Proceedings of the 8th International Conference on Intellectual ...

The Intellectual Capital for University Ranking: A
Conceptual Framework Study for Indonesian Higher
Education Insitutions
Gabriel Prananingrum Aryanindita and Andy Susilo Lukito Budi
Atma Jaya Catholic University <strong>of</strong> Indonesia, Jakarta, Indonesia
gabriel.prananingrum@atmajaya.ac.id
andy.susilo@atmajaya.ac.id
Abstract: Intellectual Capital (IC) has been widely discussed by researchers, both from business and academia.
It becomes part <strong>of</strong> intangible assets that are difficult to measure and manage. In <strong>the</strong> academic world, <strong>the</strong>
management <strong>of</strong> intellectual capital is rarely a concern <strong>of</strong> researchers and as a result <strong>the</strong>re are no solid ad generic
indicators to be used so far. This study explores <strong>the</strong> components <strong>of</strong> IC consisting <strong>of</strong> human capital, structural
capital and relational capital proposed by Bodnar et al (2008) and developes indicators <strong>of</strong> university's
performance rating by <strong>the</strong>se components. This study compares <strong>the</strong> indicators with <strong>the</strong> existing university ranking
model from Times Higher Education (THE) University World Ranking. Discussion has been done to compare
between <strong>the</strong> proposed model and <strong>the</strong> THE ranking. The results showed that <strong>the</strong> IC component can be used as a
guide in assessing <strong>the</strong> performance <strong>of</strong> <strong>the</strong> university. It shows similarities with method used in THE ranking. As a
result, <strong>the</strong> proposed model is potential for fur<strong>the</strong>r empirical studies on universities. In <strong>the</strong> effort to expose <strong>the</strong>
intelectual capital <strong>of</strong> <strong>the</strong> universities, <strong>the</strong> study can vary from between to across countries. Fur<strong>the</strong>r study is also
suggested in expanding <strong>the</strong> comparison model with o<strong>the</strong>r existing university ranking model.
Keywords: intellectual capital, university rankings, human capital, intangible asset, THE ranking
1. Introduction
Intangible asset has pr<strong>of</strong>oundly become big issue over <strong>the</strong> last ten years. One important hot issue, for
example, is how to measure and present in <strong>the</strong> effort to achieve organization goals. It does matter
nowadays because we also noted that <strong>the</strong>re is a shifting paradigm in organization reporting focus
from traditional measurement (such as financial measurement, business performance) to intangible
asset. Indeed, <strong>the</strong>re are many research works to support <strong>the</strong> shifting phenomenon.
European Commission in 2005 develops measurement <strong>of</strong> intellectual capital (IC). They define IC as
<strong>the</strong> combination <strong>of</strong> intangible resources and activities that allows an organization to transform a
bundle <strong>of</strong> material, financial and human resources in a system capable <strong>of</strong> creating stakeholder value.
They argued <strong>the</strong> valuation <strong>of</strong> IC will increase <strong>the</strong> performance <strong>of</strong> organization. Universities as one <strong>of</strong>
knowledge-intensive businesses should be also aware that <strong>the</strong>ir performance and competitiveness
depend even more on management <strong>of</strong> <strong>the</strong>ir knowledge resources. So, <strong>the</strong>y need relevant information
about <strong>the</strong> knowledge resources.
Universities and research organizations are producing knowledge; however, it is only a very small
proportion considering identifying, measuring and valuing intangible as part <strong>of</strong> an overall knowledge
management program (Canibano et.al, 2008). It is extremely important to measure intangibles since
<strong>the</strong>y are very hard to manage assets that cannot be described or measured. The European
Commission (EC) is pushing <strong>the</strong> reporting <strong>of</strong> IC by universities. A High-Level Expert Group set up by
<strong>the</strong> Commission Universities to use IC reporting both for <strong>the</strong>ir internal management and for diffusing
<strong>the</strong>ir activities.
Bodnar et.al. (2008) reported <strong>the</strong> management <strong>of</strong> IC in Corvinus University. Their research was based
on document analysis, survey and executive interviews. They found that although EC has pushing <strong>the</strong>
IC reporting, <strong>the</strong> case <strong>of</strong> Corvinus University revealed that <strong>the</strong> university has not developed a
standardized framework <strong>of</strong> IC’s management. None<strong>the</strong>less <strong>the</strong>re are some indicators, which strive to
measure <strong>the</strong> intangible resources but mainly occasionally.
Recently, World Rankings University measured by its teaching-learning activities and research. Times
Higher Education (THE) is one <strong>of</strong> world rankings university organization. It developed <strong>the</strong>ir rankings
by survey to <strong>the</strong> university around <strong>the</strong> world. They conducted questionnaire that’s filled by lecturers
and pr<strong>of</strong>essors at university. THE announced <strong>the</strong>ir rankings per year based on it survey.
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