UNIT NAME: HUMAN RESOURCE MANAGEMENT

UNIT CODE: HCBA 3109

SUBJECT: TERM PAPER

HUMAN CAPITAL

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 (by publicly listed companies) and can be found easily on the