A learning curve explanatory theory for team learning valuation Yannis Zorgios CLMS (UK) Limited, Croydon, UK, and Orestes Vlismas and George Venieris Department of Accounting and Finance, Athens University of Economics and Business, Athens, Greece Abstract Purpose – This study seeks to examine how the quantitative semantics of the learning curve phenomenon can be employed in order to derive monetary information for team learning observed within knowledge-intensive production environments. Design/methodology/approach – Software development is selected as an identical example of a team-based, knowledge-intensive production environment. The interaction of learning rate of the developer teams and the improvements on their average solving time (i.e. productivity) is modelled as a Lotka-Volterra predator-prey interacting populations system establishing a causal relationship between the human capital (HC) of organizational teams and the observed learning curve effects on their performance. In addition, empirical evidence illustrates that the estimated learning rates capture the entire range of team learning effects on performance fluctuations caused by the HC. Findings – The fluctuations on the learning rates can be interpreted as a result of the HC variability across the population of developer teams. Hence, the cost implications of the HC within knowledge-intensive production environments can be rationalised using the quantitative semantics of the learning curve phenomenon Research limitations/implications – The learning curve is associated with the cost side of the organizational income-generating process limiting its potential valuation applications for team learning observed within the context of the production environments. Originality/value – The study offers a theoretical justification, supported by empirical evidence, for employing the mathematical expression of the learning curve paradigm to rationalize the financial consequences of team learning observed within production environments. Keywords Team learning, Learning curves, Human capital, Asset valuation Paper type Research paper 1. Introduction Intellectual capital reporting frameworks (ICRFs) aim to satisfy the requirements of various stakeholders for valid intellectual capital (IC) information about the contribution of the organizational learning on value creation (Mouritsen and Larsen, 2005). Argyris and Scho ¨n (1978, p. 29) used the term organizational learning as a metaphor for processes in which “... members of the organization act as learning agents for the organization by detecting and correcting errors in organizational theory-in-use and embedding the results of their inquiry in private images and shared maps of the organization”. Defining the IC as “... the sum of the knowledge of its The current issue and full text archive of this journal is available at www.emeraldinsight.com/0305-5728.htm The authors wish to acknowledge and thank the Alexander Onassis Public Foundation Institution for supporting the doctoral research of Orestes Vlismas, part of which was carried out within the scope of this study. VINE 39,1 20 VINE: The journal of information and knowledge management systems Vol. 39 No. 1, 2009 pp. 20-39 q Emerald Group Publishing Limited 0305-5728 DOI 10.1108/03055720910962425