TEPEK Training Guidelines

1. TEPEK Training Guidelines Approaching a case study

2. Analysing the Company’s History, Development and Growth • Start by preparing a questionnaire • Questionnaire to be tailored to company type • Refer to table of indicators circulated in training session 1 (Key Course Text 1.2 The Intellectual Capital Perspective)

3. Indicators – key facts to refresh your memory • An indicator is “a reasonable trustworthy estimation of an unknown value” (Stam, 2002) • Please be aware that the most common mistake that is being made, working with indicators, is that they are perceived to be objective truths. An indicator is nothing more than a signal for attracting attention, be it a very valuable signal. • Indicators aid in monitoring the progress and success of management initiatives, theydetermine whether certain circumstances exist or criteria have been satisfied. • A well designed intellectual capital report consists of a balancedcombination of indicators.

5. Analysing the Company’s History, Development and Growth • Research the company’s past strategy and structure • Identify the key developments in the current business operations • Analyse the functional competencies of the company

6. Prepare a Resource Distinction Tree • Start by making an inventory of the most important resources of the company • Divide them into the five forms of capital • Monetary • Physical • Human • Organizational • Relational • The resource portfolio may be set out in a resource distinction tree (RDT)

7. Example Resource Distinction Tree Bial’s resources All resources Human Organizational Relational Physical Monetary • R&D knowledge • Ability to participate in networks • Ability to deal with cultural differences • Contracts definition knowledge • Production and distribution knowledge • Motivation and commitment • Problem solving attitude • R&D process • Patents • Quality control systems • Brand and reputation • Production and assembly • Distribution • Databases • Information systems • Research institutions • Cultural institutions • Social institutions • Government agencies • Customers • Community • Factory facilities • Equipment • Products • Raw materials • Revenue from in-licensing agreements • Revenue from out-licensing • Revenue from subsidies

8. Bial’s RDT sources • 27 different sources were identified • Essential sources: • R&D knowledge • R&D process • Patents • Plant facilities and equipment, products, production and assembly competences • Investments in plants and equipment • High quality raw materials • Quality systems; quality certifications (ISO 9001 Quality management certificate entitled sales to the EU) • Information systems • Social responsibility practices • Monetary resources (EU funds to finance research)

9. Grouping and Weighting of RDT • Determine the relative importance of different resource categories in line with the company’s strategic intent. • I.e. their relative importance to the company’s ongoing ability to create value. • E.g.The initial RDT of Bial contained 27 resources which were grouped into 16 categories and were given their relative weight.

10. Grouping and weighting Bial’s resources All resources 40% 20% 15% 10% 15% Human Organizational Relational Physical Monetary R&D knowledge Scientific community Plants & equipment Revenues R&D structure 75% 70% 50% 60% 80% Subsidies Attitude Customers Products Patents 30% 20% 15% 10% 25% Raw materials Brand & reputation Government agencies 20% 10% 10% Core competencies 15% National and local community 10%

11. Preferred route; Intellectual Capital Navigator (ICN) or Intellectual Capital Statement (ICS) • Decide how the resources are to be deployed to achieve the company’s desired position. • Option 1: Intellectual Capital Navigator • Option 2: Intellectual Capital Statement