IC Rating - Edvinsson

Intellectual Capital can be said to constitute value creating factors not shown in traditional balance sheets, but which are of critical importance to a company's long-term profitability. IC Rating is a way of measuring intellectual capital from a new perspective and with a new approach focus on the assets that in fact decide the ability of knowledge based companies to create value for its interest groups.

Category

Valuing Intangibles

Intellectual Capital

An IC Rating provides management with a foundation for optimizing the competitiveness of the organization by functioning as:

• A foundation of a modern business control system with clear and measurable goals for maximizing future profitability. This analysis can be repeated in order to measure the goal achievement;

• A basis for improvement and change activities which can be used on both management- and operational levels. The areas of improvement can be identified after which decisions about changes can be made;

• A structured image of value creating assets that can be used in market communication (investor relations, annual reports) as well as within the organization, where the tool creates a new basis and a new language for internal aspects important to the business activity.

Compare: Intangible Assets Monitor  |  Balanced Scorecard  |  Strategy Maps  |  Organic Organization

Further reading

Edvinsson, Corporate Longitude

Kaplan, Norton, The Strategy- Focused Organization

Standfield, Intangible Management

Lev, Intangibles: Management, Measurement, and Reporting

Smith, Valuation of Intellectual Property and Intangible Assets

More on Organizational Learning

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