Measuring your company's intellectual performance
TL;DR: It is individuals who own and control the knowledge of organizational members, the chief source of competitive advantage Intangible assets often tell one more about the future earnings of the comp as mentioned in this paper.
About: This article is published in Long Range Planning.The article was published on 1997-06-01. It has received 1036 citations till now. The article focuses on the topics: Competitive advantage & Earnings.
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TL;DR: The rise of the new economy is attributed to the increased prominence of intellectual capital (IC) as a business and research topic as discussed by the authors, and there is much to support the assertion that IC is instrumental in the determination of enterprise value and national economic performance.
Abstract: The rise of the “new economy”, one principally driven by information and knowledge, is attributed to the increased prominence of intellectual capital (IC) as a business and research topic. Intellectual capital is implicated in recent economic, managerial, technological, and sociological developments in a manner previously unknown and largely unforeseen. Whether these developments are viewed through the filter of the information society, the knowledge‐based economy, the network society, or innovation, there is much to support the assertion that IC is instrumental in the determination of enterprise value and national economic performance. First, we seek to review some of the most significant extant literature on intellectual capital and its developed path. The emphasis is on important theoretical and empirical contributions relating to the measurement and reporting of intellectual capital. The second part of this paper identifies possible future research issues into the nature, impact and value of intellectual management and reporting.
1,357 citations
TL;DR: In this article, the authors present a review of the most important tools available to managers for managing intangible resources, including human resource accounting, economic value added, balanced scorecard, and intellectual capital.
1,034 citations
Cites background from "Measuring your company's intellectu..."
...It is essential to measure, and thus manage, also the flows of intellectual capital, that is the changes in the stocks of intangible resources (Roos and Roos, 1997)....
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...Under the name of intellectual capital, we can classify all intangible resources (Bontis, 1996; Edvinsson and Malone, 1997; Roos and Roos, 1997), as well as their interconnections (Roos et al....
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...Under the name of intellectual capital, we can classify all intangible resources (Bontis, 1996; Edvinsson and Malone, 1997; Roos and Roos, 1997), as well as their interconnections (Roos et al., 1997; Bontis, 1998)....
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...Unlike accounting and cash flows, in fact, intellectual capital flows do not necessarily add up to zero: in other words, intellectual capital management is not necessarily a zero-sum game (Roos and Roos, 1997)....
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TL;DR: An extensive literature survey on knowledge management explores knowledge management with respect to its content, its definition and domain in theory and practice, its use and implications, and to point out some problems inherent in the concept.
Abstract: Over the past several years there have been intensive discussions about the importance of knowledge management within our society. The management of knowledge is promoted as an important and necessary factor for organisational survival and maintenance of competitive strength. To remain at the forefront organisations need a good capacity to retain, develop, organise, and utilise their employees’ capabilities. Knowledge and the management of knowledge appear to be regarded as increasingly important features for organisational survival. Explores knowledge management with respect to its content, its definition and domain in theory and practice, its use and implications, and to point out some problems inherent in the concept. The main contribution of this paper is an extensive literature survey on knowledge management.
593 citations
Cites background from "Measuring your company's intellectu..."
...…to have been the dominant mode ten years ago, today's classification schemes are oriented towards distinguishing between external (customer- related) and internal structures, on the one hand, and human capital, on the other (e.g. Sveiby, 1997; Roos and Roos, 1997; Petrash, 1996; Skandia, 1995)....
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TL;DR: In this paper, the authors explore the positive relationship between green intellectual capital and competitive advantages of firms, and propose a novel construct called green Intellectual Capital (GIC) for green innovation or environmental management.
Abstract: No research explored intellectual capital about green innovation or environmental management. This study wanted to fill this research gap, and proposed a novel construct – green intellectual capital – to explore the positive relationship between green intellectual capital and competitive advantages of firms. The empirical results of this study showed that the three types of green intellectual capital – green human capital, green structural capital, and green relational capital – had positive effects on competitive advantages of firms. Moreover, this study found that green relational capital was the most common among these three types of green intellectual capital, and the three types of green intellectual capital of Medium & Small Enterprises (SMEs) were all significantly less than those of large enterprises in the information and electronics industry in Taiwan. In sum, companies investing many resources and efforts in green intellectual capital could not only meet the trends of strict international environmental regulations and popular environmental consciousness of consumers, but also eventually obtain corporate competitive advantages.
490 citations
TL;DR: In this article, the authors measured the intellectual capital performance of commercial banks in Malaysia for the period 2001 to 2003, using efficiency coefficient called VAIC™ developed by Ante Pulic.
Abstract: Purpose – This paper measured the intellectual capital performance of commercial banks in Malaysia for the period 2001 to 2003, using efficiency coefficient called VAIC™ developed by Ante Pulic.Design/methodology/approach – Data required to calculate human capital, structural capital and capital employed efficiencies were obtained from annual reports.Findings – As a whole, all banks have relatively higher human capital efficiency than structural and capital efficiencies. Domestic banks were generally less efficient compared to foreign banks. Hong Leong Bank, Public Bank and Southern Bank were the top three efficient domestic banks based on VAICTM assessment, while Scotia Bank is the most efficient foreign bank. Public Bank and EON Bank have consistently showed improvement in efficiency in the three years. There were significant differences between rankings of bank according to efficiency and traditional accounting measures. In view of the findings that seven out of ten domestic banks did not show improvem...
464 citations
References
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TL;DR: In this paper, the authors argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **
31,623 citations
TL;DR: In this paper, the authors explore the usefulness of analyzing firms from the resource side rather than from the product side, in analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested.
Abstract: Summary The paper explores the usefulness of analysing firms from the resource side rather than from the product side. In analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested. These tools are then used to highlight the new strategic options which naturally emerge from the resource perspective.
18,677 citations
TL;DR: In this paper, the authors propose a paradigm for managing the dynamic aspects of organizational knowledge creating processes, arguing that organizational knowledge is created through a continuous dialogue between tacit and explicit knowledge.
Abstract: This paper proposes a paradigm for managing the dynamic aspects of organizational knowledge creating processes. Its central theme is that organizational knowledge is created through a continuous dialogue between tacit and explicit knowledge. The nature of this dialogue is examined and four patterns of interaction involving tacit and explicit knowledge are identified. It is argued that while new knowledge is developed by individuals, organizations play a critical role in articulating and amplifying that knowledge. A theoretical framework is developed which provides an analytical perspective on the constituent dimensions of knowledge creation. This framework is then applied in two operational models for facilitating the dynamic creation of appropriate organizational knowledge.
17,196 citations
Book•
01 Jan 2008
TL;DR: The Japanese companies, masters of manufacturing, have also been leaders in the creation, management, and use of knowledge-especially the tacit and often subjective insights, intuitions, and ideas of employees as discussed by the authors.
Abstract: Japanese companies, masters of manufacturing, have also been leaders in the creation, management, and use of knowledge-especially the tacit and often subjective insights, intuitions, and ideas of employees.
16,886 citations
TL;DR: The most powerful way to prevail in global competition is still invisible to many companies as discussed by the authors, which is why the concept of the corporation itself has not yet been recognized as a powerful competitive advantage.
Abstract: The most powerful way to prevail in global competition is still invisible to many companies. During the 1980s, top executives were judged on their ability to restructure, declutter, and delayer their corporations. In the 1990s, they’ll be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible — indeed, they’ll have to rethink the concept of the corporation itself.
15,465 citations