Proceedings of the 12th European Conference on Knowledge ...

Camilo Augusto Sequeira and Eloi Fernández y Fernández
We define Organizational Competence (Sequeira, C.; Fernández, E. F; Borges, M. C. (2009)) as a set
<strong>of</strong> intangible assets, backed by tangible assets, in a manner both interrelated and synergistic, and
with <strong>the</strong> potential to create value. Although <strong>the</strong> focus <strong>of</strong> organizational competence is <strong>the</strong> organization
itself, <strong>the</strong> approach is comprehensive, i.e., it includes relationships with suppliers, partners, customers
and o<strong>the</strong>r interested parties (stakeholders).
Organizational Competence is made up <strong>of</strong> two basic components: a) <strong>the</strong> component formed by <strong>the</strong>
group <strong>of</strong> individuals, who instantiate <strong>the</strong> competence, and who contribute with skills, knowledge and
attitudes; b) <strong>the</strong> component formed by <strong>the</strong> internal and external context, i.e., available technologies,
work infrastructure, explicit knowledge, norms, values, management processes, environment, etc.,
fostering <strong>the</strong> development <strong>of</strong> organizational competencies to a greater or lesser degree.
The method considers processes and organizational competencies in synergy ra<strong>the</strong>r than in isolation.
As noted earlier, some management methods tend to focus only on processes or competencies.
Ano<strong>the</strong>r example is that <strong>of</strong> business process re-engineering, which guides redesign efforts to reduce
costs. While this may be necessary, it is not sufficient by itself because it can lead <strong>the</strong> organization to
destroy value by excluding important sources <strong>of</strong> added value.
Therefore, to start <strong>the</strong> qualitative analysis (evaluation), <strong>the</strong> method regards as essential <strong>the</strong>
stakeholder expectations vis-à-vis a particular future scenario; and <strong>the</strong> present status <strong>of</strong> <strong>the</strong>
organization.
The concepts <strong>of</strong> assessment and valuation <strong>of</strong> assets are not always clear, particularly among
managers far from <strong>the</strong> financial area. To value tangible or physical assets, different methods (Titman,
2008; Koller, 2005; Copeland, 2001) already exist that are well consolidated and accepted by both
parties, i.e., <strong>the</strong> sellers and buyers <strong>of</strong> such assets. Still, <strong>the</strong> valuation <strong>of</strong> tangible assets is a task that
requires a certain degree <strong>of</strong> discretion and great effort. And, when it comes to intangible assets, <strong>the</strong>
difficulty is magnified because, in general, <strong>the</strong>re is not always a market for intangible assets:
intangibles are useful or attractive, mainly, to <strong>the</strong> organization to which <strong>the</strong>y belong.
In order to clarify <strong>the</strong> concepts <strong>of</strong> value, assessment and valuation we will use <strong>the</strong> description <strong>of</strong>
Andriessen (2004) as regards Valuation and Measurement <strong>of</strong> Intangibles. Andriessen (2004 pp. 11-
15) outlines what is meant by Financial Valuation, Value Measurement, Value Assessment and
Measurement, using a procedure that was adapted and illustrated in Figure 1:
Financial Valuation,
Value Measurement, Value Assessment and Measurement
Is <strong>the</strong>re a value scale
we can use that reflects
usefulness or desirability?
YES
Is money <strong>the</strong> unit used
on <strong>the</strong> value scale?
YES
FINANCIAL VALUATION
Figure 1: Valuation and Evaluation
NO Is <strong>the</strong>re a variable whose
state can be observed?
NO
NO
MEASUREMENT
Can <strong>the</strong> value be translated
into observable criteria?
909
YES
YES
VALUE MEASUREMENT
NO
EXIT
VALUE ASSESSMENT