental procedures, however, could not be directly imposed on other members. In any case, and bar for some minor and short 120 episodes of resistance, virtually all relevant actors conformed to those procedures, and the EMS was successfully implemented. As the MotB put it: “The president of the board wanted [to] expand [the EMS] to other companies, although he knew from the start that they would not be forced to do what we recommended them to do. But in practice they did. Why? I think it was for fear of reprisals by the APA (...)”. The whole process of implementation of the IT System also provides evidence of the power over resources. Seaport of Aveiro’s IT system (Gespor) was firstly used in 1997, replacing paper-based procedures. The new system was relatively well accepted, but a major challenge emerged in 2005, when a major update was conducted, and a web environment was introduced. Shipping agents demonstrated some reservations to the new system, and some initial resistance was observed, due mostly to confidentiality concerns. These actors were afraid that others could get information that would allow them to steal their customers. However, the APA’s power to sanction was again relevant. According to the MotB: “APA had a mandatory power over the shipping agents when approaching them individually”. Also, we could find here a patent example of expertise power: the update was carefully prepared; it was introduced with some important upgrades towards previous versions, especially regarding user interface (which was considered a weakness in the ‘windows version update’); and training was thoroughly conducted. Besides, in previous years APA had gained a reputation of accessibility and competence regarding the solving of problems with the information system, as the following statement by the IT Systems Manager reflects: 121 “[Throughout the years before 2005 and namely during the ‘windows version update’] APA’s people related to IT systems almost became employees of the port community. If a computer was blocking, an APA’s employee was detached to solve the problem”. This reputation greatly enhanced the ability of APA to bring about desired behaviours when the update was introduced in 2005: acceptance of the ‘new’ system by shipping agents was eventually ensured. In other occasions the APA also used an informational type of power over resources. Again, the EMS implementation provides an example of this. According to the RftE, the APA often had to provide information to several actors, namely regarding the law on environmental issues. Through those processes, knowledge was being transferred and IC being created, both directly (an increased awareness on environmental issues was introduced) and indirectly (the knowledge transfers facilitated, or even allowed for, the implementation of the EMS). The previous examples involve situations in which the APA mobilised resources in order to influence decisions and behaviours in specific initiatives of IC creation: the EMS or the IT system. Besides this, the APA’s mobilisation of resources was also linked to the development of a context capable of facilitating the creation (and the nondestruction) of IC: the mobilisation of resources for the preparation and discussion of a new Strategic Plan for the Seaport, or for the creation of a Port Community Association, are obvious examples of this. In short, the movement into the ‘less visible’ dimensions of power – those involving the power of processes and the power of meanings – required the access of APA to resources such as reputational or financial ones, or those related to APA’s authority. 122 Movements of the APA into the less visible dimensions of power were obviously linked to situations in which the mobilisation of resources was not sufficient to achieve desired outcomes, or when these resources were scarce or even unavailable. One example of power of processes emerged during the 2005 upgrade of the IT system in the Seaport. An important actor for the IT system to be updated and streamlined was the Customs. However, APA had no formal authority over Customs, and the initial attitude of Customs was one of refusal to collaborate – due to security concerns. APA had then to promote a compatibility of goals by making use of non-coercive dimensions of power. The APA proposed and successfully introduced a working group, in the form of a committee, including those involved in the implementation of the IT system. Customs were, of course, one of the members of this committee. In it, issues related with the system were discussed and awareness was raised on the advantages of the system and on the inefficiencies caused by work duplication. In time, the participation of Customs in such a committee was an important basis for its initial reservations to be dropped. According to the MotB we interviewed: "Customs went from a position of resistance to a position of cooperation and acceptance of the system. Why? Because it was created a working group with elements of Customs, port authorities and shipping agents in order to change the IT system and