Paper intellectual capital is the combined knowledge of employees within an organization (Intellectual, 2013).
This knowledge is to add value to the organization in ways such as increase profits, provide products or services to customers, gain competitive advantage, improve processes, or other types of capital. This paper will show five different types of intellectual capital that adds value to an organization. It will provide examples of each intellectual capital, whether that capital is identifiable or unidentifiable as an asset, and how each provides value to the organization.
The first intellectual capital to discuss is customer capital. Customer capital is the relationship the organization builds and maintains with its customers (Customer, 2013).
The customer capital relationships reflects the customer’s loyalty to the organizations products or services it provides. For example, like most CPG (Consumer Packaged Goods) companies, toilette paper has weak brand loyalty that reflects in lower customer capital (Stealings, 2010).
This is because the main market leaders in toilette paper promise and provide customer the same amount of softness, discounts, and coupons, which leads to brand switching.
The Essay on Human Capital The Talent Skills And Knowledge Of An
Human capital - the talent, skills and knowledge of an organization - is one of those buzzwords that makes the rounds periodically. The concept of leveraging the human resources of an organization is not new, but the reality is that few companies realize the importance of looking beyond employees as merely an expense and recognizing the intrinsic value of human capital. The key is to calculate the ...
Customer capital is not an identifiable asset in an organizations balance sheet or other financial statements. The potential value of customer capital to an organization is that with increase brand loyalty, there is increase in volume sales and revenue. The second intellectual capital to discuss is human capital. human capital is the combined knowledge, experiences, and skills of the organizations employees (Human, 2013).
Organizations rely on its human capital not only to get the work done but also to contribute to the organizations growth through creativity and innovation within a competitive market.
For example, Apple is known for hiring talented and creative people, such as Steve Jobs, for with his vision and intellect catapults Apple into one of the largest consumer electronics company in the world (Jobs, 2013).
Although human capital is unidentifiable as an asset, organizations know it is one of the most important intellectual capitals to manage because it does not directly belong to the organization and can be lost when an employee leave’s an organization.
The value of human capital may be hard to measure, yet possessing the right people working together can help an organization meet its vision and goals. The third intellectual capital to discuss is structural capital. structural capital supports human capital in an organization through such things as information systems, policies, processes, patents, and other structural capital (Structural, 2013).
For example, many organizations have patents on products to protect its capital from other organizations from using its product designs or technology to make a profit of its own.
For example, according to a New York Times article by Jad Mouawad (2012) that Marvell Technology Group was found “guilty for infringing on a pair of patents from Carnegie Mellon University that increases the accuracy of hard drive circuits to read data on high-speed magnetic disks” paying $1. 17 billion dollars for the crime. Some structural capital can be identifiable, such as systems and patents because these types of structural capital are sold to others, therefore earning revenue and tractable in financials.
The Essay on Management: Human Resources
... order to make sure that overall intellectual capital is retained within the organization. Intellectual capital, in both the structural and human forms, comes together with customer knowledge. ... organizational prosperity. · Products and processes: which the organization is dealing in. · Culture of the organization These elements together constitute the intellectual capital for any kind ...
Structural capital holds value to organizations ability to produce and improve products and services for its customers, and therefore increasing its revenue. The fourth intellectual capital to discuss is intellectual property. Intellectual property is the knowledge, creativity, and ideas of employees who have profit-making value that has safeguards through copyrights, trademarks, patents, and other protectable (Intellectual Property, 2013).
Examples of intellectual property are formulas, receipts, inventions, software, and brand names.
For example, a secret receipt is very valuable to an organization because it is a blueprint for a product it sells to its customers. The commercial for Bushes Baked Beans talks directly about how important its secret receipt is to its product and therefore its business. Some intellectual property can be identifiable, such as secret receipts because it can be sold for money and tractable in business financials as revenue. Intellectual property is very valuable to organizations for its potential to create new products and earn revenue and volume growth.
The last intellectual capital to discuss is research and development. Research and development combines both basic and applied research to develop new products, improve services, discover new solutions (R&D, 2013).
Areas that represent research and development are researchers, scientists, and information technology specialists (Berry, 2004).
Research and development are not identifiable because there is no market value and cannot be sold. It is very important in today’s organizations because it drives new innovative ideas that can help an rganization improve its competitive advantage and generate revenue growth adding value to the organization. Conclusion With the knowledge, experience, expertise, relationships, processes, technology, and other professional skills that intellectual capital provides, it is undeniable that intellectual capital is valuable assets to any organization. Therefore, organizations are beginning to classify intellectual capital into its capital costs because of the additional investment it are making into intellectual capital. Intellectual, 2013) The challenge is how organizations today measure, interpret, manage, and develop intellectual capital. ? References Berry, John. (2004).
The Review on Research on the Relationship Between Intellectual Capital and Company Performance
An Empirical Analysis Based on Panel Data FAN Libo YUAN Xin WANG Su School of Business, University of International Business and Economics, P. R. China, 100029 Abstract: It is well known that knowledge economy is mainly based on intellectual capital. Intellectual capital plays a key role in enterprise’s value promotion. In fact, the good intellectual capital control system can bring the positive ...
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