Showing papers on "Intangible asset published in 2010"

Intangible assets in higher education and research: mission, performance or both?

Abstract: Purpose – This paper aims to discuss the role of intangible assets in higher education and research institutions and to present a measurement framework, along with an illustrative application.Design/methodology/approach – A review of existing theories and practical experiences is undertaken to build the core conceptual model and a dashboard of indicators. The model is then applied to investigate the mission and performance angles of intellectual capital with reference to an Italian higher education and research institution.Findings – Creating intangible assets is at the core of the mission of education and research organizations. The identification and measurement of intellectual capital are thus an operational priority to evaluate the alignment between strategic orientation and performance within such institutions.Research limitations/implications – The research has to be considered as exploratory and presents a single case, resulting in the need for further applications. However, the dashboard of metric...

Importance and contribution of intangible assets: SME managers' perceptions

Abstract: Purpose – The purpose of this paper is to focus on small and medium enterprises (SMEs) in an attempt to cover the gap in research on intellectual capital (IC) applied to SMEs. The paper informs the debate on the importance of IC by providing empirical evidence of SME managers' perceptions about the importance and contribution of intangible assets to their businesses.Design/methodology/approach – Questionnaires were sent to New Zealand SMEs investigating managers' perceptions about the importance of and the contributions that intangible asset components make to their businesses, and to assess their familiarity with the term intellectual capital (IC) and their preferences in using the term IC versus intangible assets. The results pertaining to the importance of intangible assets were statistically analysed.Findings – This paper informs that the broad assumption that intangible assets are important and are value drivers of business' success is valid for small and medium enterprises. The majority of responden...

Developing a measurement approach for reputation of non-profit organizations

Abstract: As a result of the increasing adoption of private sector firms' values and concepts, non-profit organizations (NPOs) are becoming more and more aware of intangible assets' importance for achieving competitive advantages. Even though reputation can be considered an organization's central intangible asset, there is still no appropriate measurement approach for reputation in this context. In this paper, we identify the dimensions of NPO reputation and develop indices to measure these components. We develop a model by means of a qualitative inquiry and a quantitative study using a large-scale sample from the German general public. We find support for a two-dimensional measurement approach comprising an affective and cognitive component as well as four antecedent constructs (“quality,” “performance,” “organizational social responsibility (OSR),” and “attractiveness”). The results of a second quantitative study in which we examine NPO reputation's relationship with important outcome variables, such as willingness to donate or work as an honorary member, provide support for the measurement approach's stability as well as criterion validity. Furthermore, the results reveal the affective dimension's importance regarding positively influencing donor behavior. Copyright © 2009 John Wiley & Sons, Ltd.

How Intellectual Capital and Learning Organization Can Foster Organizational Competitiveness

Abstract: Intellectual capital can be regarded as the hidden value of an organization. The intention of these social capitals(human, organizational and customer) is to value the intangible asset and reassess the knowledge gaps to improvethe business advantage. Although intangible assets may represent competitive advantage, organizations do notunderstand their nature and value. Managers do not know the value of their own intellectual capital. They do notknow if they have the people, resources, or business processes in place to make a success of a new strategy. Theydo not understand what know-how, management potential, or creativity they have access to with their employees.Because they are devoid of such information, they are rightsizing, downsizing, and reengineering in a vacuum(Davis, 2009, p.17; Collis 1996).This paper is aims to review the Intellectual Capital, IC concept among

Measuring investment in intangible assets in the UK: results from a new survey

Abstract: This article presents results of the Investment in Intangible Asset (IIA) Survey launched by ONS in October 2009 It is a new and unique survey of firms in the UK, drawn from the business register to represent the market sector of the economy The survey is aimed at measuring investment of firms in six categories of intangible assets, these are: employer funded training, software, research and development (R&D), reputation and branding, design, and business process improvement The survey also set out to measure the life lengths of investments in each asset The results show the overall level of intangible asset spending in the UK is considerable The article explores the incidence, expenditure levels and life lengths of these assets

