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It is widely accepted that intangible or soft factors have a substantial impact on
organizational performance – a damaged reputation can destroy a business, strong staff
motivation can drive powerful growth, proprietary knowledge can give rise to market-leading
products, and so on. But there is a challenge in making practical use of this general
understanding to steer strategy, because of terminology that is overly wide-ranging,
ambiguous and inconsistent. This chapter offers definitions of tangible and intangible
resources that is clear and usable, and identifies three major categories into which
intangible factors mostly divide:
- Psychological factors concerning the state of mind of key groups, especially customers
and staff, but also investors and other stakeholders
- Information-based resources, such as data, technology, knowledge
- Certain quality factors that must be built up and sustained over time
The chapter then gives frameworks for working with these types of intangible, and examples
of how they feature in real-world situations.
Key issues addressed
- Classifying resources and capabilities to give a clear specification of intangible resources
- Three main classes of intangibles affecting the tangible heart of the strategic architecture: psychological factors, information-based resources, and quality-related items
- The distinction between current quality driving behavior for current customers vs. reputation influencing potential customers
- Perceptions that build up to threshold levels where they trigger big changes in behavior
- Problems with intangibles that bring the system back into balance, though not for good reasons
- The decay of information-related intangibles, causing a need to rebuild, and the key role of information systems strategy
- Knowledge as a higher-level concept than data or information, requiring effort to develop and maintain, but with important effects for many firms
- How quality factors, not all of which are strictly "resources" contribute to strategic performance
Lecture segments associated with this chapter are:
Class 9.0 - Summary and class overview - (14 min)
Class 9.1 - State of mind' factors - (11 min)
Class 9.2 - Quality-related intangibles - (8 min)
Class 9.3 - Information-base factors - (8 min)
Notes:
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items for which you are currently registered see My Account.
You may also use items from the worksheet and exercise links (above) and other optional
references from the links to the right.
The worksheet materials are available to registered users.
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If you are subscribed to one or more segments associated with this chapter suggestions for learning more,
and making use of the ideas and frameworks are provided.
Explore how intangible factors – reputation and staff morale –
can be damaged, and their impact on performance
Additional materials are available to registered teachers as
well as low cost access to the complete course. Login here or
register for more information
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Other resources and links
Software
Download the mystrategy reader for use in the worksheets and exercises here
Books
Charles J. Fombrun, 1996, Reputation: Realizing Value from the Corporate Image, Harvard Business School Press; Boston.
Mark Lutchen, 2004, Managing IT as a Business: A Survival Guide for CEO's, Wiley: Hoboken NJ.
Chris Collison and Geoff Parcell, 2004, Learning to Fly: Practical Knowledge Management from Leading and Learning Organizations, Wiley:
Barrie Dale, 2003, Managing Quality (4th Edn), Blackwell: Oxford, Chapter 3.
George Eckes, 2001, The Six Sigma Revolution: How General Electric and Others Turned Process into Profits, Wiley
John Maxey, David Rowlands, Michael George and Malcolm Upton, 2005, The Lean Six Sigma Pocket Toolbook: A Quick Reference Guide to 70 Tools for Improving Quality and Speed, McGraw-Hill: New York
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