The development from the industrial society to an information and knowledge based society is mainly characterized by the evolution of information and knowledge based technologies and the possibilities to share and gain information within a globalized world. In order to create products and to provide services which are competitive in the market it can be assumed that the importance of obtaining competitive advantages, such as process or product based knowledge and protecting and open up new resources for innovation is permanently rising.
In the last century labor has been only considered as an economic production factor in context with land and capital following the classical economic approach of Adam Smith. Today we have realized that a main source for innovation is based on a company’s labor workforce also known as human resources.
There is a scientific consensus that on average 80% of a company’s market value is based on intangible assets and that knowledge is getting a strategic resource and a critical success factor for competitiveness.1 A straight trend of emerging business and knowledge networks which have an important impact on corporate success2 are supporting this aspect.
That implies a distinct constraint for modern management to capture and evaluate information regarding intangible company assets in order to be able to operationalize actions to support the strategy. The fact that management decisions are taken based on information which is corresponding on 20% of the company value is unsatisfying and may lead into the wrong direction.
There are several problems which occur if management decides to disclose these “hidden assets”3. Based on the individual company and its core business, assets have to be identified and evaluated in a proper way. Starting with the choice of a proper measuring and evaluating method decisions have to be made which information should be kept confidential and which information would be advantageous to provide…
Table of Contents
1. Introduction
1.1. Point of departure
1.2. Research scope and delimitations
1.3. Motivation
1.4. Methodology and structure of this thesis
2. Discovering the fundamental terminologies
2.1. Intangible Assets
2.2. Intellectual Capital
2.3. Knowledge
2.4. The rise of Intellectual Capital
2.5. The knowledge worker
2.6. Organizational knowledge creation
2.7. Distribution and protection of knowledge
2.8. Human Resources Management
3. Measurement of Intellectual Capital
3.1. Direct Intellectual Capital Methods (DIC)
3.2. Market Capitalization Methods (MCM)
3.3. Return on Assets Methods (ROA)
3.4. Scorecards Methods (SC)
4. Selective measuring methods
4.1. The IC Audit by Brooking
4.2. Intangible Assets Monitor by Sveiby
4.3. General measurement problems
5. Human Resources Management benefit potential
5.1. Reporting
5.2. Benchmarking
5.3. Self-Awareness and enhancement potential
6. Conclusion and Research Outlook
Objectives and Scope
This thesis explores the theoretical and practical framework of intellectual capital, examining how organizations can identify, measure, and leverage their intangible assets to gain a competitive advantage in an information-based economy.
- Analysis of fundamental terminologies including intangible assets, knowledge, and intellectual capital.
- Evaluation of diverse measurement approaches such as direct methods, market capitalization models, and scorecards.
- In-depth investigation of specific models like the IC Audit by Brooking and the Intangible Assets Monitor by Sveiby.
- Exploration of the role of human resources management in maximizing the benefits of intellectual capital.
- Development of insights into reporting, benchmarking, and the strategic enhancement of hidden assets.
Excerpt from the Book
4.1. The IC Audit by Brooking
The term audit is engraved by its role with corporate accounting and the objective to generate a valid and comprehensible view of the financial situation of an organization. By using it in the Intellectual Capital context the audit term is used more extensive. Instead of focusing only on the existence and valuation of assets like an accountant does, the auditor has to take into consideration if intangible assets are stated properly to generate the best possible performance within an organization.155
BROOKING used the audit by setting up her diagnostic model for intellectual capital, called Technology Broker, which takes a combination of market assets, intellectual property assets, human-centered assets and infrastructure assets into consideration (see Figure 5). Each dimension is examined by asking a number of specific questionnaires (178 in total) to grant a holistic identification and evaluation of IC components and provides the possibility to state out the monetary value based on an indicator system.
There are several scenarios in which the usage of the IC Audit leads to valuable organizational information:156
Validation of the organizations’ ability to achieve its goals
Research and Development planning
Allocation of background information for reengineering programs
Providing focus on organizational education and training
Assessing enterprise value
Increasing organizational memory
Chapter Summaries
1. Introduction: Outlines the shift from industrial to knowledge-based economies and establishes the problem of valuing hidden assets.
2. Discovering the fundamental terminologies: Defines key concepts such as intangible assets, intellectual capital, and various dimensions of organizational knowledge.
3. Measurement of Intellectual Capital: Provides an overview of the four primary classifications of measurement approaches for intellectual capital.
4. Selective measuring methods: Examines specific indicator-based models and the practical application of audits to intellectual capital.
5. Human Resources Management benefit potential: Discusses how organizations can report, benchmark, and improve through the strategic application of intellectual capital knowledge.
6. Conclusion and Research Outlook: Summarizes the importance of managing hidden assets and provides a perspective on future research requirements.
Keywords
Intellectual Capital, Intangible Assets, Knowledge Management, Human Resources Management, IC Audit, Intangible Assets Monitor, Corporate Memory, Knowledge Worker, Benchmarking, Asset Valuation, Competitive Advantage, Organizational Knowledge, Hidden Assets, Performance Indicators, Strategic Management.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on the identification, measurement, and evaluation of intellectual capital and intangible assets, which are often overlooked by traditional accounting practices but represent a significant portion of a company's market value.
What are the central thematic areas covered?
The main themes include definitions of fundamental terms, models for measuring intellectual capital, the role of the knowledge worker, organizational knowledge creation, and the strategic benefits of managing these assets through human resources management.
What is the primary objective of this research?
The goal is to explore how organizations can better capture and evaluate hidden values to steer their strategy effectively and to provide an overview of practical models for managing intellectual capital.
Which scientific methods are primarily discussed?
The work covers indicator-based measurement models, specifically focusing on the IC Audit by Brooking and the Intangible Assets Monitor by Sveiby, as well as qualitative research methods based on existing literature.
What does the main body of the work address?
The main body systematically examines the transition from an industrial to an information society, defines key terms, categorizes various measuring approaches, and analyzes the role of HRM in leveraging knowledge assets.
What are the key terms that define this work?
Key terms include intellectual capital, knowledge management, intangible assets, and the diverse models used to quantify organizational performance, such as scorecards and audit processes.
How does the IC Audit by Brooking work?
It uses a diagnostic model called 'Technology Broker' that utilizes specific questionnaires across four dimensions (market assets, intellectual property, human-centered assets, and infrastructure) to grant a holistic evaluation.
Why is the 'knowledge worker' considered significant in this context?
Knowledge workers are seen as the primary value drivers in modern organizations; the thesis argues they must be treated as strategic assets rather than simple cost drivers to prevent a loss of organizational knowledge.
What role does the 'Intangible Assets Monitor' play according to Sveiby?
It acts as a scorecard-based management toolbox designed to help leaders monitor and manage intangible assets across three specific perspectives: personnel competence, internal structure, and external structure.
- Citation du texte
- Marius Karzell (Auteur), 2010, Measuring and Evaluating Intellectual Capital, Munich, GRIN Verlag, https://www.grin.com/document/178990
