Intellectual Capital: A New Process of Sustainable Value Creation for the Corporation

Introduction

The fundamental presumptions of how to point the way into the future are being rethought by a growing number of organizations today. The majority of Executives are already aware that metrics for the corporation's current state include profitability, market share, and even customer satisfaction. Simply said, current product-market pairings are poor indicators of where to make the most money in the future. Corporations must investigate the more subtle and less obvious drivers of future profits in order to determine the best guidelines for future action (Capital, T. I. 1998).Since the second half of the 1980s, professionals and academics have been motivated by the successes of knowledge- and innovation-based enterprises to develop unique methods for measuring a company's worth and to understand the peculiarities of this novel value generation process. In order to explain the persistent creation of wealth and economic growth in organizations, endogenous and firm-specific factors have received primary responsibility (Barney, J. B., 2001; Dierickx et al., 1989; Grant, R. M., 1991). The development of the resource-based view theory and the knowledge-based view theory in the 1990s suggested that access to intangible assets, which are comparable to commodities, rather than just material resources, which are analogous to commodities, was what gave organizations a sustainable competitive advantage (Pedrini, M. 2007). Intangible resources are now considered to be a better “weapon” than actual resources for firms to achieve higher performance, allowing them to increase their competitive edge (Agostini et al., 2017; Yusoff et al., 2019). Intangible assets are becoming more important to businesses than ever before (Hansen, M. T. et al., 1999; Lev, 2001). According to a number of authors, businesses nowadays are more likely to focus on intangible assets than on tangible ones in order to gain a competitive advantage (Bontis, 1996; Martn de Castro et al., 2004). According to Edvinsson, L., and Malone, M. S. (1997), these intangible resources are assets that are not immediately visible on a standard accounting balance sheet but nevertheless boost the value of the firm. Intangible assets are all the components of a company firm that exist in addition to working capital and tangible assets, according to Smith et al. (1994). After working capital and tangible assets, these are the components that support the operation of the business and are frequently the main sources of the company's revenue. Their ability to survive depends on the availability or anticipation of income. Sullivan, P. H. (2000) Intangibles are described as “knowledge that can be transformed into profit”. Businesses get value from the profit they make from the sale of their products or services. To assure recurring business, businesses rely on intangibles like reputation, customer loyalty, brand recognition, leadership, and standard-setting, all of which are critically dependent on human capital. In 1998 Nahapiet, J., & Ghoshal, S. refer IAs are described as “knowledge and knowing capabilities of a social collectivity, such as an organization, intellectual community, or professional practice”. Hall, R. (1992) “Intangible assets are value generators that turn functional resources into assets with additional value”. An intangible asset, according to Lev, B. (2001), “is a claim to future benefits... yet it does not have physical substance.” Additionally, he offers a revised definition of assets that excludes financial assets like stocks and bonds from its purview. He claims that innovations, human capital, organizational capital, knowledge, etc. are all components of IAs.