GOD IS A REAL GOOD GOD

INTELLECTUAL CAPITAL

BY DR. LEONARDO DELIZO, PhD., MSBA, SLH – JHS

CEO & PRESIDENT


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The term intellectual capital collectively refers to all resources that determine the value and the competitiveness of an enterprise. As such, it includes as subsets the attributes that concur to building all financial statements as well as the balance sheet.

Intangibles

The value of an enterprise is made of physical assets, various financial assets and, finally, intangible assets, i.e., intellectual capital (IC).Extracting and measuring the real value and performance of intellectual capital is essential for any corporate head who knows how high the stakes have become for corporate survival in the knowledge and information age. So, the main point is how an organization can affect the firm's stock price using the leverage of intellectual assets.

The intangibleness refers to the fact that IC is not easily translatable in financial terms. All other assets of a company, such as a piece of real estate or a credit note, can be monetized: i.e., there exist standard criteria for expressing their value in currency. IC, instead, is mainly made of elements (such as the quality of employees or the reputation of a brand among consumers) for which there is no consensual model for monetary expression. A more precise name for IC would therefore be "non-financial assets".

Elements

In all definitions of IC, the following taxonomy can be recognized:

Human Capital

The value that the employees of a business provide through the application of skills, know how and expertise. Human capital is an organization’s combined human capability for solving business problems. Human capital is inherent in people and cannot be owned by an organization. Therefore, human capital can leave an organization when people leave. Human capital also encompasses how effectively an organization uses its people resources as measured by creativity and innovation.

Structural Capital

The supportive infrastructure, processes and databases of the organisation that enable human capital to function. Structural capital includes such traditional things as buildings, hardware, software, processes, patents, and trademarks. In addition, structural capital includes such things as the organization’s image, organization, information system, and proprietary databases. Because of its diverse components, structural capital can be classified further into organization, process and innovation capital. Organizational capital includes the organization philosophy and systems for leveraging the organization’s capability. Process capital includes the techniques, procedures, and programs that implement and enhance the delivery of goods and services. Innovation capital includes intellectual properties and intangible assets. Intellectual properties are protected commercial rights such as copyrights and trademarks. Intangible assets are all of the other talents and theory by which an organization is run.

Relational Capital

Consists of more identifiable items such as trademarks, licences, franchises, but also the less definable, such as customer interactions and relationships. The notion that customer capital is separate from human and structural capital indicates its central importance to an organization’s worth.

Source:

http://en.wikipedia.org/wiki/Intellectual_capital

1. ^ Sullivan, Patrick H. (2000). Value-driven Intellectual Capital. Wiley.
2. ^ Stewart, Thomas A. (1997). Intellectual Capital - The New Wealth of Organizations.
3. ^ Sveiby, Karl Erik (1997). "The Intangible Asset Monitor". Journal of Human Resource Casting and Accounting 2 (1).
4. ^ Paolo Magrassi (2002) "A Taxonomy of Intellectual Capital", Research Note COM-17-1985, Gartner
5. ^ Khavandkar , Jalil & Khavandkar , Ehsan . (2009), "Intellectual Capital: Managing, Development and Measurement Models". Iran Ministry of Science, Research and Technology Press.
6. ^ Maddocks, J. & Beaney, M. 2002. See the invisible and intangible. Knowledge Management, March, 16-17.
7. ^ Maddocks, J. & Beaney, M. 2002. See the invisible and intangible. Knowledge Management, March, 16-17.
8. ^ Edvinsson, L. & Malone, M.S. 1997. Intellectual Capital: Realizing your Company’s True Value by Finding Its Hidden Roots. New York: Harper Business.
9. ^ Skyrme, D.J. 1998. Valuing Knowledge: Is it Worth it?