...Organizational Change in the Insurance Company The organizational change which will be discussed in this paper involves a large insurance company who wants to increase market share from the sale of their cutting edge variable annuity product. The outside sales force, known as wholesalers have set territories throughout the United States. Current studies have determined that many of the existing leads, who are Financial Advisors, are not being contacted and so therefore potential new business and new relationships are being missed. Upper Management has decided to institute a major organizational change in the form of creating smaller territories for existing wholesalers and hiring new, inexperienced wholesalers with the objective that there will be more effective penetration and an increase in business. The key stakeholders who will be involved are all employees, management and shareholders. The stakeholders with the most significant impact will be the existing internal and external wholesalers and the training department staff. These departments will have challenges such as maintaining current business while finding new business, hiring new people will create challenge for the managers and the training department. The existing wholesalers will need to restructure their business which will meet with resistance. This paper will address the change management approach, recommended action steps as wells as overcoming various obstacles in order to effect the change and increase...
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...(KMN) - forms the core of BSD. KMN continually rationalises and revitalises the BSD. An inclusive concept of knowledge spectrum as the quintessential resource for value creation is elaborated briefly in terms of its dynamic configuration. A firm's intellectual capital (IC) is seen as the resultant of its KMN. IC represents a firm's meta-capability toward overcoming challenges and exploiting opportunities in its continual pursuit of value creation. Various methods, frameworks of KM discussed in class were : THE SKANDIA NAVIGATOR 1. Financial focus of the Skandia Navigator captures the financial outcome of our activities. It is here where we establish the long term goals and also a large part of the overall conditions for the other perspectives. This could be profitability and growth that shareholders demand. 2. Customer focus gives an indication on how well the organization meets the needs of its customers via services and products. 3. Process focus of the Skandia Navigator captures the actual processes of creating the services and the products which our customers desire. 4. Renewal and development focus aims at reassuring the organizations long term renewal and in part its sustainability. 5. Human focus: The process of knowledge creation is visualized in this focus area. It is also essential that the employees are happy with their work situation, satisfied employees lead to satisfied customers, improving...
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...teSeeking an effective way to report intellectual capital Summary In today’s knowledge economy, intellectual capital has been playing an increasingly significant role in creating corporate sustainable competitive advantages and becomes instrumental in determining the enterprise value. Though measuring the value of intellectual capital is difficult, with the emerging of intellectual capital valuation models, a number of leading companies have decided to make additional intellectual capital disclosure. This paper discusses and illustrates the intellectual capital statement. How to effectively measure and disclose intellectual capital in external financial reporting and how the accounting rules for reporting intangibles limit the recognition of intellectual capital and will also be discussed. The final part is proposed approaches to intellectual capital reporting. Introduction Our world is in the rise of new economy, principally driven by the information and knowledge. Today, a number of companies and organizations rely heavily on the knowledge and skills of their stuff and the network of the customer. As these intangible assets became increasingly critical, the limitations on financial statements in explaining a company’s value stress the fact that the source of economic value is no longer the production of material goods but the creation of intellectual capital. Background Definition Stewart first defined intellectual capital as intellectual material-knowledge, information...
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...STOCKHOLM SCHOOL OF ECONOMICS Master thesis within Finance Evaluating the Performance of Socially Responsible Investment Funds: A Holding Data Analysis H. Camilla Stenström* Jessica J. Thorell** Abstract: This paper investigates the performance of regular mutual funds compared to Socially Responsible Investment (SRI) mutual funds, over the time period of January 2001 to September 2007. The paper extends the research on the performance of SRI funds by using holding data of regular funds to create replicating portfolios. In the replicating portfolios, unethical investments are excluded according to a norm-based screening list, hence creating artificial SRI funds. The replicating portfolio returns are then used as a benchmark to compare against the SRI funds’ and regular funds’ returns. Results from the study indicate that an exclusion of companies according to norm-based screening can improve a fund’s performance. However, when looking specifically at the fund management of SRI funds, the results point towards inferior performance compared to regular funds. Key Words: Socially Responsible Investment (SRI) funds, ethical investments, holding data analysis, norm-based screening PhD Stefan Engström 13:15-15:00, December 14, 2007 Room 349, Stockholm School of Economics Tutor: Presentation: Venue: * 19873@student.hhs.se ** 19924@student.hhs.se H.C. Stenström and J.J. Thorell ACKNOWLEDGEMENTS Special thanks to tutor PhD Stefan Engström for all support and guidance...
