scholarly journals A Normative Approach to Valuation, Value Enhancement and Financial Statement Reporting of Intellectual Capital

2020 ◽  
Vol 3 ◽  
pp. 25-52
Author(s):  
Michael So ◽  
◽  
Janek Ratnatunga
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Theoretical Foundation ◽  
Empirical Studies ◽  
Economic Value ◽  
Financial Statement ◽  
Sustainable Competitive Advantage ◽  
Normative Approach ◽  
Reporting Framework ◽  
Tangible Assets

Intellectual capital (IC) is increasingly seen as an integral part of a firm’s value-creating processes and an essential strategic asset in creating corporate sustainable competitive advantage (Bukh, 2003; Chen, Cheng & Hwang, 2005). Nevertheless, reporting on IC is currently inconsistent, incomparable, and incomplete because of a lack of consistent guidance. This paper presents a normative IC valuation and reporting framework based on the Capability Economic Value of Intangible and Tangible Assets (CEVITA) approach (Ratnatunga, Gray & Balachandran, 2004). The proposed framework enables the application of CEVITA to the valuation of intellectual capital capability and provides a theoretical foundation for future empirical studies in relation to IC valuation and reporting.

scholarly journals Bridging Intellectual Capital and SMEs Internationalization through the Lens of Sustainable Competitive Advantage: A Systematic Literature Review

2019 ◽  
Vol 11 (9) ◽  
pp. 2510 ◽  
Author(s):  
Elena-Mădălina Vătămănescu ◽  
Elena-Alexandra Gorgos ◽  
Alexandru Mihai Ghigiu ◽  
Monica Pătruț
Keyword(s):  
Literature Review ◽  
Competitive Advantage ◽  
Systematic Literature Review ◽  
Intellectual Capital ◽  
Mixed Methods Research ◽  
Empirical Studies ◽  
Interdisciplinary Studies ◽  
Sustainable Competitive Advantage ◽  
Integrative Research ◽  
New Research

The aim of the current paper is advance a comprehensive framework meant to bridge three major concepts, namely intellectual capital (IC), the internationalization process of small and medium-sized enterprises (SMEs) and the achievement of sustainable competitive advantage. The paper stresses upon a managerial perspective within the internationalization context, investigating the human, structural and relational capital apposite to managers or entrepreneurs. By directly addressing the relationships among the constructs, the endeavor is complementary to previous systematic reviews on similar topics which tangentially discuss the conceptual triad and thus proposes an integrative research agenda for future interdisciplinary studies straddling the fields of management, business, entrepreneurship and sustainability. In terms of methodology, a systematic literature review was envisaged, by applying a stepwise approach and multifold criteria. Over 100 scientific articles published in peer-reviewed journals were scrutinized and considered in the analysis. The literature review revealed that conceptual papers in the field are scarce despite the variety of their aims and approaches. The quantitative-based empirical studies prevail over the qualitative ones, while mixed methods research designs are scant. In terms of content, the extant studies fall short to advance research and structural models testing and assessing the specific relations among constructs and avail new research avenues focused on the underlying processes of SMEs internationalization by means of intellectual capital harnessing and sustainable competitive advantage achievement.

scholarly journals The Impact of Intellectual Capital on the SMEs Performance: A Study of the Romanian Central Region SMEs

2021 ◽  
Vol 16 (1) ◽  
pp. 198-209
Author(s):  
Ramona Todericiu
Keyword(s):  
Competitive Advantage ◽  
Organizational Performance ◽  
Intellectual Capital ◽  
Business Performance ◽  
Intangible Assets ◽  
Sustainable Competitive Advantage ◽  
Economic Competition ◽  
Start Up ◽  
Tangible Assets ◽  
The Impact

Abstract The 21st century is the century of change and maybe one of the most important changes in the organizations’ life is the transition from focusing on the development of the tangible assets to the development of the intangible assets and the interest for attracting human resources capable to generate performance. The survival of many companies depends on their willingness and capacity to adapt to such changes. (Abdulaali, 2018) In this dynamic and complex economic system, the intangible assets of organizations become primary, being decisive for the organizations’ performance. In the new economic competition, intangible assets provide a sustainable competitive advantage, intellectual capital and intangible assets representing the key factor in company profitability and success. In the knowledge based society, intellectual capital has more value for organizations than tangible assets and knowledge becomes a permanent source of competitiveness (Bhatti, Zaheer, 2014). It is considered by specialists a valuable and strategic resource, since the success of organizations depends on creating, discovering, storing, disseminating, measuring and developing knowledge. The main objective of the research presented in this paper is to offer an overview on the specific problems and needs of the entrepreneurs financed through the Romania Start-up Plus programme, part of Start-UP Hub: The Entrepreneurs Laboratory Cod SIMS: 105648. A primary target of this research is to examine the components of intellectual capital and the way in which the intellectual capital influences the small business performance. The majority of the researchers agree that intellectual capital is directly connected to the performance of the SMEs sector. The results of our analysis shows the fact that intangible assets influence business development in various ways, such as increasing competitive advantage, expanding employee competency and improving organizational performance.