approximate it towards the needs of Customs". The deployment of ‘power over processes’ was also evident in one of the main problems faced by the Seaport of Aveiro in recent years: the recurrent labour disputes that have surfaced, to some extent as a consequence of institutional arrangements regarding Ports’ workforces and, also, as a consequence of the growing problems with the Portuguese economy. The main labour problem in the Seaport of Aveiro concerns its Dockers Pool. This is a pool of stevedores that provides the workers necessary for port 123 operators to conduct operations in the Seaport. Up until recently, there was a situation of exclusivity: port operators were obliged to draw on this workforce. The Dockers Pool in Aveiro is an organisation owned by major port operators and by the stevedores’ Union, under the coordination of a National Regulator, namely regarding service prices. Since 2001, several labour problems and strikes took place because of the economic problems with the Dockers Pool. Indeed, recurrent losses were registered, and three basic alternatives were on the table: to lower the size or wages of the workforce; to rise prices; or to rely on the port operators to support losses. Not surprisingly, conflicts between the Union and port operators emerged, and the reputation of the Seaport – key to its IC – has been at stake in recent years. APA lacked the resources to directly intervene, since – once again – it does not possess any formal authority over both the Union and the port operators. When the equilibrium that had been achieved in the 1990s was broken in about 2001, the APA moved into less visible dimensions of power. One important example of the ‘power over processes’ regarded the involvement of APA in the fixation of prices of the stevedoring service: until the early 2000s, these were fixed, on an annual basis, by the Dockers Pool under the tutelage of the National Regulator, with no intervention by APA. In the early 2000s, the APA proposed to the National Regulator that it was involved in this process, and this latter institution agreed: from then on, price proposals would be sent to APA, and APA would have to analyse and provide an opinion. Besides, the APA suggested that an annual meeting was established with the Dockers Pool, in order for these issues to be discussed prior to the sending of an opinion to the Regulator. Importantly, exchanges of information regarding financial issues were conducted in these meetings. In general, thus, the APA was able to change the whole process through which price negotiations were conducted, and forced the parties to share and discuss the issues involved. 130 We soon understood, however, that the role of APA in managing the Seaport of Aveiro is pretty much in line with the literature reviewed (e.g. Notteboom and Winkelmans, 2001; Marques et al., 2011; Verhoeven, 2010; Ziggers et al., 2010): we found strong evidence on the attempts by APA to stimulate collaboration between members of the Seaport, to establish ties and dependencies – of a formal and of a social kind – between those members, thus fostering an adequate relational environment. On the one hand, and in line with authors such as Lee and Song (2010) or Pöyhönen and Smedlund (2004), collaboration was seen as necessary to ensure the success of APA’s direct initiatives of CIC creation: an IT system, for instance, would not be successfully implemented without full collaboration of all relevant members. On the other hand, collaboration was envisaged as leading to a sharing of knowledge and, generally, to the ‘indirect’ creation of CIC throughout the Seaport. A seaport is an example of a context where inter-organisational relationships are dependent on power, values and members’ interests (Rodríguez et al., 2007). It was evidenced in our case study that a port authority such as APA has to balance different interests when making decisions, something that constitutes a difficult task (Notteboom and Winkelmans, 2002). From a relational point of view, our main objective was to explore how APA exerts its power in order to achieve its goals, specifically regarding the fostering of collaboration and the creation of CIC. Hardy’s (1996) model was clearly applicable: we found several instances of movements into the several dimensions of power – resources, processes and meanings. Interestingly, our evidence points to the fact that these dimensions cannot be seen as independent or insulated from each other: resources must be available for the management of processes to be possible, and adequate processes may facilitate the management of meanings, which in turn may improve the resources available to actors such as the APA. 131 To ensure collaboration, the APA had to assess the relative powers of the parties involved in the Seaport, and, based on such assessments, to conduct adequate strategies involving the above dimensions of power. In some instances, the APA may be faced with situations of power balance. In the case of Customs, or also in the Dockers Pool crises, the APA had to deal with organisations that were ‘its equals’. These were situations in which resources to coerce other parties were not available. Here, movements into other dimensions of power – of processes and of meanings – were conducted and, at least in the illustrations we provided, collaboration was eventually achieved. Informal mechanisms such as embeddedness or identification allowed for the overcoming of collaboration problems (Gulati et al., 2005). In other instances, of course, there were situations of power imbalance: i.e., the Port Authority could assume a position of superior power towards other actors within the Seaport. When this was the case (e.g. shipping agents in the IT system illustration; or the companies involved in the EMS implementation), coercive resources were available for the APA to ‘force’ collaboration. In Gulati et al.’s (2005) terms, collaboration problems were surpassed by formal mechanisms such as contracts, monitoring or even the deployment of sanctions. However, (see above) our conceptualisation of collaboration involves different degrees and, although coercive power might be useful to provide ‘quick fixes’ to problems, it may have negative consequences regarding relationships. As Hardy (1996) put it, (coercive) power based on resources is a “task oriented” one and “the excessive use of coercion may engender a backlash in the people over whom power is exercised” (p. 7). Arguably, this is especially important when it comes to the management of CIC: intangible assets such as knowledge are more difficult to control than tangible ones, and thus resistance may be more complex to detect and overcome. 132 This much seemed to be recognised by APA in our case study: in the EMS and the IT system illustrations, for instance, the APA mobilised and deployed its resources in coercive manner when it had the possibility to do so. However, it was noticed that the APA kept mobilising the other dimensions of power, namely the power of processes and the power of meanings, in order to legitimise and consolidate those systems. Indeed, in our study we found that the APA made use of non-coercive types of power in order to foster trust between Seaport’s members and a collective culture based on shared interests and a high level of commitment and responsibility. This collective culture leads to a high level of collaboration and knowledge exchange, and thus to a more “sustainable” type of CIC. It was because of this that the APA preferred to make use of power from a more positive stance, namely by managing processes and also by managing meanings in order to legitimise its actions at the eyes of the other members, even in situations of power imbalance towards other parties. The effective communication of the Strategic Plan and the several fora in which this plan was discussed, as well as the intensive use of the PCA to legitimise APA’s intentions and prevent conflicts, are examples of that. This study supports de Langen’s (2004) claim that port authorities should act as cluster or “community” managers, i.e., coordinators that try to maintain or improve good relationships between different stakeholders pursuing different individual goals, in order to promote a culture of trust (Verhoeven, 2010). In Hardy’s (1996) terms, movements of the APA into the various dimensions of power were conducted in order to consolidate an adequate ‘power of the system’ involving a culture of collaboration capable of leading the Seaport to a superior level of CIC – one characterized by sustainability. 133 6. Concluding remarks and future development of the research Managing IC in a meta-organisation such as a seaport is a complex task when compared to individual organisations. It is the goal of this essay to provide evidence about how a port coordinator manages the seaport’s CIC in a setting which is characterised by the coexistence of several actors possessing different levels of power and following their own interests. Actors may manifest non-collaborative or even conflictive behaviours not only between them, but also towards the network coordinator. The case study provided us with illustrations, which along with the literature review served our purpose of developing a conceptual framework (see figure 4.1) depicting the management of the CIC of a meta-organisation by a network coordinator, in the circumstance a port authority. We claim that Hardy’s (1996) framework of power can be effectively used in order to explain how IC is created in a meta-organisational setting. Our evidence suggests that, besides directly promoting CIC through the deployment of resources, the network coordinator fosters collaboration and knowledge transfer between seaport’s members. This is done through the mobilisation of various dimensions of power – of resources, of processes and of meanings – in coercive and non-coercive fashions. Coercive deployment of resources can only take place in situations of power imbalance between the network coordinator and other actors, but even in such situations non-coercive approaches are preferred. When there is power balance, non-coercive mobilisations of power are the only ones available to the network coordinator. Moreover, the mobilisation of those dimensions of power can have beneficial effects in the development of a trust based collective culture grounded in a ‘power of the system’ that can potentiate the level of collaboration, thus leading to a more sustainable type of CIC. We found this to be an important objective of the network coordinator. 