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...LIST OF CONTRIBUTORS Solomon Appel Robert H. Ashton Reza Barkhi Metropolitan College of New York, New York, NY, USA Fuqua School of Business, Duke University, Durham, NC, USA Pamplin College of Business, Virginia Polytechnic Institute and State University, Blacksburg, VA, USA School of Management, University of Michigan-Dearborn, MI, USA College of Business Administration, San Diego State University, San Diego, CA, USA Department of Accounting, University of Arkansas at Little Rock, AR, USA Zicklin School of Business, CUNY – Baruch College, New York, NY, USA Belk College of Business, University of North Carolina at Charlotte, NC, USA College of Business and Economics, West Virginia University, Morgantown, WV, USA RSM Erasmus University, Department of Financial Management, Rotterdam, The Netherlands Mohamed E. Bayou Chee W. Chow Cynthia M. Daily Harry Z. Davis Nabil Elias Arron Scott Fleming Frank G. H. Hartmann vii viii LIST OF CONTRIBUTORS Fred A. Jacobs Frances Kennedy James M. Kohlmeyer, III Leslie Kren John Y. Lee Michael S. Luehlfing Adam S. Maiga School of Accountancy, Georgia State University, Atlanta, GA, USA Department of Accountancy and Legal Studies, Clemson University, SC, USA College of Business, East Carolina University, Greenville, NC, USA School of Business, University of Wisconsin, Milwaukee, WI, USA Lubin School of Business, Pace University, Pleasantville, NY, USA School of Professional Accountancy, Louisiana Tech University, LA...
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... TABLE OF CONTENT 1. INTRODUCTION 1 2. INTELLECTUAL CAPITAL 2 2.1 Definition of Intellectual Capital 2 2.2Characteristics of Intellectual Capital 2 2.3 Components of intellectual capital 3 2.3.1 Human Capital 3 2.3.2 Structural Capital 3 2.3.3 Relational External Capital 5 3. MANAGING INTELLECTUAL CAPITAL 7 3.1 Tacit knowledge 8 3.2 Explicit knowledge 8 4. MEASURING INTELLECTUAL CAPITAL 12 4.1 Why should Intellectual Capital be measured? 12 4.2 Why is intellectual capitalso hard to measure? 12 4.3 Methods for measuring intellectual capital 13 5. INTELLECTUAL CAPITAL REPORTING FRAMEWORKS 14 5.1 Balanced Scorecard 14 5.2 Intangible Assets Monitor (IAM) 14 5.3 Skandia Value Scheme (SVS) 15 5.4 Challenges in reporting intellectual capital 15 5.5 Challenges in disclosure of intellectual capital 16 6. VALUATION OF INTELLECTUAL CAPITAL 17 6.1 Value added approach 17 6.2 Value creation index 18 6.3 Valuation models 20 6.3.1 Traditional valuation models 20 6.3.2 Static valuation models 21 6.3.3 Dynamic valuation models 21 6.3.4 Real option models (ROM) 22 7. CONCLUSION 23 INTRODUCTION Capital, in the business context, refers to any asset that will produce future cash flows. The most well known asset types are tangible in nature. Tangible capital therefore refers to the physical and financial assets of the organization. The value of such assets is disclosed periodically...
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...Earthquakes happen rarely and when they do, they cause a lot of damage to both the geology of the area and the geography. They are the most powerful natural forces that can happen at any time. Geologists and scientists define earthquakes as vibrations of the earth's surface that occurs as a result of a release of energy in the earth's crust. The plates of the earth are constantly moving and small earthquakes can occur more often but they are not felt. When these plates slide past one another or collide into each other, large and violent earthquakes occur. These large earthquakes mostly focus on the meeting points of two plates but can also be focused on the faults that develop in the earth’s crust when the plates move. These faults can be normal meaning there is a hanging and a low bell fault, a reverse fault which is nearly horizontal or the strike slip fault which is a horizontal fault. All these can cause an earthquake but the most intense earthquake happens when blocks of the rock get locked together due to intense friction that results during movement. This builds up pressure with the continued attempt of the rocks to move thus causing an earthquake in the long run. Once the energy gets to the epicenter, the released energy spreads across the surface as rings (Richter 1958). The main shaking created by the released energy is accompanied by foreshocks which increase the earthquake magnitude leading to the earthquake and aftershocks which decrease the earthquake strength...
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...Factors such as globalization that leads to new technology, free flow of capital, increased competition, demand for innovation, changes in customer demand, changes in economic, and political structures are constantly reshaping the way business is carried out (Buckley and Carter, 2000; Thorne and Smith, 2001). Previous research has acknowledged the fact that organizations have begun to realize that sustainable advantage relies on managing intangible resources such as the knowledge embedded assets. According to Stewart (2002), in the 21st century, knowledge embedded assets have become more important to the organizations than financial and physical assets. Therefore, in order to compete in this millennium, organizations must have the ability to create value, be agile and sensitive to the market. Knowledge embedded assets like ideas, practices, talents, skills, know-how, know-what, relationships and innovations, that arise from the creation of IC, have become a pre-eminent economic resource and the basis for competitive advantage (Stewart, 2002; Finney, Campbell and Powell, 2004; Demediuk, 2002; Graves, 2002). According to Sveiby (1997), knowledge embedded assets can be found in three areas: the competencies of the employees; organization’s internal structure such as patents, models, computer and administrative systems; and organization’s external structure such as brands, reputations, relationship with customers and suppliers. Stewart (2002), on the other hand, suggests that knowledge...
