Improving intellectual capital model using analytic network process

This study proposes a new approach to prioritize the key company's indicators and relative elements following process model of intellectual capital (IC). The IC is improved by the application of analytic network process (ANP). The ANP provides the weights and priorities to all focused key performance indicators (KPIs) serving to the business concept. These obtained weights can also be passed to other relative elements, those of key success factors (KSFs) and IC categories, in the process model of IC. These prioritized KPIs, KSFs and IC categories assist the managers and decision-makers to focus on the crucial elements that mostly affect the business concept. Keyword-Intellectual capital, Skandia model, Knowledge management, Analytic network process, Multi-criteria decision making I. INTRODUCTION Under current circumstance, the business model is not focusing on quality differentiation strategy and low- cost strategy anymore. One of critical up-to-date strategies is knowledge-intensiveness or knowledge management (KM), because knowledge has played an important role in the organization operations. It could deliver several competitive advantages, including asset development, continuous improvement, capability enhancement and so on. One of crucial theoretical constructions in KM is a concept of intellectual capital (IC) since the IC is a measurement method for evaluating company's performance, especially for KM achievement (1). In the past business model, the organizations almost completely revolved around the tangible asset management whereas in current business operation, an intangible asset is now being considered as another critical concentration as important as the tangible asset. Moreover, in several current situations, intangible assets are much greater than the tangible assets. The intangible resources constitute the method of IC, and the IC must be appropriately managed in order to deliver the highest competitive advantages. As previously mentioned, the IC is a critical path of KM. Therefore, the concentration on the IC issue is unavoidable in current business operations. The structure of IC typically involves with the candidate indicators similar to other methods such as balanced scorecard (BSC), SWOT analysis and so on. The indicators of IC can be classified into several dimensions such as human, customer, financial, structural capital and etc. Nevertheless, the indicators of IC measurement model originally do not include the weights, so this characteristic makes the IC measurement model to lack the priority among those candidate IC indicators, and the managers have difficulties in making decision especially when they consider on the various indicators. Therefore, to correctly allocate resources and to focus on the important indicators, the prioritization among these considered indicators is critically required. In this study, a roof tile manufacturer was facing with the decreasing revenue because of the old business model. Therefore, to improve the business performance, the company decided to apply the IC measurement by initiating at the new product selection process. This remainder of this paper is divided into five parts that are literature review, methodology, research application, discussion and conclusion, respectively.