Abstract
This research commenced by looking at what the knowledge economy is and what the driving forces are. In order to decide on how knowledge in this new economy can be managed, it was first necessary to define the concept of knowledge. The difference between tacit and explicit knowledge and the interaction between the two were discussed and at the end ways of managing this knowledge were investigated.
In a discussion of the term knowledge management it was concluded that it can be regarded as the handling of tacit and explicit objects of knowledge through information systems, so that it enhances innovation and learning in the enterprise. However, when this knowledge is used for creating economic value, it becomes an item of capital and it is therefore necessary to determine what Intellectual Capital is.
The history of Intellectual Capital was discussed and in defining Intellectual Capital seven different models for Intellectual Capital were studied. It was found that Intellectual Capital is subdivided into three major components, viz. Human Capital, Structural Capital and Customer Capital. Each of these components was then thoroughly described and discussed.
The aim of the research was to study the explicit management and measurement models of Intellectual Capital that would improve understanding of the mechanisms by which value is created and extracted. The different approaches that can be followed in managing Intellectual Capital were investigated. It was concluded that the three major components cannot be seen as independent from each other and must therefore be managed as a whole. The management of the interaction between the three components can be seen as the management of the intellectual assets of an organisation and this consists of two phases, viz. value creation and value extraction.
In order to determine how successful an organisation is in managing its Intellectual Capital this management needs to be measured. The vehicle for measuring performance is a model with a set of indicators in each of the three major components. It was found that measurement models can be divided into four major categories:
• Market capitalisation methods
• Return on assets methods
• Direct intellectual capital methods, and
• Scorecard methods.
Twenty-seven different models were investigated in order to understand which indicators were necessary to measure Intellectual Capital in an organisation.
In order to propose a new framework a study was firstly done on what a framework should look like and which elements should be included. Thereafter an investigation was done to determine which indicators should be included in such a framework.
As it was found that such a framework is very organisation-specific, a brief overview of the RAU was given and according to the strategic objectives of the University as set out in the three-year rolling plan a set of indicators was decided upon. It was necessary that each of these indicators indicate whether the University had been successful in the key performance area through the management of its Intellectual Capital.
The criteria and indicators identified were applied in the composition of a new model in an effort to find a suitable model for use at universities. The evaluation process turned up the scorecard models as the most suitable for applying in this instance. An attempt was therefore made to modify and adjust these types of models to answer all the requirements of the University. Meeting the requirement that indicators from all three major components must be present was possible. Efforts to adapt existing models in such a way that sub-components can also be measured were met successfully. This model was then tested at RAU and it was measured whether the management of Intellectual Capital contributed to reaching the University’s strategic goals.
Prof. A.S.A. Du Toit