Monitoring and measuring intangibles using value maps: some examples
| Pages | 211-223 |
| Date | 17 April 2009 |
| Published date | 17 April 2009 |
| DOI | https://doi.org/10.1108/14691930910952623 |
| Author | Shital Jhunjhunwala |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Monitoring and measuring
intangibles using value maps:
some examples
Shital Jhunjhunwala
Institute of Public Enterprise, Osmania University, Hyderabad, India
Abstract
Purpose – The purpose of this paper is to provide an integrated approach to understand and monitor
those intangible assets (IAs) that are the key value drivers of an organization. With the help of three
different examples, it attempts to examine the cause-and-effect relationship among different
intangibles and map them to organizational success.
Design/methodology/approach – System thinking approach using examples from three different
industries.
Findings – The paper finds that the success of any organization depends on a network of interrelated
IAs that affect each other and the crux is to ensure that each of these is performing as desired. The use
of a causal model clearly demonstrates the cause-and-effect relationships between key variables and
ultimate objectives, and helps companies identify which intangibles need to be constantly monitored
using suitable indicators to achieve the desired goals.
Research limitations/implications – The models have not been verified in practice.
Practical implications – Useful for organizations to monitor and measure intangibles by linking
them to their objective of maximizing shareholder value. The indicators illustrated can be used to track
the performance of intangibles.
Originality/value – Three industry specific original generic models are presented that will be useful
to managers and consultants as a basis for identifying and mapping key intangibles (value drivers) to
their organization goals.
Keywords Intangible assets,Value analysis, Knowledge mapping,Shareholder value analysis
Paper type Conceptual paper
Introduction
The industrial age characterized by enormous manufacturing facilities brought to the
forefront of management attention and concerted their effort in managing, measuring
and reporting tangible assets like buildings, plant, equipment, and machinery. The
information and knowledge age that we live in, with all its complexities and dynamic
behaviour has shifted the focus to intangible assets (IAs). It is well-accepted that brand
value for a fast-moving consumer goods or employee skills for a software company are
the key assets of the organization and not the buildings or computers or any other
physical asset they own. IAs have become the indisputable value drivers to success.
Organizations are thus, wanting to closely track their IAs. While traditional
accounting systems were apt for measuring and reporting tangible assets,
organizations today are at loss as to how to monitor the performance of IAs. To
monitor, first intangibles need to be measured and reported. There are no globally
accepted methods of doing this. Balance score card, intellectual capital report and IA
monitor are some of the tools that are gaining acceptance. They, however, measure
individual assets and fail to provide a holistic picture.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
Monitoring and
measuring
intangibles
211
Journal of Intellectual Capital
Vol. 10 No. 2, 2009
pp. 211-223
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930910952623
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