An Overview on Concept of Intellectual Capital and Its Importance

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1 An Overview on Concept of Intellectual Capital and Its Importance Reza Aghajan Nashtaei Department of Business Management, Islamic Azad University, Rasht Branch, Rasht, Iran Masood HeidarNia Department of Business Management, Islamic Azad University, Rasht Branch, Rasht, Iran Vahid Noshaddel M.A. of Business Management, Islamic Azad University Rasht Branch, Rasht, Iran Abstract (Corresponding Author) The term "intellectual capital" is used from Stewart's study (1991) as synonymous with intangible assets or assets of knowledge-based. Intellectual capital can provide new sources base that organizations does compete through it. Human capital deals with value added. In fact, human capital is Complex knowledge, skills, creativity and ability of employees' individual in fulfilling the task. Human capital management is in relationship with targeted measurement and it is a bridge between business strategy and human resource. In this paper, we express intellectual capital, human capital and human capital management. Keywords : Intellectual Capital, Human Capital, Human Capital Management Introduction The mobilizing of resources always been main task of banking system. Banks collecting surplus funds and play own traditional task by granting loans to applicants the mediation between depositors and borrowers. Usually in activities of a bank, attracting of financial sources are extremely important, because success in this area can be factor for success in other areas. Attract funds for each banks and the banking system are related both outside the organization factors and within the enterprise factors (Yong et al 2006). The Bank is a customer-oriented institution that should acting to attract customers and also increase customer satisfaction and customer retention. Because customer is main capital of bank. Bank without customer is meaningless and can not does survive. To achieve this important, is necessary in addition to COPY RIGHT 2013 Institute of Interdisciplinary Business Research 303

2 equipping and use of new banking facilities take action to creating a calm environment, safe, away from the hustle and having employees and managers of decided and interested to institute and its final goals. (Seleim et al 2007) Intellectual Capital : The term "intellectual capital" is used from Stewart's study (1991) as synonymous with intangible assets or assets of knowledgebased and its reason as "Capital" refers to economic roots. (De Castro & Saez 2008) The intellectual capital is an important and complex term that when be understood and exploited, can provide a new resource base and the organization to compete through it. Bontis believes that intellectual capital is trying to effective use from knowledge (Final product) in contrast information (Raw material). (Bontis 1998) Dimension of Intellectual Capital Human Dimension : It is most important types of knowledge assets or intellectual, because it is source of creativity. (Bozbura 2004) Communication Dimension : Communications capital is including value of current and future relations in an organization with its customers (Bontis 1998). In fact refers to organization's competencies for management and integration of external relations with stakeholders. (Seetharaman et al 2002) Organizational Dimension : Refers to existing structures and processes within an organization that employees using from it and take applied own knowledge and skills through this. (Vergauwen & Van Alem 2005) Previous Research 1. Maghoubi Nejad (1999) in his research as "Investigate the affecting factors on the increase in customer deposits in Rafsanjan'sTejarat Bank Branches" it deals the reviews most important effective factors in increasing deposits from view of customers. The results showed that improvement factors of social employees' relationships with customers, staff's good and appropriate features of individual, advertisements, and amount of paid interest and deliver of optimum services are very important. 2. Dimov& Shepherd (2005) carried an article as " Human Capital Theory And Venture Capital Firms" the results showed that specific aspects of human capital not included all dimensions of the COPY RIGHT 2013 Institute of Interdisciplinary Business Research 304

3 performance and achieved to most important result organizations make up itself capital team according to human capital, have higher performance. 3. Lawler (2009) in research as "Make human capital a source of competitive advantage" confirms this thread that many organizations' top managers believe one of the organization's main priorities should be finding the right people and develop them and believes organizations can be more focus on own customers by the performance improve of the organization's human capital and thus achieve to competitive advantage. Human Capital The concept of human capital is dealing with the added value that human providing for organizations (Armstrong & Baron 2007). The concept of human capital refers on the fact that people are investing in own. It done by tools as educate and training. (Woodhall 1987) Definition of Human Capital The term of human capital can be defined as a key element in production increase improving and also maintaining competitive advantage. For maintain the competitiveness in the organization human capital can be used as a means to increase productivity. (Schultz 1993) Features of Human Capital 1. Human capital discovered through the study of effects and results 2. Effects of human capital is not constant in over time 3. Determined pricing on human capital is impossible 4. Value of human capital is not by determined document or workbook 5. Using human capital is requires the improvement 6. Human capital is not amortized used to further 7. Human capital can not be separated from its owner 8. Maximum power production of human capital is not clear COPY RIGHT 2013 Institute of Interdisciplinary Business Research 305

4 9. Utilization of human capital is complicated 10. There is always the potential loss of economic value of human capital 11. The value period of human capital is size of its owner lifetime 12. Whatever investment in human capital be done during earlier periods of life, economic rate of return would higher 13. There are a differences between investments in human capital for men and women 14. Human capital is activated in production flow (Motevaseli & Ahanchian 2002) Benefits of Human Capital 1. Human capital improves the production quality and quantity 2. Human capital increases the value of labor 3. Human capital is component of the most important prerequisites to achieve economic growth 4. Other effects of human capital include wiser consumption and better use from inputs, increase social mobility, increased safety coefficient than achieving growth indices, reduce wastage, and complications resulting from the use of resources adverse (Motevaseli & Ahanchian 2002) Human Capital Management Human capital management is related targeted measures, and not merely measuring. Human capital management is considered a bridge between human resources and business strategy. In fact, human capital management is combined effort for manage and human capabilities develop to achieve higher levels of performance. (Gilaninia 2012) COPY RIGHT 2013 Institute of Interdisciplinary Business Research 306

5 Purposes Human Capital Management Human capital management following four major goals : 1. Determine human impact on the business activities and their share in creation of value for shareholders 2. Indicate this will human resources activities can make a monetary value. for example, the rate of return on investment 3. Establish policies to guide future strategies of human resources and business strategy 4. Providing diagnostic and predictor data that can provide information about the strategies and designed activities for improve the effectiveness of people management in organizations (Armstrong & Baron 2007) Conclusions Intellectual capital is trying to effective use from knowledge (final product) versus information (raw material). Intellectual capital has three dimensions as human dimension, communication dimension, and organizational dimension. Human capital can be used as a key element in productivity increases improving and also maintaining competitive advantage. The concept of human capital refers to the fact that people are investing in itself. The foremost advantage of human capital can be noted to improve of production's quality and quantity, and also increase the value of labor. Organizations can Benefit from human capital as a resource for innovation and organization strategic renewal by increase creativity and innovation through education and increase motivation. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 307

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