Intellectual capital management scoring

Florinda Matos, Válter Vairinhos, Maria do Rosário Cabrita

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Citation (Scopus)

Abstract

The global economic crisis has placed the focus on the evaluation of companies, only sustained by financial criteria. The European Commission has given much importance to the issue of intangible assets, including those related to more innovative policies. As is known, Small and Medium-Sized Enterprises (SMEs) make up 99% of the European Union productive fabric, which are the main source of innovation. However, with the current financial crisis, the financing of these companies has been very difficult and the risk in business has increased. Many companies, systematically, measure the financial risk but forget the risk inherent in their intangible assets. In most cases, managers have no clear understanding of how their Intellectual Capital (IC) directly impacts their own financial performance. However, there are many evidences that the sustainability of companies is not derived only from its financial performance, but results also from its intangible assets. Therefore, the quality of Intangible Assets Management - measured by some credible metrics accepted by the company's partners - is a very informative indicator of the importance given by the company to the development of its intangible assets and, by the same token, of reliability and sustainability of the company. The empirical relationship between a company's intellectual capital management and financial performance has been studied by many researchers and several methods of account of the intellectual capital have been created, but the process has never been widely accepted by the business community and the practice of measuring intellectual capital has no relevance compared to the financial statements. Our approach results from that fact. Instead of trying a direct IC measurement, we use the quality of IC management practices in the company, captured by the answers from top managers to an appropriate questionnaire and expressed by a score, as a proxy or indicator for IC unknown value. The main objective of this exploratory paper is to review the literature and discuss the importance of creating a valid and sustainable Scoring of intellectual capital management, accessible to companies, as a proxy to a direct IC measurement.

Original languageEnglish
Title of host publicationProceedings of the 17th European Conference on Knowledge Management, ECKM 2016
PublisherAcademic Conferences Limited
Pages576-585
Number of pages10
Volume2016-January
ISBN (Electronic)9781911218029
Publication statusPublished - 2016

Keywords

  • Intellectual capital
  • Scoring
  • SMEs

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  • Cite this

    Matos, F., Vairinhos, V., & Cabrita, M. D. R. (2016). Intellectual capital management scoring. In Proceedings of the 17th European Conference on Knowledge Management, ECKM 2016 (Vol. 2016-January, pp. 576-585). Academic Conferences Limited.