Corporate Reputation & Firm Performance: Empiricial Literature Evidence

Abstract: For ages, the view that corporate reputation positively impacts on firm performance has been documented; even accounting literature backs the notion that corporate reputation causes an enormous amount of wealth encapsulated in what is called goodwill, while some conventional wisdom assert that the reputation which organizations orchestrate for themselves do cause sustainable profits. These views have attracted quite a lot of scholars to structure research in so many areas of corporate reputation, and the body of knowledge on this subject is indeed not only increasing but deepening also. Reputation is an intangible asset and intangible assets are now increasingly seen as drivers of sustainable competitive business and corporate advantages. Thus, intangible assets like reputation are increasingly researched as sources of sustainable advantages. Research reveals that today what is usually called brand equity or corporate equity is actually determined by corporate reputation. Although reputation may be seen to arise as an output of different activities in the professions, the reputation an organization enjoys is actually constructed by the publics of that organization on the basis of information about the organization’s relative position to other organizations in the industry. It can arise out of consumers’ satisfying experience with the company’s products hence it can be inherited from an organization’s past actions. This work is a review of empirical studies on corporate reputation with emphasis on how it can help organizations achieve strong competitive advantage, enhance stock market performance as well as performance values on other measures. This work reveals that cultivating a strong reputation is a necessary foundation for today’s firms that intend to beat the competition, enhance their market outlook and financial performance as well as sustained existence. Corporate reputation is however also revealed to be a logical outcome of the quality of corporate governance operated in an organization. It is a critical resource, and indeed a pillar, upon which the quality of an organization’s future can be predicated. The paper concludes that the best material wisdom in today’s corporate and political spheres is the wisdom to have a good reputation because it pays to have a very good positive image.

Intangible asset management framework: an empirical evidence

Abstract: – The purpose of this paper is to explore the interrelationships of intangible assets to business performance. The paper reports an empirical evidence for the impact of three elements of intangible assets: learning and growth, internal business process, and external structure on the business performance of the firm. The linkages between intangible asset elements and business performance are investigated in companies of various business sizes, business sectors and establishment ages., – The proposed model was adapted from the balanced scorecard strategy map. The primary data for analyzing and investigating the interrelationships between intangible assets and business performance were gathered by subjective opinion survey questionnaire. In all, 3,084 questionnaires were distributed to the top management. The numbers of qualified responses were 304 and the data were analyzed using the structural equation modeling technique., – The commonly assumed causal relationships are confirmed, i.e. the element of learning and growth has influence on internal business process, the element of internal process has effect on external structure, and the element of external structure, in turn, has effect on business performance., – Following the research findings, top management in companies of different sizes, business sectors, and establishment ages should understand the nature of interrelationships and recognize the importance of intangible assets. These findings will enable top management to realize the impact of intangible asset elements on business performance so that long‐term strategies for effective intangible asset management may be emphasized for sustainable competitive advantage of the firm.

Environmental Information Provision, Market Valuation, and Firm Incentives: An Empirical Study of the Japanese PRTR System

Abstract: The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution. © 2010 by the Board of Regents of the University of Wisconsin System.

Communicating corporate image into existence: the case of the Saudi banking industry

Abstract: Purpose – The paper seeks to explore the factors that would make an impact on the corporate image of large commercial banks in Saudi Arabia through the perceptions of direct customers. It proposes an appropriate way of measuring corporate image in the Saudi banking industry through the development of a questionnaire.Design/methodology/approach – A questionnaire, presented in English and Arabic, was piloted and tested to a group of banking customers in three major cities of Saudi Arabia.Findings – Results indicate that three factors significantly influence perception: “financial prospects”, “corporate management” and “corporate communication”. These explain 67.7 per cent of the total variance. The notion of “market presence” was not strongly felt in the Saudi banking industry despite the growing trend of internationalization of large commercial banks in the country.Research limitations/implications – Corporate image is regarded as a critical, strategic and enduring intangible asset for an organization. A f...

Corporate Sustainability, Intangible Assets Accumulation and Competitive Advantage Constraints

Abstract: The article bridges corporate sustainability (CS) and intangibles, deepening the mechanisms linking specific stakeholder-related CS policies and practices to intangible asset accumulation and competitive outcomes. The implementation of CS strategies, practices and processes strengthens company ability to identify, protect and give value to inimitable resources, stimulating the development of intangibles related to human capital, innovation and knowledge, culture and reputation.

Environmental information provision, market valuation, and firm incentives: An empirical study of the Japanese PRTR system

Abstract: The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution. © 2010 by the Board of Regents of the University of Wisconsin System.