134 This essay provides both academics and practitioners with important contributions. It leads to a better understanding of power dynamics and its effects over IC in the context of meta-organisations such as seaports. As stated by Lee (2006), an effective coordination of the network requires a good integration of its members, from a social interaction perspective. The coordinator should function as an integrating mechanism aiming to “guide” members to achieve common goals (Winkler, 2006). This integration can be achieved by sharing visions and goals, or by sharing processes and procedures, by the use of a common IT system or by meeting frequently, for example (Lee, 2006). Indeed, we consider that our research supports this claim. Visions and goals were shared by means of a Strategic Plan, processes and procedures were shared efficiently using a common IT System, and the PCA provided us with an example of the possible advantages resulting from meetings. This study is not without limitations. First of all, the case study was conducted in a specific context – a seaport. Therefore, generalisation of this research should only be conducted in a theoretically framed perspective. Secondly, our goal was to know how a network coordinator manages a network in order to develop CIC. Consequently, we only focused our research in a network coordinator and how it used its power to influence other members. Also, as Hudson et al. (1999) we adopted the normative view of collaboration as a good thing, despite the fact that collaboration can also develop bad outcomes. Finally, we consider that there are several avenues for further research. Future studies could address the individual point of view of network members, i.e. how they exert their power in order to develop their own IIC even if damaging the collective. It would also be important to further explore why, in this type of setting, there are organisations that tend to be more collaborative than others. Finally, although a network coordinator may act in order to align interests and promote collaboration, there are 135 occasions where conflict might prevail. Future research could address how a network coordinator uses different approaches to manage conflict in order to minimise the effects of a potential collective intellectual liability. 136 Chapter 5 – Conclusion 1. Introduction In this chapter we present the main conclusions and implications of the research. The chapter starts with a summary of the thesis and then the thesis’ main contributions are outlined. Subsequently, we discuss the thesis’ limitations and suggest some opportunities for further research. Finally, we make some concluding remarks. 2. Summary of the thesis This thesis resulted from an in-depth single case study conducted in the Portuguese Seaport of Aveiro. Its purpose was to develop understanding about the creation and deterioration of intellectual capital in this type of setting, which we labelled here as ‘meta-organisation’. The thesis has been divided into three essays, in which we explored different aspects of the aforementioned theme. The first essay, which corresponds to the second chapter, aimed to improve comprehension about how IC is created and deteriorated in a meta-organisation. More specifically, how a meta-organisations’ CIC and its members’ IIC are interrelated and how this relationship affects IC creation and deterioration at both levels of analysis, from a longitudinal perspective. Several conclusions emerged from this essay. A general conclusion is that in meta-organisations it is possible to establish a distinction between the CIC of the whole network and the IIC of each individual member, and that these two levels are interconnected. We found evidence, however, that this 137 relationship is not a linear one. Indeed, the creation of IC by individual organisations may lead to the emergence of a collective intellectual liability. Also, changes in the CIC may have distinct impacts on members’ IIC. CIC and IIC appear as a function of both collective and individual dimensions. Another conclusion is that there are situations whereby IC may be created or even deteriorated at both individual and collective levels of analysis, in an interdependent way and through time: indeed, in some instances firms might incur in IIL, thus giving primacy to collective interests, but in the medium to long term the creation of CIC may translate itself into an intellectual asset for that firm. Inversely, a firm which pursues its individual goals and acts “against” collective ones, damaging the CIC, may suffer an IIC deterioration over time. The second essay, which has been presented in the third chapter, explores the main factors