scholarly journals How Can Agricultural Corporate Build Sustainable Competitive Advantage through Green Intellectual Capital? A New Environmental Management Approach to Green Agriculture

2021 ◽  
Vol 18 (15) ◽  
pp. 7900
Author(s):  
Chulin Pan ◽  
Yufeng Jiang ◽  
Mingliang Wang ◽  
Shuang Xu ◽  
Ming Xu ◽  
...  
Keyword(s):  
Environmental Management ◽  
Competitive Advantage ◽  
Intellectual Capital ◽  
Moderated Mediation ◽  
Mediation Effect ◽  
Relational Model ◽  
Management Approach ◽  
Sustainable Competitive Advantage ◽  
Green Innovation ◽  
Mediation Effects

Based on natural resource-based theory, this study constructed a relational model between green intellectual capital, green innovation, and an agricultural corporate sustainable competitive advantage. The samples included a total of 341 agricultural companies in China, and multiple regression methods are used for the analysis. The results showed that green product innovation and green process innovation had a mediation effect between green human capital, green structural capital, green relational capital, and the sustainable competitive advantage of agricultural corporate. Beyond the simple moderation effect, a new integrated moderated-mediation effect model was established. It was shown that environmental leadership, green organizational identification, and green dynamic capability had different moderated-mediation effects under different conditions. The study is expected to close the previous research gaps and insufficiency in agricultural corporate environmental management and green agricultural. The empirical results and conclusions bring enlightenment and meaningful theoretical guidance to managers, researchers, practitioners, and policy makers in the green and sustainable development of agricultural corporates. The new environmental management path can help agricultural corporates conduct green innovation effectively, adapt to the green agricultural products market, and achieve sustainable competitive advantage. Ultimately, this will help to accelerate the development of green agriculture.

Intellectual Capital

2010 ◽  
pp. 237-252 ◽  
Author(s):  
Maria do Rosário Cabrita ◽  
Virgílio Cruz Machado ◽  
António Grilo
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Sustainable Competitive Advantage ◽  
Central Question ◽  
Organisational Performance ◽  
Holistic Model ◽  
Knowledge Based ◽  
Study Support ◽  
Key Driver ◽  
Strategic Perspective

With the rise of the “new economy”, knowledge became a most valuable resource. Accepting knowledge as a resource suggests that knowledge can be acquired, transferred, combined and used, and it may be a potential source of sustainable competitive advantage. In this context, knowing how an organization creates value, based on its potential of knowledge, became a central question in management research. Under a strategic perspective, knowledge that creates value is defined as intellectual capital, the application of which will give organisations sustainable competitive advantage. Therefore, identifying, measuring and managing intellectual capital is crucial for corporate innovation and competitiveness. The purpose of our study is to examine the interrelationships and the effects of interaction between intellectual capital components and organisational performance, and defines how knowledge creates value. The study is developed in the context of Portuguese banks, an industry where differentiation of products and services almost exclusively hinges on the continuous rejuvenation of the underlying knowledge base. Empirical findings from this study support the propositions that intellectual capital is a key driver of organisational performance and that a knowledge-based perspective holds a more holistic model of organisations’ value creation.

scholarly journals The relationship between investments in lean practices and operational performance

2019 ◽  
Vol 39 (3) ◽  
pp. 406-428 ◽  
Author(s):  
George Onofrei ◽  
Jasna Prester ◽  
Brian Fynes ◽  
Paul Humphreys ◽  
Frank Wiengarten
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Empirical Studies ◽  
Least Square ◽  
Operational Performance ◽  
Complex Relationship ◽  
Content Type ◽  
Synergetic Effects ◽  
Knowledge Based ◽  
Lean Practices

