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Business model disclosure in the Strategic Report: Entangling intellectual capital in value creation process

Laura Bini (Department of Economics and Business Studies, University of Florence, Florence, Italy)
Francesco Dainelli (Department of Economics and Business Studies, University of Florence, Florence, Italy)
Francesco Giunta (Department of Economics and Business Studies, University of Florence, Florence, Italy)

Journal of Intellectual Capital

ISSN: 1469-1930

Article publication date: 11 January 2016

2292

Abstract

Purpose

The purpose of this paper is to evaluate business model (BM) disclosure. As the BM shows how a company creates and captures value, its communication in the Annual Report is considered a necessary background for a dynamic analysis, interpretation, and evaluation of the intellectual capital (IC) contribution to a company’s competitive advantage.

Design/methodology/approach

Focusing on a sample of listed UK companies operating in high-technology industries, this paper runs a content analysis of BM disclosure presented in the Strategic Report (SR). To develop the analysis, it refers to an ontological approach that encompasses the main research contributions to this topic.

Findings

The analysis of SRs revealed that few companies use their BM disclosure to highlight the contribution of their IC to create and capture value. BM descriptions are not always clearly distinguishable from other strategic concepts and poorly illustrate the interactions among the BM components, which help understand how IC is entangled in a company’s value creation process.

Practical implications

This paper answers the Financial Reporting Council’s call for comments about its Guidance on SR. More in general, it contributes to the issue of the regulation of narrative information in the Annual Report.

Originality/value

This paper proposes a methodological framework for the analysis of BM disclosure quality. Thanks to this framework, it points out some critical issues of BM disclosure and offers some hints useful for its regulation.

Keywords

Citation

Bini, L., Dainelli, F. and Giunta, F. (2016), "Business model disclosure in the Strategic Report: Entangling intellectual capital in value creation process", Journal of Intellectual Capital, Vol. 17 No. 1, pp. 83-102. https://doi.org/10.1108/JIC-09-2015-0076

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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