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...Journal of International Business and Cultural Studies Human resource accounting and international developments: implications for measurement of human capital Maria L. Bullen Clayton State University Kel-Ann Eyler Wesleyan College Abstract Human Resource Accounting (HRA) involves accounting for expenditures related to human resources as assets as opposed to traditional accounting which treats these costs as expenses that reduce profit. Interest and contributions to growth in HRA have been evident in a number of countries. The strong growth of international financial reporting standards (IFRS) is an indication that the environment for international financial accounting is one that potentially encourages the consideration of alternative measurement and reporting standards and lends support to the possibility that future financial reports may include nontraditional measurements such as the value of human resources using HRA methods. Keywords: Human Resource Accounting, Human Capital, Intellectual Capital, International Accounting, International Financial Reporting, International Financial Reporting Standards Human Resource Accounting, Page 1 Journal of International Business and Cultural Studies Introduction Human Resource Accounting (HRA) involves accounting for the company’s management and employees as human capital that provides future benefits. In the HRA approach, expenditures related to human resources are reported as assets on the balance sheet as opposed to the...
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...Table of Contents Introduction 2 The Summaries 3 Conclusion 5 References 6 Appendix 7 Introduction We are said to live in a new economy. According to Tapscott (1996), the new economy is also a knowledge economy based on the application of human know-how to everything we produce and how we produce it. He also said that more and more of the economy’s added value will be created by brain rather than by brawn. So, what is value added anyway? In his book, Stewart (1997) mentioned that value added in statistician-speak is the difference between the cost of materials and supplies and the price received for finished goods. In a simple word, the value added is the extra value we add into product or services that increase the overall value of it. Then, we have come to the question of how we add the value to our product and services? According to Stewart (1997), again, knowledge has become the primary ingredient of what we make, do, buy and sell. As a result, he said, managing it has become the most important economic task of individuals, businesses and nations. So, it is clear that involvement of this subject matter in micro level up to the macro level is very crucial. The Summaries From article of Expert: Innovation propels changes in world economy by Suraj Raj, Kathleen Kingscott, director for worldwide innovation policy at International Business Machines Corp (IBM), believes innovation is propelling changes in world economy. Like she said, “Innovation...
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...Introduction Over the last decade, increasing interest in Intellectual Capital (IC) has been the core factor it is being developed rapidly (Juma and Paine, 2004; Bontis, 2001). IC was first being acknowledged in 1995 by Skandia when it published the world’s first IC yearly report (Edvinsson and Malone, 1997). Definition of Intellectual Capital (IC) There have been tremendously abundant definitions of IC (refer to Appendix 1). In general it may seen synonymous with knowledge capital and asset, intangible and visible assets (refer to Appendix 2). This also includes human capital, information assets as well as the enclose value of organisations (Bontis, 2001; Tseng and Goo, 2005). Itami (1987) refers IC as organisation’s intangible assets that consist of experience, customer relationship and information, organisation’s repute and culture and intellectual property. This consistent with what mentioned by Stewart (1997) where IC comprises intellectual material that is able to generate wealth. The closest definition of IC would be from Roos et al. (2005) where IC is said to be the non-physical besides non-monetary capitals controlled by organisations that leads to value formation. According to Stewart (1997), there are three components for IC, which are human capital, structural capital as well as relational capital (refer to Appendix 3). Components of IC Human capital happens to be the capital, embedded in a person’s mind and stays together in a person. When a worker quits...
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...INTRODUCTION Development of human resource in terms of mentality and intellectual capital is one of aimed areas under Ninth Malaysia Plan in Malaysia. To enhance the core competence, Malaysia has to convert from labor-intensive goods production to utilization of human knowledge and skills. Research by Tan (2000) found that only few companies listed in Bursa Malaysia reports intangible assets and a small percent of total assets of these companies disclosed intangibles other than goodwill. Thereby, it is aimed to enhance that Malaysian companies should voluntarily disclose intellectual capital in their financial statements. This research measures to the scope length of intellectual capital disclosure and the connection between intellectual capital and corporate governance variables among Malaysian listed companies after the revision of Malaysian Corporate Code of Governance on 2007.Key amendments emphasized to the Code are based on fortifying board of directors and audit committee functions, qualification criteria for appointment, boards composition, frequency of meetings and necessity for continuos training. The code requirements enables shareholders to assess the annual report more transparently. Intellectual Capital DIsclosure Intellectual capital are intangible assets that provides value to a firm`s core competence and it consists of three components namely, tacit knowledge and innovativeness of employees, infrastructure of human capital and external relationship of the firm...