Value of intangibles arising from R&D activities

Abstract: This paper develops an empirical approach using econometric techniques for panel data which aims to contribute to the reduction/elimination of the deviation between the book and market value of firms. Based on 20 of the firms with the largest number of patents granted between 1996 and 2006, the results show that: (i) the increase in the return on equity following from an increase in the share of investment in RD (ii) there is a positive relationship between the results (and the value of firms) and RD (iii) by updating the additional periodical results generated by investment in R&D, the present value of the intangible asset can be determined.

Valuing it-related intangible capital

Abstract: As part of an effort to examine the value of intangible assets in the firm, our study is the first to create IT-related intangible asset stocks from firm-level survey data. We also use data on ITrelated business practices in order to understand the distribution of IT-related intangibles, and we create asset stocks to value research and development (R&D) and brand. Using a panel of 130 firms over the period 2003-2006, we find that intangible assets are correlated with significantly higher market values beyond their cost-based measures. Moreover, we estimate that there is a 3055% premium in market value for the firms with the highest organizational IT capabilities (based on a measure of HR practices, management practices, internal IT use, external IT use, and Internet use) as compared to those with the lowest organizational IT capabilities.

What influence the company’s economic value added? empirical evidence from china's securities market

Abstract: This paper empirically examined what would influence economic value added of the companies listed in China’s securities market. The methods of Factor analysis and multivariable linear regression model were used here. It drew the conclusion that the company’s capital structure, profit ability, size, growth ability, management ability, and industry’s return on equity had positive influence on EVA, indicating that these factors had an active influence on EVA. The intangible asset had poor negative relationship with EVA. And the inventory management ability had no influence on EVA. The possible reasons were discussed later and, some advice was given at the end in order to increase the company’s economic value. Key words: Economic value added, Influence factor, China

Success Factors in Cooperative Online Marketplaces: Trust as the Social Capital and Value Generator in Vendors-Exchange Relationships

Abstract: The business reliance on cooperative online exchanges for business-to-business transactions is on the rise. This paper examines the factors contributing to the success of vendor-exchange relationships in this type of marketplace. We use a Critical Realism approach to identify constructs salient to vendors-exchange relationships. A synthesis of value creation, social capital, and trust theories is used for conceptualizing the model. The model is tested using the data from a survey of vendors participating in a cooperative exchange. Results indicated that value creation was the main source of continuance in vendors-exchange relationship. However, the perception of value depended to a larger degree on the relationship quality and to a lesser degree on transactional exchanges (using the exchange's technology solutions as the sources of transaction), indicating the strength and extent of vendors-exchange relationship is an intangible asset for the exchange company. We also found that the exchange company's inn...

Process Capital as Strategic Success Factor: The Lufthansa Example

Abstract: The high importance of processes regarding a company’s success has been known for a long time. However, the level of importance of processes, especially in comparison with other success factors, has not been in focus in a consequent matter yet. The research regarding “intangible assets” now provides a new perspective. According to recent research findings, “process capital” is one of the most important assets of a company. In consequence, process capital has to be built up and managed and has to be a major focus of corporate strategy. On the one hand, the process capital can be the basis for strategy development. On the other hand, process capital is essential for strategy implementation. Process capital management (PCM) is the concept that, in addition to a “classical” process management, also focuses on developing and preserving intangible assets. This chapter gives an introduction to process capital. Then, the correlation between process capital and strategy is analyzed. Furthermore, a suggestion is made regarding the further development of process management toward PCM. Finally, the importance of process capital is illustrated by means of a real-life example from Lufthansa.

Small and medium size enterprises and the knowledge economy: Assessing the relevance of intangible asset valuation, reporting and management initiatives

Abstract: Purpose – The growth of the so‐called “knowledge economy”, whereby the primary sources of firm value are claimed to be an increasing reliance upon the exploitation and management of intangible assets that are not reported in company balance sheets, has led to a questioning of the continued relevance of conventional financial reporting and internal management information and control systems. The purpose of this paper is to evaluate the criticisms and proposed alternatives to conventional financial reporting and management control practices. As public policy makers appear to be increasingly convinced that there is an economically damaging “gap” in terms of small and medium size enterprise (SME) stakeholder understanding of intangible asset management, the paper also evaluates the arguments and evidence concerning the applicability and relevance of the problems and proposed alternatives to SMEs.Design/methodology/approach – The paper reviews the criticisms, empirical evidence and proposals to improve financi...

