Key Concepts in Managing Intangible Organizations

Intangible Assets
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Anneke Zwart
Student (University), Netherlands

Key Concepts in Managing Intangible Organizations

Governments, businesses and other institutions recognize the increasing importance of intangibles in the economy. The tangible economy (raw materials, machines and goods that are visible), is shifting towards an intangible one in which success depends on managing knowledge, ideas and services that are not directly visible. What is sometimes overlooked is that approaches and tools to successfully manage the tangible part are quite different from approaches needed to successfully manage the intangible part of organizations.
Adams (2008) describes four key concepts in successful management of intangible organizations:

1. INNOVATION AS STRATEGY: while strategies in tangible organizations can be implemented and executed within a defined market space, the intangible market is characterized by its dynamics, its quick changes within the market. As a result, it is not useful to determine a strategy from the beginning (a so called "deliberate strategy"), since this strategy will probably be outdated as time passes by. Rather, there should be a so-called innovation strategy (compare also: emergent strategy). Such a strategy constantly seeks for new ways to utilize knowledge to create value for both consumers and the organization themselves. This can be stimulated by establishing an ecosystem where new ideas can be generated, developed and executed.

2. ORCHESTRATION APPROACH: in the tangible economy, mechanization and mass production are instruments to increase productivity levels. By strictly controlling those systems, efficiencies could be created. In the intangible economy, the productivity of workers -dependent on of employees’ knowledge and the usage of their knowledge- cannot be strictly defined or determined. It is often the case that leaders of knowledge organizations do not understand the work of their employees. Therefore, orchestration is a better management approach in this case. See Mintzberg's covert leadership. Such a strategy sees the modern leader as the conductor of an orchestra. Even though the conductor is not able to know the details about each individual’s instrument and play. He or she only selects the music and makes sure that the musicians play well together. In an organization, the leader can only put problems in context and help his/her employees in their way of thinking. However, the leader lets the employees do the rest of the work.

3. NETWORK MAPS INSTEAD OF ORGANIZATIONAL CHARTS: while the tangible economy relies on organizational charts to control and monitor the organization, such a chart often fails to fully explain the situation in a knowledge economy. This is because of the existence of cross-functional teams, external partnerships and co-creation with customers. An approach that better fits in a knowledge organization is to map both the organization and its interactions, for example by social network mapping. This enables and facilities interactions between knowledge workers and external partners, consumers and others.

4. FOCUS ON REPUTATION: the tangible economy measures performance in terms of cash and profits created. Although profits remain important in the knowledge economy, it is also important to look at other effects. Increased interdependencies between organizations, external partners and consumers make organizations to be part of a bigger community. This makes social and environmental issues of more concern than before. Therefore, maintaining a good corporate reputation is critical for sustaining competitiveness for knowledge organizations, although tangible organizations also gain from a good reputation.
Source: Adams, M. (2008) "Management 2.0: Managing the Growing Intangible Side of your Business" Business Strategy Series Vol. 9 Iss. 4 pp. 190 - 200.


Brian Flagg
Management Consultant, United States

Strategy for Intangible {what?} Markets? Organizations? Companies?

Good introduction to the management of internal strategy in an environment characterized by frequent... Sign up

Director, Mexico

Combined Tangible and Intangible Strategies

A valid approach. Also add that in today's global markets we can see a combined form of tangible and... Sign up

kenji hachiya
Business Consultant, Viet Nam

Intangible Organization

It's a quite interesting topic to be discussed. In the case of Japanese companies, they emphasize on... Sign up

Jaap de Jonge
Editor, Netherlands

Intangibles Management as a Source of RBV or as a Core Competence

@henji hachiya: thanks for your valuable reaction. You hint rightly at 2 additional management conce... Sign up

Consultant, India

Managing Intangible Assets

Intangible assets have no physical existence but are highly remunerative in the future. Among many i... Sign up

Ahmed Ibrahim
Management Consultant

Managing Intangibles with Smart Partnerships

Anneke Zwart I agree with you and all those who reacted to your opinion, but may I ask: how about Sm... Sign up

Dr. Schoenborn
Management Consultant, Germany

Management of Intangible Organizations

The mentioned "concepts", or maybe better "ideas", tend in the right direction, but there should be ... Sign up

alwatik abdelkrim
Consultant, Morocco

Managing Intangible Assets is Like Conducting Informal Tasks

This is an important subject. Intangible assets remind me of formal and informal tasks. When when we... Sign up

Suhartono Dr. MBA., MA
Director, Indonesia

On 3. Mapping an Intangible Organization

I agree that the most useful chart for an intangible organization is to structure the social trust r... Sign up

Kingsley Atseyinku
Student (MBA)

On 3. Network Plan in Managing Intangible Organizations:

I totally agree that a Network Plan is better than an Organization Chart as most intangible organisa... Sign up

Ben Smith
Manager, United Kingdom

Network Mapping Tools?

Great subject; love the Conductor and Covert Leadership concepts. The importance of Emotional Intell... Sign up

Nomi Hattingh

A Measurement for Intangibles

@Ramakrishnan: I work in a government agency; within our risk management processes we have set finan... Sign up

Suhartono Dr. MBA., MA
Director, Indonesia

Network Mapping Software Tools

@Ben Smith: Yes, sure you can look for and download the free 'Inflow' application or 'Pajek'. You ca... Sign up


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