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Organisational Capital: The Power of an Economic Metaphor: Organisational Capital in German Establishments

Author

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  • Dieter Sadowski
  • Oliver Ludewig

    (Institute for Labour Law and Industrial Relations in the EC, University of Trier)

Abstract

The concept of organisational capital is multifaceted and often inadequately demarcated from related concepts like human or social capital. We define organisational capital as an agglomeration of technologies – business practices, processes and designs – that enable firms to gain a sustainable competitive advantage. Since organisational practices and their combinations are the primary components of organisational capital, it is inseparably linked to the organisation, which distinguishes it from other types of capital. Organisational capital is predominantly non-tangible, non-fungible and idiosyncratic; therefore it is hard to measure. Measuring it by using additive indices of different practices or system variables presumes a concrete functional form for the link between organisational practices and the level of organisational capital, which is in reality unknown. Following an operationalisation of Lev and Radhakrishnan (2003) we approximate the level of specific organisational capital, using the data of the IAB-establishmentpanel to control for several influencing variables. Unlike Lev and Radhakrishnan, we control for the effects of human and social capital and hence isolate the effects of organisational capital.

Suggested Citation

  • Dieter Sadowski & Oliver Ludewig, 2003. "Organisational Capital: The Power of an Economic Metaphor: Organisational Capital in German Establishments," IAAEG Discussion Papers until 2011 200302, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    • Handle: RePEc:iaa:wpaper:200302
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    References listed on IDEAS

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    Cited by:

    1. Pablo Gonzalo Ramirez & Toyohiko Hachiya, 2006. "Measuring Firm-Specific Organizational Capital and its Impact on Value and Productivity: Evidence From Japan," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 9(04), pages 549-574.
    2. Pablo Gonzalo Ramirez & Toyohiko Hachiya, 2006. "How Do Firm-Specific Organizational Capital And Other Intangibles Affect Sales, Value And Productivity? Evidence From Japanese Firm-Level Data," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 265-282.
    3. Tomohiro Yamaguchi, 2014. "Intangible Asset Valuation Model Using Panel Data," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 21(2), pages 175-191, May.
    4. Pablo Gonzalo Ramirez & Toyohiko Hachiya, 2008. "Measuring the Contribution of Intangibles to Productivity Growth: A Disaggregate Analysis of Japanese Firms," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 11(02), pages 151-186.

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