Brands on the Balance Sheet

Abstract: The debate about the value of brands became the driver for the recognition of intangible assets on balance sheets around the world. In 1988, Rank Hovis McDougall (RHM), a leading British food group listed on the London stock exchange, recorded its non-acquired brands as intangible assets on its balance sheet in a defense against a hostile bid by Australian takeover specialist Goodman Fielder Wattie (GFW). The bid came at a time when value focused investment vehicles exploited the value gap created by the relatively low market values of many companies with strong brands. For example, in 1986 the Hanson Trust had acquired Imperial Group for UK£2.3 billion. It then sold the group’s undervalued food portfolio for UK£2.1 billion and retained a highly cash generative tobacco business which net acquisition costs were just about UK£200 million for a business that generated an operating profit of UK£74 million.1

Indicators and standards for measuring intellectual capital of companies in the emerging industry: exemplified by biopharmaceutical companies

Abstract: Under high uncertainty circumstance, valuating the intangible assets of biotech companies is a vital task. This study explores indicators and standards for measuring the intellectual capital (IC) of a sub-biotech industry, biopharmaceuticals, in Taiwan. The methodology of measurement construction was used to generate innovative indicators and standards for IC measurement. Forty nine items in three IC dimensions, including human capital, structural capital and relational capital, were constructed based on interviews with 20 CEOs or senior managers in biopharmaceutical companies. The measurement was found to be different for companies at different developmental stages and has potential for longitudinal use.

Critical success factors of implementation knowledge management process

Abstract: The success on an organization today lies more on its intellectual — intangible asset rather than its physical assts. This paper focuses on critical success factors of KM process implementation in Jordan pharmaceutical industry, which aim to help in the process of using, sharing practices, creating new knowledge. Questioner was designed and sent to high and middle managers of the important pharmaceutical firms in Jordan to investigate of critical success factors in those firms, in order to improve products, services, communicate and collaborative with these firms. The result lead recommends that Jordan firms require to focusing in organization culture that supported to knowledge sharing, across and among employee/business units. Employees need a strong team culture to adaptation with knowledge mangement process. In addition, firms should compile technology environment coped with changes, challenges in the dynamic business environment to support the KM discipline.

Customer Satisfaction, Analyst Stock Recommendations, and Firm Value

Abstract: Although managers are interested in the financial value of customers and researchers have pointed out the importance of stock analysts who advise investors, no studies to date have explored the implications of customer satisfaction for analyst stock recommendations Using a large-scale longitudinal data set, the authors find that positive changes in customer satisfaction not only improve analyst recommendations but also lower dispersion in those recommendations for the firm These effects are stronger when product market competition is high and financial market uncertainty is large In addition, analyst recommendations at least partially mediate the effects of changes in satisfaction on firm abnormal return, systematic risk, and idiosyncratic risk Analyst recommendations represent a mechanism through which customer satisfaction affects firm value Thus, if analysts pay attention to Main Street customer satisfaction, Wall Street investors should have good reason to listen and follow Overall, this research reveals the impact of satisfaction on analyst-based outcomes and firm value metrics and calls attention to the construct of customer satisfaction as a key intangible asset for the investor community

Exploring the HRM/accounting interface on human assets

Abstract: Purpose – This paper seeks is to enhance our understanding of intangible recognition by embracing an artefact‐based approach.Design/methodology/approach – The paper presents an artefact‐based approach to intangible asset recognition, an artefact being a physical and visual representation (typically, documentary) of expended human intellectual and physical creativity. This output orientation (what people create: artefact‐based outputs) is compared to an input orientation (the investment inputs in human “assets”) using artefact‐based asset recognition criteria that have already received some exposure in the marketing literature in respect of brands.Findings – Emphasis is placed on outputs, i.e. what people create, rather than on the more familiar input orientation, which focuses on investments in human assets. When compared to an output orientation, the more familiar input orientation is an unsatisfactory basis on which to recognise human assets.Practical implications – The asset recognition criteria provid...

