There a number of reasons why firms want to measure IC and the predominant reason has been for strategic
or internal management purposes. Specifically, the reasons include :
(i) Alignment of IC resources with strategic vision. To support the implementation of a specific strategy
via a general upgrading of the work with the companies’ human resources (support and maintain a
strategy concerning the composition of staff as regards seniority, professional qualifications and
age. Through the description of the staff profile, measuring, discussion and adjustment become
possible).
(ii) To support or maintain various parties’ awareness of the company.
(iii) To help bridge the present and the past (stimulates the decentralized development of the need for
constant development and attention towards change).
(iv) To influence stock prices, by making several competencies visible to current and potential customers.
(v) To make the company appear to the employees as a name providing an identity for the employees
and visualizing the company in the public. Knowledge of employees and customers will stimulate
the development of a set of policies to increase customer satisfaction and customer loyalty.
(vi) Assessing effectiveness of a firm’s IC utilization - Allocate resources between various business units.
Extract full value from acquisition and joint ventures.
(vii) Determine the most effective management incentive structures.
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