PurposePrior research has shown that operational intellectual capital (OIC) and investments in lean practices (ILP) lead to better operational performance. However, there have been no empirical studies on the synergetic effects between OIC components and ILP. More specifically, the question – can the efficacy of ILP be increased through OIC? – has not been studied. Accordingly, the purpose of this paper is to report the empirical results of potential synergetic effects between OIC, as a knowledge-based resource, and ILP.Design/methodology/approachThe empirical data used for this study were drawn from the fifth round of the Global Manufacturing Research Group survey project (with data collected from 528 manufacturing plants). The hypotheses are empirically tested using three ordinary least square (OLS) models.FindingsThe authors’ findings highlight the importance of leveraging a system of complementary knowledge-based resources (OIC dimensions) and addresses the need for the reformulation of lean theory in terms of the emergent knowledge-based view of the firm. The results facilitate greater understanding of the complex relationship between ILP and operational performance. Building on the contribution of Menoret al.(2007), the authors argue that OIC represents a strategic knowledge-based resource that is valuable, hard to imitate or substitute and, when leveraged effectively, generates superior operational and competitive advantage.Practical implicationsFrom a managerial standpoint, this study provides guidelines for managers on how to leverage OIC to enhance the efficacy of ILP. The authors argue that firms consider investing in OIC to increase the return from ILP, which, in turn, will enhance their operational performance and provide competitive advantage. The authors findings provide strong evidence of the importance of human, social and structural capital to enhance the efficacy of ILP.Originality/valueThis is the first research paper that extends the application of the intellectual capital theory in lean literature, and argues that the OIC contributes to the efficacy of ILP. The analysis facilitates greater understanding of the complex relationship between OIC dimensions, ILP and operational performance.

IMPROVING THE COMPETITIVENESS OF THE SMALL AND MEDIUM ENTERPRISES (SME) OF TROSO WEAVING CRAFT IN JEPARA REGENCY USING CAPITAL INTELLECTUAL ANALYSIS

2018 ◽  
Vol 2 (1) ◽  
pp. 35-46
Author(s):  
Ngatindriatun Ngatindriatun
Keyword(s):  
Human Capital ◽  
Competitive Advantage ◽  
Intellectual Capital ◽  
Structural Equation ◽  
Small And Medium Enterprises ◽  
Simple Random Sampling ◽  
Intellectual Ability ◽  
Sustainable Competitive Advantage ◽  
Structural Capital ◽  
Customer Capital

The aim of the research was to analyze the management of the SMEs of Troso Weaving Craft in Jepara Regency in relation to the human resources. In order that the SMEs can compete with today’s industry, the SMEs are required to be able to run their businesses professionally and to innovate, as well as to implement new breakthroughs. Therefore, the management of the SMEs needs to develop their intellectual ability and competitive advantage for their products. Intellectual capital is the intangible resource that can be used as the source of sustainable competitive advantage. The measurement of IC associated with competitive advantage was made against the elements of human capital, structural capital and costumer capital. Hence,this research discussed a model that relates the intellectual capital of the SMEs to the competitive advantage of the SMEs of Troso Weaving Craft in Jepara Regency. For the development of the model and hypothesis, the research used the Structural Equation Modelling (SEM), by taking the samples of 157 SMEs of Troso Weaving Craft selected in simple random sampling. The analysis results show that human capital, structural capital, and customer capital have the effect on competitive advantage. It means that the improvement of the competitive advantage for Troso Weaving Craft requires trainings in the managements of production, distribution, marketing and finance for all individuals and employees of the SMEs.

An Efficiency Model for Assessing Intellectual Capital

2021 ◽  
pp. 84-91
Author(s):  
Aleksey Myasoedov
Keyword(s):  
Intellectual Capital ◽  
Intangible Assets ◽  
Knowledge Society ◽  
Favorable Effect ◽  
Sustainable Competitive Advantage ◽  
Economic Wealth ◽  
Tangible Assets ◽  
Key Factor ◽  
Essential Resource ◽  
Knowledge Intensive

