Where does intellectual capital collide?

A firm's knowledge-based intangible value, split into three stocks: human capital, the skill and knowledge that walk out the door each night; structural capital, the knowledge fixed in the organization such as processes, databases, and patents; and relational or customer capital, the value held in ties to customers and partners. Edvinsson and Malone's 1997 Intellectual Capital, Stewart's 1997 Intellectual Capital: The New Wealth of Organizations, and Bontis's 1998 study each set out a version of this three-part scheme and tried to make its parts measurable. Here intellectual capital is one thing carved into named stocks for managers, not a line on a financial statement, not a theory of competitive advantage, and not the network resource that organization theorists call social capital.[1][2][3]

Unit

A firm's intangible value, split into three named component stocks

Recovery means

Not applicable

Measured by

Estimated with survey scales and scorecards such as the Skandia Navigator that assign indicators to each of the three stocks

The same intangible value seen as an economic asset: a claim on future benefits with no physical form, such as recognized goodwill, patents, and brands on the balance sheet, plus the far larger store of unrecorded value that standard accounting leaves off it. Lev's 2001 Intangibles: Management, Measurement, and Reporting argued that these assets drive modern firm value yet sit largely outside the financial statements, and it set out ways to measure and report them. Here intellectual capital is defined by whether value can be recognized, valued, and reported in money, a framing built for investors and standard-setters rather than the three managerial stocks, the strategy of the knowledge-based view, or the relational resource of social capital.[4]

Unit

An intangible asset, valued in monetary terms whether or not it is recognized

Recovery means

Not applicable

Measured by

Approached through market-to-book gaps, Tobin's q, capitalized spending on research and brands, and disclosure frameworks

Knowledge treated as the firm's most strategically important resource, the thing a firm exists to integrate and apply. Grant's 1996 Toward a knowledge-based theory of the firm argued that firms are institutions for integrating the specialized knowledge held by individuals, and Nonaka's 1994 A dynamic theory of organizational knowledge creation described how tacit and explicit knowledge convert into new organizational knowledge. Here intellectual capital is framed as a productive and strategic asset that explains why one firm outperforms another, an explanation-driven view distinct from the managerial stock-taking of the tripartite scheme, the monetary reporting of the accounting view, and the network ties of social capital.[5][6]

Unit

A body of tacit and explicit knowledge that a firm integrates and applies

Recovery means

Not applicable

Measured by

Studied through knowledge-integration processes, conversion between tacit and explicit forms, and their link to performance

The value that sits in relationships rather than in people or processes: the resources a person or firm can reach through a network of ties, with a structural, a relational, and a cognitive part. Nahapiet and Ghoshal's 1998 Social capital, intellectual capital, and the organizational advantage argued that social capital is what lets intellectual capital form and be shared, making the two cousins that overlap at the relational or customer stock. Here the construct is a network resource studied in its own right, so it can be read either as the source that feeds the tripartite scheme's relational stock or as a separate construct that gets folded into intellectual capital by mistake, which is the fault line below.[7]

Unit

A relational resource embedded in a network of ties, with structural, relational, and cognitive parts

Recovery means

Not applicable

Measured by

Assessed through network structure, trust and norms, and shared codes and narratives