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Strategic fit: Key to growing enterprise value through organizational capital

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  • Miles, Sandra Jeanquart
  • Van Clieaf, Mark

Abstract

Organizational capital is an intangible asset that is a continuous creator of value through generating above-normal revenue growth, innovation, operational excellence, and stakeholder relationships. The elusive nature of organizational capital stems from competing perspectives on how it can be defined and managed. This article presents a comprehensive model for understanding the critical process, components, and necessary linkages that result in increased enterprise value through the creation of organizational capital. Attention is given to the factors that influence organizational capital (fit among leadership, strategy, and organization design), its influence on human capital, and, ultimately, the impact on operational excellence, stakeholder capital, and the essential levels of innovation that drive capital efficient growth. Guidance is provided for the CEO, CFO, and CHRO wishing to harness the power of organizational capital and increase both current and future value of the firm.

Suggested Citation

  • Miles, Sandra Jeanquart & Van Clieaf, Mark, 2017. "Strategic fit: Key to growing enterprise value through organizational capital," Business Horizons, Elsevier, vol. 60(1), pages 55-65.
    • Handle: RePEc:eee:bushor:v:60:y:2017:i:1:p:55-65
    DOI: 10.1016/j.bushor.2016.08.008
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    References listed on IDEAS

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    1. Miles, Sandra Jeanquart & Mangold, W. Glynn, 2005. "Positioning Southwest Airlines through employee branding," Business Horizons, Elsevier, vol. 48(6), pages 535-545.
    2. Andrea L. Eisfeldt & Dimitris Papanikolaou, 2013. "Organization Capital and the Cross-Section of Expected Returns," Journal of Finance, American Finance Association, vol. 68(4), pages 1365-1406, August.
    3. Tim R. Holcomb & R. Michael Holmes Jr. & Brian L. Connelly, 2009. "Making the most of what you have: managerial ability as a source of resource value creation," Strategic Management Journal, Wiley Blackwell, vol. 30(5), pages 457-485, May.
    4. Baruch Lev & Suresh Radhakrishnan & Weining Zhang, 2009. "Organization Capital," Abacus, Accounting Foundation, University of Sydney, vol. 45(3), pages 275-298, September.
    5. Mangold, W. Glynn & Miles, Sandra Jeanquart, 2007. "The employee brand: Is yours an all-star?," Business Horizons, Elsevier, vol. 50(5), pages 423-433.
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    3. Hedan Ma & Xinliang Jia & Xin Wang, 2022. "Digital Transformation, Ambidextrous Innovation and Enterprise Value: Empirical Analysis Based on Listed Chinese Manufacturing Companies," Sustainability, MDPI, vol. 14(15), pages 1-20, August.
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    5. Diana Teixeira & Nelson Duarte, 2018. "Value creation: the internal perspective," Nowoczesne Systemy Zarządzania. Modern Management Systems, Military University of Technology, Faculty of Security, Logistics and Management, Institute of Organization and Management, issue 3, pages 235-243.
    6. McDowell, William C. & Peake, Whitney O. & Coder, LeAnne & Harris, Michael L., 2018. "Building small firm performance through intellectual capital development: Exploring innovation as the “black box”," Journal of Business Research, Elsevier, vol. 88(C), pages 321-327.
    7. Currie, Denise & McCracken, Martin & Venter, Katharine, 2022. "Avoiding the vicious cycle, engendering the virtuous circle: Understanding the interaction of human, social and organizational capitals in non-profit and voluntary organizations," Journal of Business Research, Elsevier, vol. 152(C), pages 17-28.

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