IMPORTANCE OF HR AS AN INTANGIBLE ASSET IN ORGANIZATIONS: DEVELOPMENT OF THE CONCEPT(2)

CONCEPT(2)

Traits of companies treating HR as Intangible Assets

According to researchers Dave Ulrich and Norm Smallwood (2004), companies also possess other abilities, beyond these tangible assets, to create, innovate, and persuade consumers to buy from them instead of a competitor in the same industry. These “organizational capabilities,” Ulrich and Smallwood clarify, are frequently labelled as intangible asset. These, intangible assets are what actually contributes much of the value and wealth for the company. These intangible assets are, for example, the company’s “distinctive competencies,” skills, and abilities which differentiates itself from its competitors. The increase in the value of intangible assets is also the direct beneficiary of the company’s investment in such functional areas as human resources, infrastructure, intellectual property, communications, etc.

According to a study published in the Harvard Business Review, companies possess eleven identifiable traits when they place high value in their intangible assets. They are:

1. Talent – Companies are good at attracting, motivating, and retaining competent and committed people.
2. Speed – Companies are good at making important changes rapidly.
3. Shared Mind-Set & Coherent Brand Identity – Companies are good at ensuring that employees and customers have positive and consistent images of and experiences with our organization.
4. Accountability – Companies are good at obtaining high performances from employees.
5. Collaboration – Companies are good at working across boundaries to ensure both efficiency and leverage.
6. Learning – Companies are good at generating and generalizing ideas with impact.
7. Leadership – Companies are good at embedding leaders throughout the organization.
8. Customer Connectivity – Companies are good at building enduring relationships of trust with targeted customers.
9. Strategic Unity – Companies are good at articulating and sharing a strategic point of view.
10. Innovation – Companies are good at doing something new in both content and process.
11. Efficiency – Companies are good at managing costs (Ulrich 2004).