Here are three issues that come up in managing intellectual capital. Your commen

Question

Here are three issues that come up in managing intellectual capital. Your comments on any are welcome. In what specific ways could corporate culture drive a firm's market value? If you can, provide what you think is an example of corporate culture that might contribute significantly to market value. Do we see the value of corporate culture identified on corporate balance sheets? Side question: can you measure corporate culture? How might customer relationships be sources of value? What metrics might be particularly important in assessing an organization's customer capital or the value of its customer relationships? Can you provide examples where one can see a close relationship between market value and the changing assessments of the quality of the customer relationship? Can you give examples of customer capital outside of the for-profit sector? Human capital, while it is a key driver of value, leaves the office each evening. What sort of special Intellectual Capital (IC) management problems does this present for a firm?

Explanation / Answer

1. Corporate culture can be understood as the way companies (read corporate) conduct their business. Corporate culture consists of the norms and rules that are followed across the corporate in its daily operations. It constitutes the company’s brand image and way people within the organization deal with internal and external stakeholders.

For instance, McDonald’s corporate culture emphasizes on providing fair and equal opportunities to all its employees for promotions. This aspect of its corporate culture has significantly improved McDonald’s image in front of its stakeholders and has even led to a gradual spike in its market value.

There is no particular head to reflect the value effective corporate culture generated, but, corporate culture is still central to the company’s effective functioning. When the corporate culture deteriorates, the firm can see the effect in its declining financial results, as the employee base within the company start showing signs of displeasure which affects the firm’s overall performance.

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