Intangible cultural heritage (see Wiki page for definition) is summarised as the ‘living heritage’ of national culture; the oral tradition. The treasured way of preserving one’s national culture is in stark contrast to the difficulty of passing on healthy organisational cultures, which have so much influence on the success and survival of companies in the market.
Much has been written about the influence of national culture and cross-cultural influence on globalized companies (see for example key culture writers like Hofstede, Tropenaars and Friedman). The link of one’s heritage and underlying assumptions to organsiational performance per se has held bread and butter money for generations of business consultants, HR professionals and psychologists. (more…)
Intangible assets remain definition bound and thus subjective. In brand and design practice, most professionals don’t acknowledge that what they are delivering as business service is considered a difficult return on investment for their clients.
There is a lack of consistent terminology in the literature relating to intangible assets and intellectual capital.Management scholars tend to employ either “capital” or “asset” terminology to refer to investments with no physical existence.
Lawyers refer to intellectual property, which has property rights in law. Accountants do not generally use the term “intellectual capital”.
Accountants refer to identifiable intangible assets, goodwill and intellectual property (with legal rights) under the umbrella of “intangible assets”.
Economists refer to intangible assets in terms of their source, as investments, and role in production, as capital. (Hunter, Webster, Wyatt, 2005)
As business-to-business services that deliver design, brand and marketing related services, practitioners should take note of the difficulty that clients have with working out expenditure justification. I think it is therefore important to assist the client in going through a transparent process of achieving mutual goals such as I described in my earlier post about the Consensio intangible asset chain.
Morality describes goal posts of boundaries and rules. However, Ashman and Winstanley (2007) like to think otherwise. Linking the corporate identity construct with Asian tailor sweatshops, fast food displays and corporate fraud, they link moral and ethical conduct to misleading the public.
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Research has found intangible resources explain performance variation in firms. To be precise, the interaction and combinations of resources create sustainable competitive advantage according to Galbreath & Galvin (2006, 164).
However, simply possessing resources does not translate them into value (Priem and Butler 2001). Firms achieve value creation by gaining, combining and utilizing resources (Grant 2002).
This strategic management view of the firm environment implies, that the right mix of resources and communication should achieve sustainable competitive advantage. But what exactly is the right mix for what type of company? And when is it the right time to develop the mix?
Moreover, to me the nature of intangible assets are more suggestive than definitional, more holistic than functional and more relational than rational.
Key decision-makers must learn to communicate that intangible assets serve as managerial business function. IA’s are there to facilitate and create business processes that integrate cross-functional teams and outcomes. If managers can stop wasting their time on eternal expenditure justification intangible assets can be understood and successfully integrated by financial and operational strategy.
As I discussed in my earlier post about the Intangible Asset Value Chain, small firms and start-ups are particularly exposed to the ‘chicken and egg’ situation. Should they just invest in ‘tangible asset’ creation and development? And when and how is the time ripe for ‘intangibles’?
To clarify this, we firstly need to look closer at small business research. Although over 96% of Australian businesses are employing less than 20 people, the majority of management recommendations and findings is deducted from academic research into large industry organisations.
This is pretty much the case for the US, Japan and other industrialised countries as well. (more…)
