A theoretical framework of intellectual capital.

• Author: Ienciu, Nicoleta M.
• Position: Report

1. INTRODUCTION

   Intellectual capital is a relatively new and enigmatic concept, relating to the intangibles, highly mutable assets of the firm. In order to define intellectual capital we should start first with the definition for intangible assets. Intangible assets are considered a company's most criticized resources however most entities cannot define them in a clear and accurate manner (Andreou et al., 2007: 52). Specialized literature indicates that there is a large range of definitions and terms which can be attributed either to intangible assets or intellectual assets. For instance, a series of researchers define intellectual capital as the difference between the company's market value and its book value (Edvinsson & Malone, 1997; Stewart, 1997; Sveiby, 1997) while others feel that the difference between the company's market value and its identifiable book value is represented by the "goodwill" which, in essence, is an intangible asset (Beaver, 1998, p. 78). While the term "goodwill" contains many of the aspects of intellectual capital, it has serious drawbacks. The most significant is that in our increasingly knowledge- based era intangibles are becoming the dominant value of the organization, which raises the question of whether the traditional accounting framework is worth its salt either for valuation or for navigating the organization. "Goodwill" is based on an industrial-age business model, when intangibles held considerably less value. Additionally, goodwill is treated as an asset with a limited life and so can be amortized (Chatzkel, 2003).

   Each of the perspectives they developed is true for its specific user need. Thinking that only one of these definitions is correct and therefore the others are wrong is not accurate or effective. A great deal can be gained by looking at intellectual capital through these different definitions. Each lens gives us an opportunity to see our organizations differently enough to derive greater value than any single definition could provide. All of them are valid and it is up to the user to select the definition that works best to meet any particular set of needs (Chatzkel, 2003).

2. RESEARCH METHODOLOGY

   Within this article we have used as research method the analysis of several studies deemed as representative for the academic world. These studies have been taken over from Journal of Intellectual Capital, and they include articles on the subject of intellectual capital from a conceptual point of view. The articles chosen were those referencing especially to the definitions given to the concept of intellectual capital, the classification of their components and even the conceptual delimitations of the term. The reason behind choosing this journal was in connection to the fact that it is deemed as an important source of information, given the fact that it is fully dedicated to the study of intellectual capital, and the analyzed articles have been developed by several articles throughout time, hence we have also considered them as representative for our research.

3. DEFINING INTELLECTUAL CAPITAL: LITERATURE REVIEW

   A large number of specialists have been distinguished in time, belonging to various fields of expertise, such as management, accounting, economics, information technology, sociology, psychology, education and development, attempting to define intellectual capital as precisely as possible (Bontis, 2002).

   In management, a series of researchers have tried to capture in few words the essence of intellectual capital. Hence, Steward (1997) defines intellectual capital as ,,an ensemble of knowledge existing within a company which can be used to create a competitive advantage", while Sveiby (1997) considers intellectual capital as ,,an ensemble of knowledge convertible into value". We are talking here about an intellectual potential, based on various knowledge, having the ability to create value integrated into material and immaterial products of a company. It is highly difficult to identify it and even more difficult to use it in an efficient manner, but once founded and exploited, we would have certainly won.

   From the accounting point of view, the term associated to intellectual capital by the accountants' community tends to be that of an intangible asset. The intangible assets are resources being controlled by the company, not having a physical nature, able to bring about future economic benefits, legally protected and which cannot be evaluated in a credible way. Nevertheless, by distinction to the non-tangible assets, which are accounted for in the Balance sheet, intellectual capital includes those non-tangible elements, highly important and relevant to a company, elements which do not correspond to the conditions imposed by accounting standards and regulations for acknowledgement within the financial Statements as part of the assets class, as the large majority of them...