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support to further studies of intellectual capital. Given that both approaches
suggest tools for systematically managing these types of assets within the firm,
recently there have also been attempts to create an integrated model. One example
is the works by Bueno, et al., (2004).
The measurement of intellectual capital within the firm gains importance
during the first part of the 1990´s. During this period, several models arise which
are later integrated and consolidated through the publication of general guidelines
that can be applied to different types of businesses. The following sections examine
these models as well as the latest thinking with respect to the identification and
measurement of intellectual capital in order to place the model used in this study
within a broader context.
2.2. Evolution of models for measuring intellectual capital
The increasing importance of knowledge and other intangible resources for
the effective management of organizations requires that these same firms extend
their management and internal monitoring systems to include all the resources
available to them whether tangible or intangible given that value creation relies on
both. Likewise, from the perspective of outside parties such as investors or
financial analysts, traditional accounting systems and financial statements are
inadequate for conducting company valuations and establishing the value of
intangibles (Cañibano and others, 1999) which are key for businesses to operate
effectively.
The need for information from inside and outside the firm coupled with a
paradigm shift in company management based on know-how and intangible
resources led many companies and research institutions to develop tools for
management and communication based on new quantitative models.
The widespread search for an appropriate methodology for valuing and
measuring intellectual capital gave rise in certain measure to a proliferation of
models. On one hand, these endeavours enriched the field of intellectual capital,
but on the other hand, fostered confusion within businesses, which delayed
implementing any model at all given the e absence of a single unified approach.
According to Roos, G. and Roos, J. (2002), the various models can generally
be classified into four perspectives, specifically (a) models designed to value
intellectual capital, (b) models for the capital markets, (c) models based on the
return on assets and (d) models based on indicators.
The first category, models that seek to directly value intellectual capital,
seek to quantify in monetary terms those intangible assets that are typically
accounted for by businesses such as trademarks, patents, copyrights and others. In
the methods relevant to capital markets, in which Tobin´s work is often a starting
point, the value of intangible asses are defined as the difference between market
value and book value adjusting each according to the methodology employed.
Models based on return on assets seek to measure intangible assets by comparing
the return on assets achieved by a company in excess of a normalized return.
With respect to indicators, there are various propositions the most well-
known of which include Balanced ScoreCard (Kaplan and Norton, 1996), the
Skandia Navigator (Edvisson and Malone, 1997), the Intellectual Assets Monitor
73| A case study on spanish electrical utilities
suggest tools for systematically managing these types of assets within the firm,
recently there have also been attempts to create an integrated model. One example
is the works by Bueno, et al., (2004).
The measurement of intellectual capital within the firm gains importance
during the first part of the 1990´s. During this period, several models arise which
are later integrated and consolidated through the publication of general guidelines
that can be applied to different types of businesses. The following sections examine
these models as well as the latest thinking with respect to the identification and
measurement of intellectual capital in order to place the model used in this study
within a broader context.
2.2. Evolution of models for measuring intellectual capital
The increasing importance of knowledge and other intangible resources for
the effective management of organizations requires that these same firms extend
their management and internal monitoring systems to include all the resources
available to them whether tangible or intangible given that value creation relies on
both. Likewise, from the perspective of outside parties such as investors or
financial analysts, traditional accounting systems and financial statements are
inadequate for conducting company valuations and establishing the value of
intangibles (Cañibano and others, 1999) which are key for businesses to operate
effectively.
The need for information from inside and outside the firm coupled with a
paradigm shift in company management based on know-how and intangible
resources led many companies and research institutions to develop tools for
management and communication based on new quantitative models.
The widespread search for an appropriate methodology for valuing and
measuring intellectual capital gave rise in certain measure to a proliferation of
models. On one hand, these endeavours enriched the field of intellectual capital,
but on the other hand, fostered confusion within businesses, which delayed
implementing any model at all given the e absence of a single unified approach.
According to Roos, G. and Roos, J. (2002), the various models can generally
be classified into four perspectives, specifically (a) models designed to value
intellectual capital, (b) models for the capital markets, (c) models based on the
return on assets and (d) models based on indicators.
The first category, models that seek to directly value intellectual capital,
seek to quantify in monetary terms those intangible assets that are typically
accounted for by businesses such as trademarks, patents, copyrights and others. In
the methods relevant to capital markets, in which Tobin´s work is often a starting
point, the value of intangible asses are defined as the difference between market
value and book value adjusting each according to the methodology employed.
Models based on return on assets seek to measure intangible assets by comparing
the return on assets achieved by a company in excess of a normalized return.
With respect to indicators, there are various propositions the most well-
known of which include Balanced ScoreCard (Kaplan and Norton, 1996), the
Skandia Navigator (Edvisson and Malone, 1997), the Intellectual Assets Monitor
73| A case study on spanish electrical utilities
