Intellectual capital is considered a business asset as any organization contributes to employee training, enhancing customers relationship, product development, goodwillIn accounting, goodwill is an intangible asset that is generated when one company purchases another company for a price that is greater than the sum of the company's net identifiable assets at the time of acquisition. It is determined by subtracting the fair value of the company's net identifiable assets from the total purchase price.read more building, etc. it includes human capital, relational capital, structural capital, intellectual property, know-how, copyrights, patents, or any other information or resources that give a competitive advantage. It isn’t easy to measure only goodwill, patents, and copyright to be recognized. If quantifiable, all rest are difficult to measure and hence cannot be recognized in the accounts. You are free to use this image on your website, templates, etc, Please provide us with an attribution link Article Link to be HyperlinkedFor eg: Source: Intellectual Capital (wallstreetmojo.com) Components of Intellectual Capital#1 – Human CapitalHuman capital includes employees, their knowledge and experience, the organization’s relationship with employees, employee training and appraisal, employee satisfaction, employee review of the organization, etc., which all contribute to the organization’s capital. If an organization has a lower employee turnover rate, there are chances of high intellectual capital. Example – Leadership and managerial skills, key employees and their knowledge, professional competencies, work ethics, and work culture, employee training, etc. #2 – Relational CapitalRelational capital includes the organization’s relationship with employees, its investors, its customers, its suppliers, etc. review of all investors, customers, suppliers, and employees. Feedback also matters, and ways of improving and developing contribute to relational capital. For example, an organization with low employee turnover, honest customers, etc., has a high intellectual capital base. Example – Customer satisfaction, relationship with employees, customers and stakeholders, contracts with service providers, reputation in the community, investor feedback rating, etc. #3 – Structural CapitalIt is organization processes, databases, policies, culture, vision, mission and value statement, etc., that contribute to the organization’s capital. For example, if the organization’s work culture is good, it provides quality products, its reputation in the market, its competitive advantage, etc., are real intellectual capital for the organization. Example – Vision, Mission, Structures, goals of the organization, its work culture, its approach towards employees training and providing knowledge, its tools, programs ways of working, and best practices. For a company like Infosys, its employees working with them, work culture, client relationships, investor relationships, key employees, training process, its reputation in the industry, its work culture, vision, mission and values, databases, the experience of employees and management, etc. are the intellectual capital. Similarly, SONY is known for its quality products, so the main intellectual asset for Sony is its quality services and reputation in the market. Measurement
Importance
ConclusionIntellectual Capital is the capital that adds to the wealth of the organization. It includes relational capital, human capital, and structural capital. All the things or procedures that add to the competitive advantage and can be used to create money can be added to the company’s intellectual capital. It is the real wealth of an organization in terms of name, fame, values, etc. Recommended ArticlesThis has been a guide to Intellectual Capital and its Meaning. Here we discuss its top 3 components, examples, measurement, importance, and differences. You can learn more about it from the following articles –
Gabriele Baima (Department of Management, University of Torino, Torino, Italy) Canio Forliano (Department of Political Science and International Relations, University of Palermo, Palermo, Italy) Gabriele Santoro (Department of Management, University of Torino, Torino, Italy)
In the last decades, business and management scholars have given great attention to intellectual capital (IC), which could seem a mature topic, having arrived at its third wave of studies. However, its intersections with the business model (BM) remain an under-investigated topic, and the authors wanted to investigate two research questions (RQs): how the literature addressing IC and BM has evolved so far in the business and management domains? What are possible future research trends of business and management studies regarding IC and BM? This study answers these questions through a systematic literature review (SLR) of 74 peer-reviewed articles in the area of business and management. First, a bibliometric analysis was conducted to evaluate what is the current trend of such publications and what are the most relevant articles, authors, countries and journals. Then, a content analysis was performed to aggregate and systematize the results and identify future lines of research. Results show that most of the studies conducted to date are focused on the aspects of value creation and value capture, with a primary focus on investigating the relationship between IC and firms' performances (e.g. economic, financial and organizational). The relationship between IC and BM has been quite neglected by the literature, or at least it leaves room for further research lines. For example, little is known about how firms use the various IC assets to leverage new forms of value proposition, new target markets or new sources of revenues. This is one of the first papers systematizing the current body of knowledge on this topic and drawing future lines of research.
Baima, G., Forliano, C., Santoro, G. and Vrontis, D. (2021), "Intellectual capital and business model: a systematic literature review to explore their linkages", Journal of Intellectual Capital, Vol. 22 No. 3, pp. 653-679. https://doi.org/10.1108/JIC-02-2020-0055 Emerald Publishing Limited Copyright © 2020, Emerald Publishing Limited |