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A performance model to evaluate intellectual capital

Author

Listed:
  • Luminita-Maria Gogan

    () (Politehnica University of Timisoara, Engineering and Management Department, Timisoara, Romania)

  • Anca Draghici

    (Politehnica University of Timisoara, Engineering and Management Department, Timisoara, Romania)

Abstract

We are living today in a knowledge society, a society shaped by the information revolution and advanced by communication technologies. At the dawn of this new age, the concept of intellectual capital has been used for the first time to explain the importance of intellectual resources such as information, knowledge, and experience - in the modern economy. Today the intellectual capital is a key factor in company's profitability and has become the preeminent resource for creating economic wealth. In this environment, the intellectual capital and intangible assets is fundamental to success. Intellectual capital consists of intangible assets, which if used properly become a source of sustainable competitive advantage. To create value intellectual capital components must interact. Evaluation of the intellectual capital is an important activity for any organization operating in a competitive market and envisages the achievement of the intangibile assets but lower costs. The interest on measuring the intellectual capital was caused because accounting, as it is currently practiced, has lost much of its ability to inform as businesses have become more and more knowledge intensive. Traditional methods of valuation, based on accounting principles, where the value of the company's assets is a portion of the value, have systematically undervalued companies. Existence of non-financial standards is crucial to create company value, because accounting rules while constantly revised were originally designed for tangible assets, which is the source of wealth in the industrial period. Literature deals with evaluating intellectual capital in many ways, with many approaches developed over time from studies and research, most aiming at improving the performances of an organization is measuring by different instruments. This article represents a synthesis of the most know models used to evaluate intellectual capital and then implement it in the case of X Company. The findings support the hypothesis that a company's intellectual capital influences favourably the organizational performance, and may indicate future competitiveness.

Suggested Citation

  • Luminita-Maria Gogan & Anca Draghici, 2013. "A performance model to evaluate intellectual capital," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 6(2), pages 101-110, December.
  • Handle: RePEc:rse:wpaper:v:6:y:2013:i:2:p:101-110
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    Cited by:

    1. ?arina Alekseevna Fedotova & Olga Vladislavovna Loseva & Olga Igo-revna Kontorovich, 2016. "Monetary Valuation Of Intellectual Human Capital In Innovative Activity," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 11(2), pages 369-385, June.

    More about this item

    Keywords

    intellectual capital; evaluation; model.;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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