Intangible asset contribution to company performance: the “hierarchical assessment index”
| Date | 10 April 2009 |
| Pages | 40-54 |
| DOI | https://doi.org/10.1108/03055720910962434 |
| Published date | 10 April 2009 |
| Author | Michele Grimaldi,Livio Cricelli |
| Subject Matter | Information & knowledge management |
Intangible asset contribution to
company performance: the
“hierarchical assessment index”
Michele Grimaldi and Livio Cricelli
Department of Mechanics, Structure and Environment, Faculty of Engineering,
University of Cassino, Cassino, Italy
Abstract
Purpose – This paper aims to define a theoretical model that assesses and measures the intangible
asset contribution to company performance. The model keeps in focus the most meaningful elements
that reflect the success factors, crucial to company business strategy and value creation.
Design/methodology/approach – The model adopts a hierarchical structure. The strategic
intangible assets of the company have been divided into value drivers; a series of measurement
indicators have been selected to describe the characteristics of each aspect of the intangible company
performance. The measurements obtained from numerical indicators, which express the totality of the
results achieved by the organizational strategies, are combined to create the hierarchical assessment
index (HAI), by assessing quantitative and qualitative company features, through the analytic
hierarchy process (AHP).
Findings – The HAI identifies the sources of added value and competitive advantage in each
business context; it traces the subordination of every element on company performance, and singles
out those intangible assets that improve the company performance, at every level of the hierarchy.
Practical implications – The HAI provides guidelines to understand what are the key intangible
factors to create the value of the company and suggests the implementation of corrective strategies.
Originality/value – The HAI is the expression of the combination of the objective measurements of
intangible assets with the subjective contributions by the managers. In fact, besides the numerical
results of the performance of every element in the hierarchical structure, the managers’ opinions about
the significance of their performance are also considered. Thus, objective and subjective evaluations
jointly contribute to suggest the way to achieving the expected objectives.
Keywords Intangible assets,Asset valuation, Measurement, Analytical hierarchy process
Paper type Conceptual paper
1. Introduction
In the last years, managers and scientists have agreed on the fact that the assessment
of company performance must be based not only on the quotation of the internal
tangible resources, but also on the measurement of the available intellectual capital
within the company (Kaplan and Norton, 1996). It is well known that the intellectual
capital consists in those intangible asse ts as competences, interrelationships,
know-how and processes which determine the organizational, cultural and strategic
specificity of a company (Bontis, 1998; Edvinsson and Malone, 1997; Stewart, 1997).
Thus, it represents one of the most difficult assets to be managed and numerically
quantified. Traditional economic and financial metrics, in fact, cannot provide
exhaustive information about the actual health state of companies and about their
performance (Eckstein, 2004; Lee et al., 2005; Said et al., 2003), as they quantified the
intangible assets economically as a consequence of the gap between the market value
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VINE
39,1
40
VINE: The journal of information and
knowledge management systems
Vol. 39 No. 1, 2009
pp. 40-54
qEmerald Group Publishing Limited
0305-5728
DOI 10.1108/03055720910962434
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