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Understanding Intellectual Capital

The document discusses intellectual capital, which is defined as the difference between a company's market value and the value of its tangible assets. Intellectual capital consists of human capital, structural capital, and relational capital. Human capital refers to the skills and expertise of a company's employees. Structural capital includes infrastructure, processes, databases, and intellectual property. Relational capital encompasses customer and supplier relationships. An intellectual capital audit evaluates a company's intellectual capital to help capitalize on existing intellectual assets and identify opportunities to increase intellectual capital.

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Jan Saher
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65 views2 pages

Understanding Intellectual Capital

The document discusses intellectual capital, which is defined as the difference between a company's market value and the value of its tangible assets. Intellectual capital consists of human capital, structural capital, and relational capital. Human capital refers to the skills and expertise of a company's employees. Structural capital includes infrastructure, processes, databases, and intellectual property. Relational capital encompasses customer and supplier relationships. An intellectual capital audit evaluates a company's intellectual capital to help capitalize on existing intellectual assets and identify opportunities to increase intellectual capital.

Uploaded by

Jan Saher
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Intellectual capital

Intellectual capital is the difference in value between tangible assets (physical and financial) and market value.[1][2] This contrasts with physical and financial forms of capital; all three make up the value of an enterprise. Measuring the real value and the total performance of intellectual capital's components is often a critical part of running a company in the knowledge economy and Information Age, to optimize the stock price using the leverage of intellectual assets.

Classification
Intellectual capital is normally classified as follows:

Human capital, the value that the employees of a business provide through the application of skills, knowhow and expertise. Human capital is an organizations combined human capability for solving business problems. Human capital is inherent in people and cannot be owned by an organization. Therefore, human capital can leave an organization when people leave. Human capital also encompasses how effectively an organization uses its people resources as measured by creativity and innovation. Structural capital, the supportive infrastructure, processes and databases of the organization that enable human capital to function. Structural capital includes such traditional things as buildings, hardware, software, processes, patents, and trademarks. In addition, structural capital includes such things as the organizations image, organization, information system, and proprietary databases. Because of its diverse components, structural capital can be classified further into organization, process and innovation capital. Organizational capital includes the organization philosophy and systems for leveraging the organizations capability. Process capital includes the techniques, procedures, and programs that implement and enhance the delivery of goods and services. Innovation capital includes intellectual properties such as patents, trademarks and copyrights, and intangible assets. Intellectual properties are protected commercial rights such as copyrights and trademarks. Intangible assets are all of the other talents and theory by which an organization is run. Relational capital, consisting of such as customer relationships, supplier relationships, trademarks and trade names (which have value only by virtue of customer relationships) licenses, and franchises. The notion that customer capital is separate from human and structural capital indicates its central importance to an organizations worth.

Audit An intellectual capital audit is an audit of a companys intellectual capital for


monitoring and overseeing the intellectual capital of a firm in order to capitalize on intellectual capital already within the company, and identifying opportunities for increasing the intellectual capital of the company.

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