Today we live in a knowledge society, a society shaped by the information revolution and developed by communication technologies. At the dawn of the new era, the concept of intellectual capital was first used to explain the importance of intellectual resources - such as information, knowledge, and experience - in the modern economy. Today, intellectual capital is a key factor in the company's profitability and has become an essential resource for creating economic wealth. In this environment, intellectual capital and intangible assets are fundamental to success. Intellectual capital consists of intangible assets that, when properly used, become a source of sustainable competitive advantage. To create value, the components of intellectual capital must interact. The assessment of intellectual capital is an important activity for any organization operating in a competitive market, and involves the achievement of intangible assets, but at a lower cost. The interest in measuring intellectual capital was caused by the fact that accounting, as it is currently practiced, has largely lost its information capacity as enterprises have become more and more knowledge-intensive. Traditional valuation methods based on accounting principles, where the value of a company's assets is a fraction of the value, have systematically undervalued companies. The existence of non-financial standards is critical to the company's value creation, as the accounting rules, under constant review, were originally developed for tangible assets, which are a source of wealth in the industrial period. In the literature, the assessment of intellectual capital is considered in different ways, with many approaches developed over time based on research and research, most of which are aimed at improving the performance of an organization, measured by different tools. This article is a synthesis of the most well-known models used to evaluate intellectual capital and its subsequent implementation in the case of Company X. The results obtained confirm the hypothesis that the intellectual capital of a company has a favorable effect on the results of the organization's activities and may indicate future competitiveness.

scholarly journals The Theory of Real Options as Theoretical Foundation for the Assessment of Human Capital in Organizations

2007 ◽  
Vol 21 (3) ◽  
pp. 274-294
Author(s):  
Isabell Welpe ◽  
Stephan Lutz ◽  
Erich Barthel
Keyword(s):  
Human Capital ◽  
Real Options ◽  
Theoretical Foundation ◽  
Empirical Studies ◽  
Economic Value ◽  
Real Options Theory ◽  
Central Value ◽  
Future Evaluation ◽  
Traditional Approaches ◽  
Options Theory

The human capital represented by corporate employees involved in the information and knowledge economy is becoming an increasingly central value-creating factor in global competition. However, in contrast to other value-creating factors, human capital is more difficult to measure, evaluate and manage. Due to human capital's great importance for economic value creation, a series of studies on human capital evaluation have been published during the last few years. This paper discusses why so many traditional evaluation methods are only partly appropriate for categorizing, analyzing and evaluating human capital's special characteristics. In particular, it is difficult for many traditional approaches to integrate notions of flexibility and options with regard to the human capital of companies. Our result shows that the real options theory provides a theoretical framework for the evaluation of human capital and allows a differentiated analysis that, on a qualitative basis, enables investments in uncertainties that are associated with human capital. This theory thus forms the foundation for the quantification of human capital's inherent opportunities and risks. Consequently, this paper provides approaches for the future evaluation of human capital and a conceptual context for empirical studies.

scholarly journals Does Intellectual Capital Spur Sustainable Competitive Advantage and Sustainable Growth?: A Study of Chinese and Pakistani Firms

SAGE Open ◽  
2021 ◽  
Vol 11 (1) ◽  
pp. 215824402199670
Author(s):  
Yuqiu Lu ◽  
Guowei Li ◽  
Zhe Luo ◽  
Muhammad Anwar ◽  
Yunju Zhang
Keyword(s):  
Human Capital ◽  
Competitive Advantage ◽  
Significant Influence ◽  
Intellectual Capital ◽  
Sustainable Growth ◽  
Sustainable Competitive Advantage ◽  
Chinese Firms ◽  
Mediating Role ◽  
The Impact ◽  
The Relationship

Steered by the resource-based view theory, this study scrutinizes the impact of the dimensions of Intellectual Capital (IC)—human capital, structural capital, and relational capital (RC)—on sustainable growth (SG) with the mediating role of Sustainable Competitive Advantage (SCA). We gathered data from 2010 to 2017 of 90 listed firms of China and Pakistan, respectively, and applied EVIEWS. The results indicate that IC plays a significant role in the SG of Chinese and Pakistani firms. IC has a significant influence on differentiation strategy (DS) in Chinese firms whereas only RC has an insignificant influence on DS in Pakistani firms. IC has a significant influence on cost leadership strategy (CLS) in Pakistani firms whereas structural and RC have an insignificant influence on the SG of Chinese firms. In terms of the mediating role, DS partially mediates the relationship between IC and SG in Pakistani firms while it only fully mediates the path between RC and SG in Chinese firms. CLS partially mediates the relationship between IC and SG in Chinese firms while it fully mediates the association between human capital and SG in Pakistani firms. This study recommends Chinese and Pakistani firms to encourage investment in IC to gain SCA and SG in the turbulent markets. To concise, this research advises Chinese firms to invest a satisfactory amount in human capital as compared with structural and RC. However, Pakistani firms should focus on IC to gain SCA and SG.

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