Making Sense of Intellectual Capital

Peter Drucker has introduced us all to the knowledge era, where knowledge is the primary resource and intangibles (intellectual capital resources and assets) are now largely recognized as the most important sources of organizations' competitive advantage. With the recognition of the importance of Intangibles comes the problem of how to properly identify them and assign them a value within the corporation. This is an area of concern in 5 fields: 1) accounting and financial reporting, 2) performance measurement and management, 3) valuation in the finance field, 4) the Human Resources field in terms of management, strategy, and planning, and 5) Intellectual Capital. Over the past eight years, over 25 methods have been proposed for the valuation of intangibles coming out of these 5 fields. In this book, Andriessen evaluates 25 existing methods of intangible valuation according to highly developed criteria. In performing his evaluations, Andriessen synthesizes the state of the art research from these fields based on extensive research. He then presents his own method for valuing intangibles, which he began developing and testing as a Senior Manager at KPMG Knowledge Advisory Services in The Netherlands. He relates six case studies in which this method was tested in actual companies, carefully reviews the results of his tests, and then concludes by offering a new and improved method for valuing intangibles in his Weightless Wealth Toolkit, a complete step-by-step process for identifying, valuing, and managing Intangibles to help managers operate successfully in the Intangible Economy.

Autorentext

Daniel Andriessen

Inhalt

Table of contents
Preface and Acknowledgements xix

1. Objective: Valuation and Measurement in the Intangible Economy
   1.1 Introduction
   The Intangible perspective
   The transformation of the economy
   Seven characteristics of the Intangible Economy
   Drivers of the Intangible Economy
   The Intellectual Capital community
   Valuation and measurement of intangibles
   Value
   Valuation
   Four ways to determine value
   Objective and problem
   My objectives
   Problem to tackle
   Methodology
   Practicing management research as a design science
   Using the developing multiple case study
   Structure of the book
2. Methodology: The Science of Designing Practical Methods
   Introduction
   Making sense of the social world
   Distinctions make sense
   The world doesn't speak
   We know according to the way we are and the way we feel
   The social world does not sit still
   Social science
   Anything goes?
   How to test an empirical proposition
   How to test a practical proposition
   Bringing the two together
   Science follows its own rules
   Management research
   The subject of management research
   The scientific nature of management research
   My study
   The reflective cycle used in this study
   Difficulties in applying the reflective cycle
   The use of reconstructed logic
3. Legacy: Methods for the Valuation and Measurement of Intangibles
   Introduction
   What: Distinctions & definitions
   Intellectual Capital
   Intangible Assets
   Human Resources and Human Assets
   Reflection
   Why: Problems & consequences
   Improving internal management
   Improving external reporting
   Statutory and transactional issues
   Reflection
   How: Solutions & results
   Financial valuation methods
   Value measurement methods
   Value assessment methods
   Measurement methods
   Reflection
   Implications for the requirements of a new method
4. Design: Draft of a New Method
   Introduction
   Request for proposals
   Request
   Evaluation
   Iteration 1
   Design
   Evaluation
   Iteration 2
   Design
   Evaluation
   Iteration 3
   Design
   Evaluation
   Iteration 4
   Problem definition
   Requirements
   Design
5. Test: Trying Out the New Method
   Introduction
   Bank Ltd
   Context & problem definition
   Specific requirements & design
   Implementation & results
   Additions to the design
   Reporting to the client
   Evaluation & modifications
   Electro Ltd.
   Context & problem definition
   Specific requirements & design
   Implementation & results
   Reporting to the client
   Evaluation & modifications
   Automotive Ltd.
   Context and problem definition
   Specific requirements & design
   Implementation & results
   Evaluation & modifications
   Logistic Services BU
   Context & problem definition
   Specific requirements & design
   Implementation & results
   Reporting to the client
   Evaluation & modifications
   Professional Services LLP
   Context & problem definition
   Specific requirements & design
   Implementation & results
   Reporting to the client
   Evaluation & modifications
   Consulting Dept.
   Context & problem definition
   Special requirements & design
   Implementation & results
   Reporting to the client
   Evaluation & modifications
   Result of the tests
   The method and its requirements
   The success of the method
6. Lessons Learned: Contributions to Intellectual Capital Research
   Introduction
   Lessons about the method
   The application domain of the method
   The strengths and mechanisms of the method
   The weaknesses of the method
   Final modifications to the method
   Lessons about valuing intangible resources
   Valuing intangibles requires values
   Valuing intangibles requires a beholder
   Valuing intangible resources does not require money
   Valuing intangibles requires identification and demarcation
   Valuing intangibles requires diagnosis
   Valuing intangibles requires methods
   Lessons about practicing IC research as a design science
   Reconciling the rigor-relevance dilemma in IC research
   Determining the effect of the implementation
   Determining the contribution of the method
   The analyst versus the researcher
   Implications for future IC research
   Valuing and improving problem definitions
   Explaining and improving success-rate
   Explaining and improving the impact of numbers
   Epilogue
   Appendix A. Overview of 25 Valuation and Measurement Methods
   A.1 Balanced Scorecard (Kaplan & Norton)
   A.2 Calculated Intangible Value
   A.3 Citation-Weighted Patents
   A.4 Economic Value Added (Stewart)
   A.5 Holistic Value Approach HVA (Roos)
   A.6 Human Resource Accounting
   A.7 IC Audit (Brooking)
   A.8 IC-Index (Roos)
   A.9 Inclusive Value Methodology(TM) (M'Pherson)
   A.10 Intangible Asset Monitor (Sveiby)
   A.11 Intangibles Scoreboard (Lev)
   A.12 Intellectual Capital Benchmarking System (Viedma)
   A.13 Intellectual Capital dynamic Value (Bounfour)
   A.14 Intellectual Capital Statement (Mouritsen et al.)
   A.15 iValuing factor (Standfield)
   A.16 Konrad Group
   A.17 Market-to-book ratio
   A.18 Options Approach
   A.19 Skandia Navigator (Edvinsson)
   A.20 Sullivan's Work
   A.21 Technology Factor (Khoury)
   A.22 Tobin's q (Tobin)
   A.23 Valuation approaches
   A.24 Value Added Intellectual Coefficient VAIC(TM)(Pulic)
   A.25 Value Chain Scoreboard (Lev)
   Appendix B. Weightless Wealth Toolkit
   B.1 How to Use the Toolkit
   B.2 Phase One: Do Intake
   B.3 Phase Two: Identify Intangible Resources
   B.4 Phase Three: Carry out Value Assessment
   B.5 Phase Four: Perform Financial Valuation
   B.6 Phase Five: Develop Management Agenda
   B.7 Phase Six: Report Value Dashboard
   Glossary of Terms
   Bibliography
   About the Author
   Index