that, in a meta-organisational setting, underlie the creation and deterioration of CIC. More specifically, we aimed to identify those factors and understand how they are articulated to produce these effects. The factors we identified were, on the one hand, the compatibility/incompatibility of goals and, on the other hand, the power balance/imbalance. Conclusions on the articulation of such factors in producing effects on CIC are then encapsulated in an integrated framework where we suggest that these are two crucial determinants for the creation of CIAs or the emergence of CILs. Importantly, this framework incorporates a dyadic perspective and a network one: from a dyadic perspective, we point out that collaborative behaviours resulting from a compatibility of goals between the network coordinator and other members promote the creation of CIC (although in certain circumstances there is the possibility that a CIL emerge, namely due to the non-fulfilment of non-monetary obligations). Still from a dyadic perspective, CIC can also be created in situations of incompatibility of goals, when the network coordinator makes uses of a power exercise to promote a collaborative behaviour. We also conclude that CIL may emerge when there is a non-collaborative or conflictive behaviour between 138 APA and a member as a consequence of an incompatibility of goals and a situation of power balance between them prevails. From a network perspective we argue that when members’ goals are compatible and they collaborate to achieve the meta-organisations’ goals, CIC may increase. However, CILs might emerge when there is a relationship of power balance between members and they adopt a conflictive behaviour (due to incompatibility of goals) and at the same time the network coordinator does not possess the power to align members’ goals with the meta-organisation’s ones. Finally, in the third essay, displayed in the fourth chapter, it was our objective to understand how a network coordinator manages the meta-organisation’s CIC from a power perspective. We used Hardy’s (1996) framework of power as a lens of analysis. Several conclusions emerged. Firstly, mobilisation of different dimensions of power – in both coercive and non-coercive ways – is crucial to effectively manage the metaorganisation’s CIC. Secondly, although coercive resources may be deployed when there is a situation of power imbalance between the network coordinator and other actors, a non-coercive approach is preferred: by mobilising non-coercive dimensions of power, the network coordinator may foster a trust based collective culture within the seaport, which is deemed appropriate do develop a more ‘sustainable’ type of CIC. Indeed, a collective culture grounded in a ‘power of the system’ may enhance the level of collaboration between the various actors. On the other hand, in situations of power balance, the mobilisation of the less visible dimensions of power is mandatory in order for the network coordinator to achieve its (the meta-organisation’s) goals regarding CIC creation. 139 3. Contributions This thesis makes several contributions for the literature in IC. In the first place, we consider the application of the IC concept to a complex setting such a seaport – i.e., a meta-organisation – as a major contribution. Indeed, as long as the authors are aware, IC has not been applied to such contexts. Most IC literature focus on individual firms, although a more recent trend applies this concept to broader units of analysis such as regions or nations. Besides extending the concept of IC to this type of setting we also contribute to research on intellectual liabilities, which is still very scarce. Furthermore we consider that there is a gap in IC literature regarding the application of the concept of intellectual liabilities to ‘meso’ or ‘macro’ units. The research of De Santis and Giuliani (2013) confirms this trend: it accounts for only 25 studies regarding intellectual liabilities, with the majority of these being theoretical and focused on the development of awareness on this topic. By conceptualising the seaport as an organisation per se, with its own IC, and composed of several organisations with their own IC, the first essay contributes to our understanding of the effects of the interdependency between the meta-organisation’s CIC and its members’ IIC and of how this affects the creation and deterioration of IC at both levels of analysis. We contribute to the literature by showing that the IC of a metaorganisation is different from the sum of the individual ICs of the individual organisations composing it, i.e., the whole (CIC) is different from the sum of its parts (sum of the IIC of the members). Indeed, we suggest that there are CIC dimensions that go beyond the individual ones. From a managerial point of view, this can be very useful in the sense that it may create awareness over the coordinator regarding the aforementioned relationship between the collective and the individual ICs and the effects that members’ actions (including their own) might have over the seaport’s CIC.