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Human Capital disclosure on LinkedIn

A study on ownership structure and human capital disclosure in Sweden and Norway

Written by C. Azelius, D. Johansson

Paper category

Master Thesis

Subject

Business Administration>Human Resources

Year

2019

Abstract

Master Thesis: HC disclosure understands the value of a company, market value and book value are two ways to value a company. The differences between these values ​​used to be difficult for company managers to understand and explain. Therefore, goodwill (ie trademarks and patents) is used to explain this difference (Bart, 2001). However, in the late 1990s, goodwill was considered insufficient, and new factors explaining the differences were identified, which were identified as intellectual capital assets (IC) (Brennan and Cornell, 2000; Bozbu La, 2004). Sveiby (1997) divides IC into three components, personal capabilities (ie, HC, the ability of employees to act in various situations to create tangible and intangible assets), internal structure (ie, intellectual property rights, models, and employee-created but owned Procedures) by the company) and external structures (ie relationships with customers and suppliers). Previous studies have shown that HC is an important component and value component of the three IC categories, and has always been considered a key component in the company’s value creation process (Bozbura, 2004; Claver-Cortes, Zaragoza-Saez, Molina- Manchon and Ubeda-Garcia, 2015; Chen and Lin, 2003; Chen and Lin, 2004; Gamerschlag, 2013; Massingham, Nguyet Que Nguyen and Massingham, 2011; Petty and Guthrie, 2000). The disclosed HC information is limited, although researchers have pushed companies to collect knowledge about their HC (Chen & Lin, 2004; Milos, 2007). This will produce more accurate accounting statements and assess employee contributions at an appropriate level (Chen & Lin, 2004; Milos, 2007). Early research on IC and HC led to multiple models designed to supplement information financial reporting in the following ways, by making previously unknown intangible assets visible and measurable (Ordonez de Pablos, 2002). Examples of these models include Kondrad Group's intangible balance sheet (Sveiby & Annell, 1989), Sveiby's intangible asset monitor (Sveiby, 1997), Scandia Navigator (Edvinsson & Malone, 1997), BalancedScorecard (Kaplan & Norton2), and IC Index (Roos, Roos, Dragonetti and Edvinsson, 1997). Scandia Navigator and BalancedScorecard are widely recognized (Asanga Abhayawansa, 2014). Scandia Navigator is a measurement model that combines digital indicators, visual effects or charts and narratives to create an account of company value creation (Andriessen, 2004). The balanced scorecard is a value measurement method that sets financial and non-financial goals in a measurable process (Kaplan & Norton, 1992). 2.2 LinkedIn In recent years, the growth of the Internet as a corporate information disclosure tool has increased (Pisano et al., 2017). The company's website is used to communicate with stakeholders, issue news and respond to questions (Kent & Taylor, 1998). The rapid growth of Web 2.0 and social media has driven companies to develop and adapt to new communication platforms (Waters, Burnett, Lamm and Lucas, 2009). Sites and social networks in Web 2.0 include Facebook, Twitter, blogs, and Wikipedia (Kaplan & Haenlein, 2010). Scholars believe that it is possible to obtain insights from sources other than traditional sources, such as LinkedIn and Twitter (Cuozzo et al., 2017). The two-way communication tools supported by these platforms make it a powerful strategic way for companies to disclose ICs, build long-term relationships, and improve communication with stakeholders (Dumay and Guthrie, 2017; Kaplan and Haenlein, 2010 ; Giacosa, Ferraris and Brescini, 2017). Previous research on social media focused on general social media, such as Facebook (Zide, Elman, and Shahani-Denning, 2017). However, some studies have investigated the use of LinkedIn by companies in various fields (Pisano et al., 2017). For example, Archambault and Grudin (2012) conducted a study comparing LinkedIn and other social networking sites. Another study by Basak and Calisir (2014) investigated how users use LinkedIn. In addition, scholars have also investigated how LinkedIn profiles provide the real situation of entry-level work and career development (Case, Gardinier, Rutner, and Dyer, 2012) and Witzig, Spencer, and Galvin (2012) studied the three types of LinkedIn Use between organizations, non-profit organizations, large companies and small companies. They concluded that small businesses are more focused on using LinkedIn as a social media tool than large companies. The latest research on LinkedIn was conducted by Pisano et al. (2017), investigating the relationship between HC disclosure and ownership structure. For recruitment, networking, and career purposes, LinkedIn is considered the most popular and widely used social networking site (Pisano et al., 2017), which is supported by previous research results (Caers and Castelyns, 2011; Fisher, McPhail, You and Ash, 2014; Zide et al., 2017). Bonson and Bednarova (2013) suggested that LinkedIn’s main focus is disclosure on specific stakeholder groups, namely current and potential employees. Research by Briones, Kuch, Liu, and Jin (2011) found that social media is necessary to improve relationships with stakeholders. Through Web 2.0 and social media to make interaction possible, companies seek to develop stakeholder relationships and improve the timeliness of information (Dumay & Guthrie, 2017. Read Less