Intellectual Capital

Intellectual capital
Q. What is intellectual capital?

Intellectual capital is the value of a company's employee knowledge, skills, business training, or
any proprietary information that may provide the company with a competitive
advantage.Intellectual capital is considered an asset, and can broadly be defined as the
collection of all informational resources a company has at its disposal that can be used to drive
profits, gain new customers, create new products, or otherwise improve the business. It is the
sum of employee expertise, organizational processes, and other intangibles that contribute to a
company's bottom line.
Q. Types of business capital.

There are three types of business capital:
Financial capital:
Financial capital refers to a company’s purchasing power in cash, credit, or other funding.
Corporations and individual entrepreneurs use it to invest in, create, or expand a business.
Hence its purpose is to acquire or purchase the physical capital necessary for the production of
goods and services.
Fixed capital:
Fixed capital is the value of capital assets available for production purposes at a given point in
time. All capital goods are included which are accounted for in gross fixed capital formation.
This is measured by the value of acquisitions less disposals of new or existing fixed assets.
Intellectual capital:
Intellectual capital is the total value of all of an organization's intangible assets. It includes
human capital but goes beyond it. It takes a holistic view of all the aspects of a business that give
it a competitive advantage.
Q. Types of intellectual capital.
Intellectual capital is broadly divided into three main categories:
Human capital
Human capital refers to the value of the human resources within an organization. It includes
all the skills, know-how, core competencies, and experience of each employee. This value
isn’t reflected in the company’s balance sheet.
Relational capital
Relationship capital encompasses all of the relationships that an organization has, which include
its employees, its suppliers, its customers, its shareholders, and so on.
Structural capital
Structural capital refers to the core belief system of an organization, such as its mission
statement, company policies, work culture, and its organizational structure.
Q. Define organizational value.

Organizational values are the guiding principles that provide an organization with purpose and
direction. They help companies manage their interactions with both customers and employees.
Q. Strategic alliance.
A strategic alliance is an arrangement between two companies to undertake a mutually
beneficial project while each retains its independence. The agreement is less complex and less
binding than a joint venture, in which two businesses pool resources to create a separate
business entity.
Q. Merger.
A merger is a business deal where two existing, independent companies combine to form a new,
singular legal entity. Mergers are voluntary.
Q. Acquisitions.
An acquisition is when one company purchases most or all of another company's shares to gain
control of that company. Purchasing more than 50% of a target firm's stock and other assets
allows the acquirer to make decisions about the newly acquired assets without the approval of
the company’s other shareholders.
Q. Relationship between intellectual capital and knowledge management.
Intellectual capital has increasingly become one of important key driver of competitive
advantages in the organization. It has been recognized as a framework to analyze the value
contribution of intangible assets in an organization. At the same time, to ensure the
competitiveness of organizations, knowledge management is also very crucial as a fundamental
activity. This may help the organization to derive their best business value from their existing
knowledge assets and attempt to establish competitive advantages asset where that is necessary.
Based on Karl M. (1997) to stay competitive and successful, experience shows that organizations
must create and sustain a balanced intellectual capital portfolio. This paper discusses about the
role of intellectual capital in managing the knowledge in the organization. It discusses the
concept of knowledge management and intellectual capital in order to assist the readers to
understand about the topic. The authors also attempt to describe how the components of
intellectual capital that consisted of four components which are human capital, structural capital,
customercapital and competitor capital are linked to manage the organization assets.
Q. Role of intellectual capital on knowledge management design.

Intellectual Capital

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Intellectual Capital

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Intellectual capital

Q. What is intellectual capital?

Q. Types of business capital.

Q. Define organizational value.

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