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Intellectual Capital and Competitiveness - Essay Example

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Intellectual Capital and Competitiveness Intellectual capital, and related intangible assets and intellectual property, are the core assets of our time. The intellectual capital of an organization consists of intangible resources and/or assets that are available for use to achieve organizational goals and create value (Choo and Bontis, 2002)…
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Intellectual Capital and Competitiveness
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Download file to see previous pages Not so long ago, business resources consisted of 80% tangible assets and resources. However, the picture today is quite different. By 1999, 80% of organizations’ assets were intangible (Andersen and Striukova, 2010). Today’s economy is characterized by intellectual property and assets forming a major part of business assets and resources. Therefore it is paramount to identify how intellectual capital and resources may influence management for the organization’s benefits. According to economic theorists, there are three major components of intellectual capital: human capital, structural capital and customer capital. Human capital represents employee competence, brainpower and knowledge (Berry, 2005). Customer capital on the other hand designates the organization’s relations with its suppliers, customers and distributors. Structural capital represents culture and systems, processes and practices (Bosworth and Webster, 2006). Recognizing the three components of intellectual capital is important for managers who are responsible for ensuring that the organization runs and performs as well as expected. Customer capital is one of the most important aspects of any organization. Customers are invaluable sources if organizational competitiveness in terms of market dominance, financial performance, dynamic capabilities and technological advantage. In today’s business environment, most companies have turned to e-business as a way to boost their businesses (Al-Ali, 2003). This means that a large percentage of an organization’s customers are found online. Managers need to evaluate the way they manage their entire customer capital so as to ensure that they maximize on this important part of the organization (Daum, 2010). This paper evaluates how an organization’s online and offline customer capital may impact on management, and how this influence affects the organization on a whole. Managing Customer Loyalty and Branding It is important for companies to develop strong long term relationships with their target customers so as to build a sustainable business (Choo and Bontis, 2002). ICT has changed the conventional methods used by managers to manage their intangible customer base asset. More and more people are opting to use the internet to do business. In some ways, the online customer base has some needs that are different from those of conventional customers (Bosworth and Webster, 2006). It is for this apparent reason why managers have to come up with ways to work within the new e-market environment so as to satisfy the needs of the customers. The creation of processes or platforms to build and maintain e-business customer loyalty is not a task that a manager can achieve by himself (Jolly and Philpott, 2004). He has to bring on board other customer relations experts to help him draft strategies that will appeal to most of the customers. The first thing that should be considered when creating customer loyalty management strategies is the organizations end goal (Daum, 2010). Although the aim of customer loyalty management is pegged on the idea that the customer has to be satisfied at all times, the way this is done should be determined mainly by the organizational objectives, that it, what the business aims to achieve in the short and long term. The operational front of an e-business should also be considered when managing e-business customers (Bryer, Lebson and Asbell, 2011). This means that the ...Download file to see next pagesRead More
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