The Effect of Intangible Assets on the Management of Organizations

Authors:

Pages: 192-200

Abstract:

This report offers an innovative framework and analysis of the relationship between organizations’ intangible assets and their future development and prosperity. This framework reveals a management model containing three main elements: intellectual property, reputation, and personnel. Each element is owned and implemented by the different functional departments in the organization, but presented as interconnected. They are able to improve management and to be a key driver of development and perspective for success. Often, traditional accounting treats investment in intangible assets as an operating expense rather than as a long-term one. For short-term strategies, profit and loss figures are generally used as the primary performance indicators of organizations on their balance sheets and financial statements. On the other hand, there are almost no indicators to guide management in establishing long-term strategies regarding intangible assets. This report uses an approach based precisely on the interconnectedness of core intangible assets, known as the RIPS model, to establish the relationships in the proposed framework. A central idea of the model is that intangible assets can provide future benefits and a competitive advantage to an organization when properly monitored, interrelatedly used, and better managed.

Keywords:

intangible assets; intellectual property; reputation; personnel; management.

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