Intellectual Capital and Financial results: A Case Study

Knowledge has become the primary ingredient of a company's performance and its competitive advantage. Knowledge assets therefore, and the potential of what it represents, has become an increasing concern for companies, and as a consequence, the concept of Intellectual Capital arises. If a company aims to succeed at developing its competitive advantage, knowledge assets should be considered an important resource as it is the raw material from which financial results are obtained. This Case Study aims to determine whether Intellectual Capital is presented and valuated in a small company working in the logistics sector, and if it has an impact on the financial performance. The Case Study utilises a pragmatic and unique, holistic and exploratory approach. Data collection was carried out mainly through interviews and observation centred on the Intellectual Capital elements (Human Capital, Structural Capital and Relational Capital) and on the financial performance, conducted on two elements from different levels of authority and responsibility within the company, a director and an operation employee. A Likert scale of 5 points was used, and the study concluded that both participants interviewed, shared a similar view of Intellectual Capital and financial performance. It was also concluded that the company evaluated Intellectual Capital, in general, and the different capitals in particular, as follows: 1) In terms of the Human Capital element, the employee's formation and training, skills, teamwork, internal relations and knowledge share was valuated; 2) In terms of the Structural Capital element, the company exhibited a supportive culture, critical to motivate employees to perform well, and the company exhibited, as well, a low hierarchical distance, with bureaucracy being practically non-existent and the company is focusing on innovation for competitive advantage; 3) In terms of the Relational Capital element, the company cares about customer satisfaction, but this Intellectual Capital component was less valued; 4) Finally, with regards to financial performance, the company had a positive result over the years, although yields have stagnated recently, and expenses have increased due to the current international crisis. Consequently, it was concluded that in this company, Intellectual Capital was valuated and the case study suggests that there is a relationship with financial performance