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...HUMAN RESOURCE COSTING AND ACCOUNTING VERSUS THE BALANCED SCORECARD: A LITERATURE SURVEY OF EXPERIENCE WITH THE CONCEPTS1 Ulf Johanson, Gunilla Eklöv, Mikael Holmgren, Maria Mårtensson2 6FKRRO RI %XVLQHVV 6WRFNKROP 8QLYHUVLW\ à Uurà rrà wrpà và rà sà rr hyà i wrpà và urà H@SDUVHà Hrh vtà Dhtviyrà à Vqr hqà hq D rÃDhvà Hhhtrrà wrpà Uurà hvà sà urà H@SDUVHà wrpà và à vrvthrà vivyvvrà à rh r hqà r à vhtviyrà 6à urà rrà vrà vrà vr vvrà hqà rrh puà vvrà và và @ rhà p vr 9rh xÃAvyhqà A hprà I hà Thvà hqà Trqrà h rà h vpvhvtà và urà wrpà 6h à s à svhpvhyà s ÃurÃ@ rhÃ8vvÃsqvtÃsÃurÃTrqvuÃqvrÃh rÃihvrqÃs ÃurÃP@89ÃurÃTrqvuÃ8pvyÃs X xÃGvsrÃSrrh puÃIrxÃurÃTrqvuÃHvv ÃsÃU hqrÃhqÃDq ÃhqÃurÃTrqvuÃQiyvpÃSryhvÃ6pvhv 6Ãs r Ãr vÃsÃuvÃhr ÃhÃqryvr rqÃÃurÃP@89Ãvà ((' ÃUurÃhu ÃhÃÃuhxÃGrÃTuhÃhqÃHhvÃTxtÃs ÃvtvsvphÃp vivÃÃurà rrÃhr +XPDQ 5HVRXUFH &RVWLQJ DQG $FFRXQWLQJ YV WKH %DODQFHG 6FRUHFDUG $%675$&7 In the present paper conclusions are drawn from literature whose goal was to put information on intangibles into financial and non-financial frameworks. The analysis primarily focuses on two concepts: The human resource management oriented concept called Human...
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...The role of Strategic Conversations with Stakeholders in the Formation of Corporate Social Responsibility Strategy. Summary The main discussion of this journal is to explore the role and the use of strategic conversations in corporate social responsibility (CSR) strategy formation from a conceptual perspective to actual practices. Based on this research, the authors have given the strongly recommendation that by intensifying the stakeholder engagement in the CSR strategy-making process, through the mechanism of strategic conversations, will not only minimize the future stakeholder’s concerns and enhance CSR strategy making effectiveness but also maximize organizational sustainability. The learning outcomes are concluded in the following key points: * Corporate Social Responsibility - The evolution of the Corporate social responsibility (CSR) was from a basic concept and belief to become a popular debating subject in recent decades which is centered in ‘whether CSR should take priority over a company’s obligation to make money for its stockholders or vice versa’. - There was a general consensus to align strategies to take full advantage of CSR business opportunities while also including stakeholders in the strategy-making process. * Strategic conversations - Understanding the variety of strategic conversation definitions and how it works properly in an organization through direct communication mechanisms between three pillars: top management, BSE and relevant...
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...Managing Codified Knowledge – A Review Knowledge has long been considered an intangible asset that can only be passed on from a teacher to his pupils through years of teaching and knowledge transfer. However, present day technological advancements and the increasingly dynamic nature of knowledge have led to the dissolution of the “sacred” teacher-pupil affiliation. Knowledge, now, is more of an entity that can be codified, stored, mined and retrieved as and when required, by any one and anywhere around the world. Albert Einstein’s quote, “The only source of knowledge is experience”, is now more of an anecdote than reality, as more and more organizations are realizing that knowledge learned from one’s experience can be codified, i.e. transformed into knowledge “packets” that can be stored and transferred to others. Business organizations have been the primary users of such codified knowledge, as huge amounts of information runs through the various divisions of an organization, which can be integrated and used for making more profitable, strategic and constructive business decisions. Thus, the need for knowledge management arose, wherein, chunks of codified knowledge has to be appropriately managed for ease of retrieval and use. The influential paper, “Managing Codified Knowledge” by Zack (1999) is reviewed here. The definition of knowledge and knowledge management, the benefits of knowledge management, the author’s rhetoric on the architecture of knowledge management and its...
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