Integration Through Standards – An Overview of Internal Information Standards for Engineering Asset

Abstract: Contemporary engineering organizations are increasingly becoming reliant on advanced computing technology and information systems to ensure the effective management of their engineering assets. Ensuring the reliability, maintenance and management of assets is dependent on the integration and interoperability of their information systems. A plethora of standards have emerged to assist the horizontal and vertical integration of such systems. Within the asset management field several leading bodies and consortia are focusing on standards development. MIMOSA and ISO are two of the leading standardisation bodies that are active in the development of such standards. Although a number of ‘open’ standards have been developed such standards are not being taken up as rapidly as expected due mainly to the significant investment required in adoption and inertia to change. This not only has implications for interoperability as assets become more complex and difficult to maintain, but also the storage and retrieval of quality data over its lifecycle. This paper provides an overview of information standards relevant to the integration of asset management systems, discusses the directions of the development of these standards and comments on the implications of these advances.

Accounting for Innovation: Lessons Learnt from Mandatory and Voluntary Disclosure

Abstract: In recent decades, Western economies have experienced a shift from the industrial sector to the service sector. Consequently, the major production factors are no longer tangible assets such as materials, machines and equipment but knowledge and information. In this knowledge economy, intangible resources such as brands, customer and supplier relations, know-how, networks and patents play a major role.

Value relevance of information in high-tech industries in Australia: financial and non-financial

Abstract: The aim of the study is to test the value relevance of financial information and non-financial information in high-tech industries in Australia. A cross sectional sample of ninety one companies from the sectors of Pharmaceuticals, Biotechnology and Life Sciences; Technology, Hardware and Equipment and Telecommunication Services of ASX were selected for the analysis. Both financial and non-financial sections of company annual reports were scrutinized to obtain data: earnings, book value and intangible asset disclosures. Value relevance was examined by partially replicating and modifying Ohlson's (1995) Value Relevance Model, by incorporating quantified voluntary disclosures of intangible assets.

National accounting for intangible assets in the knowledge economy

Abstract: Purpose – The purpose of this paper is to review the issues, difficulties, importance for public policy and current initiatives associated with developing a more comprehensive national accounting framework in relation to public and private sector investments in intangible assets.Design/methodology/approach – The paper analyses and evaluates the most salient statistics on intangible asset investments and the implications for public and private sector policy makers.Findings – The UK economy has a high representation of firms and activities that invest in intangible assets that are not traditionally included in national accounts and that their exclusion has a significant impact on the UK's apparent growth and productivity performance.Originality/value – The paper discusses a range of measurement and other difficulties in significantly developing a comprehensive national accounting framework that fully incorporates the impact of intangible asset investments upon national growth and productivity metrics.

Disclosure of Intangible Assets in Indian Drugs and Pharmaceutical Industry

Abstract: In ‘K-economy’, intangible assets are playing an important role in the creation and maximization of wealth of shareholders. The investors also attach greater significance to such assets in evaluating their investments in different companies. This study examines the voluntary disclosure practices of intangible assets of 50 companies in Indian drugs and pharmaceutical industry. Annual reports of the selected companies for the year 2007-08 have been used for the purpose of this study. Content analysis technique has been adopted for the purpose of studying the disclosure of intangible asset information, which has been categorized into human capital, external capital and internal capital. The study concludes that number of employees, training and development, market share, brands, research activities and patents are among the highly disclosed intangible asset attributes. From among the three categories, human capital is the most disclosed intangible asset category. Panacea Biotec Ltd., is the company with highest disclosure score of 73%. Overall disclosure of intangible assets is inadequate and unsystematic in India and there is a vast scope for improvement.

The persistence of green goodwill

Abstract: Civil coercion has its limitations, government regulation is only as effective as enforcement and investors base their estimates of firm value on information available from the firms themselves and from other sources. While voluntary disclosure is construed as being selective or incomplete, negative non-financial news such as details of fines imposed for environmental violation is reflected in lower stock prices for a short duration. This paper evaluates the persistence of goodwill capital for a sample of Indian companies from select industries, graded by their environmental performance. We conclude that investor concern differs across industries and that the correlation of environmental performance with firm valuation is, at best, weak and short-lived. Periodic scrutiny and announcement of industry environmental performance by appropriately equipped independent agencies could help coordinate and sustain stake-holder pressure on industry.