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Analysis of Intellectual Capital Asset of Google

Introduction

With the rise of the economic knowledge, a significant increase is observed in the intellectual capital within an organization (Moon & Kym, 2006). This intellectual capital is considered as an intangible and significant capability resource for enterprises (Roos& Roos, 1997). This intellectual capital has been recognized as nonfinancial measures and other related component that actually helps the organization to drive the value of an enterprise. These components mainly include“Knowledge, experience, expertise rather than physical and financial capital found in the organization (Klein, 1998). Many researchers have been using models for assessing and analyzing the intellectual capital assets of enterprises and this assessment helps to determine the variables as an effective dimension for enterprise (Moon & Kym, 2006). Other researchers have identified that the components of organizational structure including strategy, system and culture are those variable that are analyzed to determine the intellectual capital asset of a company (Saint-Onge, 1996). Get quality assignment writing service 

This paper identifies the way organizational structure and ethical behavior affect the value of Google’s intellectual capital (promotion, innovation, decision making and productivity). Throughout the paper main focus is on the organizational structure of Google and discussed the Google’s organizational structure as an intellectual capital asset. This paper contains the analysis of the effects of Google’s organizational structure and ethical behavior on the intellectual capital asset. This paper is designed in such way that it first identifies the intellectual assets of Google and organizational structure. It latter evaluates the effects of organizational structure and ethic behavior on the intellectual capital asset. 

Organizational Intellectual Capital Asset

According to Stopford (1997), the information age has changed the traditional industry along with their intellectual capital and role of intellectual capital. This fusion has brought innovation in intellectual capital that adds values to the company (Holland, 2006). According to Castro et al (2007), there are a lot of asset that a company holds but not all assets have same value. He further explains that, some resources are less important to company and some are more important than other and intangible assets are example of it. Workforce of an organization is the most important intangible asset because without people there are no other intangible assets. No technology is useful without workforce. There is no existence of brand, innovation, or knowledge if there is no workforce which ultimately leads to no customers. Knowledge, innovation, promotion, and technology are important intangible asset and these intangible assets are the essential drivers of success but if in the absence of workforce their effects will be diminished because it is workers who directly or indirectly create all other intangible assets. This is also regarded as human capital (including people possessing explicit knowledge and ability to generate values and attitudes, aptitudes and know-how of organization) (Castro et al, 2007). 

Intellectual Capital Asset of Google

Intellectual asset of a company is composed of tangible and non tangible asset and together these assets are the about value creation. Google, with the revenues of $7.29 billion (Google Investor Relations, 2010, para. 3), is the leading search engine in the world. The pursuit of mission as to organize the world’s information and make it universally accessible and useful has led the Google to achieve this position. Google just like all other enterprises is structured as enterprises which consists of organizational structure and depends on financial asset for the growth. Except financial growth Google also possesses intellectual capital asset which includes innovation, promotion, business relationship, customer loyalty, reputation, hiring process and employees, culture, patent and technology. These intellectual capital assets contribute to strategic values of Google. The gathering and organization of information from all over the world for its customers has proven to be a lucrative business for founder of the organization. The success part of the Google is hidden in the corporate intellectual capital management. Intellectual capital asset of Google does not only refer to resources of the organization but also capabilities. To Castro et al, (2007), capabilities of an organization arise from the combination and coordination of different resources exists within the organization. According to Castro et al, (2007), intellectual capital has been recognized as source of economic wealth for an organization but Teece (1998) has much stressed on the appropriate application of this asset to gain maximum benefit out of it. Teece (1998) has also emphasized on relatively new application of this asset. The management and control of intellectual capital asset is an essential and important part of organization but management of intellectual property involves difficulties as a result of problem related to identification, measurement and strategic assessment. 

In the situation of Google, to analyze the organizational structure as an intellectual capital asset, it is significant to employ the models of intellectual capital which not only allow comprehending the nature of the intellectual assets that Google has, but also to carry out their measurement as an organizational structure. In order to assess the joint perspective of intellectual capital including strategic resources and intellectual capital asset, it is important to assess different intangible asset because every intangible asset is not intellectual capital asset. In addition, however, some intellectual capital assets are of strategic nature but they do not have the same value (Castro et al, 2007). Thus the importance of intangible assets is determined by the assessment. The determination of such differences is considered as useful for management in strategic management. They could also be helpful in decision making process about the action required for performing a task or implementation of the policy that allow the protection, maintenance and development of valuable intangible assets.

 

According to Castro et al, (2007), there are important indicators used for indentifying the intellectual asset for an organization. Different contributors have defined different frameworks for different elements of intellectual capital assets. As identified by these contributors, the important components found are human capital; structural capital; and customer capital. According to these frameworks, human capital includes the employees or the workers who contribute in organization with their knowledge and they are paid for that. In the case of Google employees have great contribution in the growth and development of organization as successful business and the human capital is the most critical intellectual capital asset of Google as their innovation and knowledge is also considered as the pillar of the organizational structure of the company. Organizational capital has been defined as combination of formal and informal knowledge which defines effective and efficient structure of organization and develop organizational activity. Besides, there are other assets included to define intellectual capital asset of Google such as business capital, technological capital and social capital. 

Technological capital is such asset which refers to the contribution of knowledge directly connected to the developmental activities and functions of the organizational technical system. Business capital refers to value or the norms of the organization relationships through which it maintains the main partners connected with its basic business processes, important customers and allies. Social capital is the value to the organization of the relationships which it maintains with other social agents and its surroundings (Castro et al, 2007).

Conclusion

After analyzing the important components of intellectual capital asset it is significantly important to define here those intellectual capital assets of Google including promotion, innovation, and employee, and decision making, and productivity are the important parts of organizational structure. These intellectual components are directly linked with the organizational structure including management level, administrative level and work level. Different level of task is performed by the different administrative level and predefined functions of each administrative level determine the intellectual capital asset of each function. Google with the best use of innovation by organizational structure has created a free intellectual capital. Employees are allowed to come with creative ideas and overall organizational culture is reflected in the vision of the organization. Moreover, this reputation helps with building good business relationships and customer loyalty.