Page 30 - Intangible value

Management as
a tool in value
creation
ASSOCIATE PROFESSOR ANU PUUSA / UNIVERSITY OF EASTERN FINLAND
The role of intangible capital has become stronger along with the growing level of understanding and knowledge about increasing the productivity of work. The fast de- velopment of solutions and channels in information technology as well as the
lished. Intangible capital can be de ned as non- nan- cial capital, which is not concrete but which has value and provides future pro ts.21 It is knowledge that can be turned into value.22 It can be thought to refer to such or-
fast progress of digitalisa-
tion in turn speed up the
increase in productivity. We
have moved from a pro-
duction-based economy
to a knowledge- and com-
petence-based economy
while also moving from an
earnings logic that empha-
sises the significance of
tangible assets to one that
emphasises intangible cap-
ital. In that economy and
earnings logic people, their
knowledge, skills, compe-
tence and especially their
willingness to share their
competence with the organisation determines the com- pany's success. Both the observations in practice about the effectiveness of intangible capital and research re- sults support the conclusion that the different parts of intangible capital play a central role in the company's performance.20 Many parts of intangible capital also have an in uence on employees' well-being and coping at work.
DEFINITION OF INTANGIBLE CAPITAL
But what is it we are talking about when we talk about in- tangible capital? Although this subject-area has proved to be important in practice, intangible capital as a concept is still challenging and its meaning still somewhat unestab-
ganisational resources that are mainly not considered assets in the nancial state- ments but which still have a signi cant in uence on the result of the company measured by all indicators. Dependency of time, place, situations, persons and or- ganisations is a character- istics of intangible capital as a phenomenon – in other words it is case-speci c and consequently uncertain.
Because there are numer- ous de nitions, of which none have been agreed on
unanimously, it might easier to approach the concept of intangible capital by investigating the different elements related to it. At least three dimensions are often associat- ed with it: human, structural and relational capital. Value creation is central to all these areas and to their interac- tion. Value is created to customers and as a consequence to the company itself. From the company's point of view, value can be realised as tangible capital, revenue, increas- ing market share or some other additional value. From the customer's point of view, the bene t can also be realised in many ways, intangibly or tangibly, for example, as a positive emotional experience. From the point of view of members of the organisation, the realised value can in turn mean a stronger experience of meaningfulness of work and the work community.
Making use of
human potential such as expertise and experience requires the right kind
of atmosphere and leadership practices, which enable and encourage employees, for example,
to share the valuable tacit knowledge they have gathered.
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