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Contemporary issues review - Essay Example

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Author : jreinger

Summary

Intellectual capital is the difference between the market value and tangible assets (financial and physical) in value. Measuring the total performance and real value of the components of intellectual capital is a critical part of managing an organization in the age of information and knowledge economy, and to optimize the price of stock using intellectual asset leverage (Huang et al., 2013). …

Extract of sample
Contemporary issues review

Human capital cannot be owed by an organization because it is inherent in people, hence when people leave organizations, human capital leaves too. It encompasses how organization utilizes its people resources effectively as measured by innovation and creativity; structural capital, this is the supportive processes, infrastructure and organization’s databases which enhances the functionality of human capital. Structural capital may include hardware, buildings, software, patents, processes, information system, organization’s image, proprietary databases, and trademarks. Structural capital can also be classified into process, organization, and innovation capital. Intellectual properties are protected by trademarks and copyrights. Intangible assets include all other theory and talents through which an organization is run; and relational capital, which consists of supplier and customer relationships, trade names and trademarks, franchises, and licenses (Tayles et al., 2007). The perception that customer capital is distinct from structural and human capital shows its central importance to the worth of an organization. Even though intellectual capital may be similar to tangible assets in its potential to generate future cash flow, it is different radically from tangible capital in various respects: intellectual assets are not rival assets. Intellectual assets can be multiplexed unlike tangible assets that can only do one thing at a time; relational capital and human capital cannot be owned and are shared with suppliers, customers and employees. ...
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