Engaging Intellectual Capital

Essay by ihindawi April 2005

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This assay is about the role of soft system thinking in creating the intellectual capital of the organisations. We will defined the intellectual capital as a start and it's elements as well as the value and the role of it. The relation between the social capital and intellectual capital will be highlighted in addition to the importance of the knowledge management.

Definition of intellectual capital concerns the degree to which it is possible to consider a concept of organisational, collective or social knowledge, which is different from that of individual organisation members. Asserting that "all organisational learning takes place inside human heads" (Simon, 1991), discounts any notion of intellectual capital at the organisational level, above and beyond the sum of the knowledge and knowing capacity that exists at the individual level.

The more recent descriptions of intellectual capital are consistent with the following definition:

"That part of total organisational wealth represented by its intellectual assets codified organisational resources of knowledge that can enhance organisational performance and increment organisational wealth through their skilful and continuous transformation" (St Leon, 2002).

Intellectual capital may be both the end result of a knowledge transformation process or the knowledge itself that is transformed into intellectual assets of the firm (Dzinkowski, 2000). Intellectual Capital consist of Social Capital: Relationships within and outside the orgnisation; Human Capital: The people within the organisation; Structural Capital: The process and operations of the organisation; Customer Capital: Value of external relationships.

Structural capital refers to elements like proprietary software systems, distribution networks, and supply chains. Human capital includes human resources within the organisation (i.e. staff resources), and resources external to the organisation (namely, customers and suppliers). Often, the term ``Intellectual Capital'' is treated as being synonymous with ``intangible assets''. The following list shows the diversity of the kinds...