Lidia García-Zambrano

The intangibles’ mindset of CFOs’ and corporate performance

This paper aims to analyze the companies’ view about the financial valuation of intangibles relevance and its influence on corporate performance. Based on the theory of resources, the role of intangibles in business competitiveness is justified. The traditional factors of production have become secondary, while the success is primarily based on the development and utilization of intangible resources. One of the main problems in managing the intangibles appears to be that, there is a general lack of information about them. Therefore, financial valuation of intangibles will result in significant benefits to the organization that will help determine business strategy, process design as well providing competitive advantage. It follows the hypothesis of this work, the greater known about their intangibles and the greater sensitivity to the financial valuation of them, the better performance. To achieve this objective, a field study is done, doing telephone calls to Basque Country companies’ financial managers.

Impact of Relational Capital on Business Value

Intangible resources, or intellectual capital, are currently known to be the drivers of economic growth. Todays society is known as the knowledge-based society. Knowledge is the main strategic resource that is capable in itself of generating new knowledge. Therefore, intangible resources have become the competitiveness base for any company, as their ownership provides the company with the opportunity to generate sustainable competitive advantage and increases the value of the company. One of the most important dimensions of intellectual capital is the relational capital (Prahalad and Ramaswany, 2000). Relational capital is defined as the knowledge embedded in the relationships with any stakeholder that influences the life of the organisation. Relationships with stakeholders are the necessary condition for building, maintaining and renewing resources, structures and processes over time, as firms can access critical and complementary resources through external relationships. Some authors [Prahalad, CK and V Ramaswamy (2000). Co-opting customer competence, Harvard Business Review, 78(1) 79–87.] suggest that the customer has become a new source of obtaining competitive advantage for the organisation. The customer and satisfaction have become the aim of companies as it is only way to attain sustainable performance. Companies that improve their relations with their clients, and the satisfaction of the latter, will therefore achieve a better business performance and will increase their value. There is a gap in the literature about this topic. Few works have been done in this aspect; for that, our research thus seeks to analyse whether customer satisfaction is reflected in the total value of the intangibles. A sample of the main Spanish companies, those quoted on the IBEX-35 (the main index of reference of the Spanish Stock Exchange, comprising the 35 companies with greatest liquidity on the Spanish Stock Exchange) are included and the relationship between the relational capital, measured by satisfaction of customers variable, and the total value of the company has been analysed. A positive relationship is then obtained between both variables, that is, improved customer satisfaction is positively associated with an increased business value, but that is not statistically significant.

Proactive Management of Core Competencies, Innovation and Business Performance in a Period of Crisis: The Case of Spain

At present, it is known that intangible resources are the drivers of economic growth through innovation; intangibles have become the key resource for generating competitive advantage; what’s more, they are the fundamental source of business value. Numerous authors think that a concrete type of intangible resources, the core competencies, are the key factors that drive innovation and thus are able to be a source of competitive advantage. Nevertheless, there are few studies that analyse the relationship between investments in core competencies and business performance. For that reason, our objective is to test whether the proactive management of core competencies, through the investment into them, is translated into improved results in a period of crisis.

The Relationship Between Proactive Management of Core Competencies and Business Performance

Intangible resources drive economic growth, and are considered the fundamental source of business value. Intangibles have become key factors in generating competitive advantages, despite the fact that traditional financial reporting continues to focus on tangible assets. This is primarily due to the fact that the majority of intangible resources are invisible and considered a current expense on financial statements.Top level management on the other hand may be discouraged from investing in intangible resources, even though numerous studies link investments in R&D, advertising, and training, to the performance of the company. Studies also suggested that core competencies, as a form of intangible human capital, are critical competitive factors and essential elements of corporate competitive advantage. Despite that, few studies analyse the relationship between investments in core competencies and corporate performance. The main objective of this study is to attempt to fill the gap in this area of the current literature and test the extent to which investments in core competences, translates into direct improved organisational performance.The field study was conducted by making telephone calls to the financial managers of different Basque Country companies. Their responses and the financial performance of their companies was analysed and reported in this study. Results from the study show that firms with managers whom affirm their investment in intangible resources have better overall growth and sustained economic development.

Key Relational Competencies and Business Performance: Evidences for Spanish Companies

This paper seeks to test the existence of links between key relational competencies and business performance. With information from a survey conducted among business managers from Spain, and business performance data for 2009-2011 obtained from the Intertel database, non-parametric contrasts were performed in order to verify such links. The results show a positive link of the economic variables analysed with the key competencies linked to Relational Capital for Spain for 2009-2011 period, being only the differences in the growth in sales variable statistically significant. This relation shows the importance that key competencies linked to relational capital has to increase business results, during economic crisis period.