ITM 407 Study Guide - Disclose

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Describe the three types of intangible assets: individual competence, internal structures and external structures.
- Individual Competence: is people’s ability to act in various situations. It includes skill, education, experience, values and social
skills. Competence cannot be owned by anyone or anything but the person who possesses them, because when all is said and done
employees are voluntary members of the organization. A case can, however, be made for including competence in the balance sheet,
because it is impossible to conceive of an organization without people. People tend to be loyal, if they are treated fairly and feel a
sense of shared responsibility. That is why companies are generally willing to pay some kind of compensation to those who retire, or
have to be laid off.
- Internal Structures: consists of patents, concepts, models, and computer and administrative systems. These are created by the
employees and are thus generally "owned" by the organization, and adhere to it. Sometimes they can be acquired from elsewhere.
Decisions to develop or invest in such assets can be made with some degree of confidence, because the work is done in-house, or
bought from outside. Also the "culture" or the "spirit" belongs to the internal structure. The internal structure and the people together
constitute what we generally call the "organization"
- External Structures: consists of relationships with customers and suppliers, brand names, trademarks and reputation, or "image".
Some of these can be considered legal property, but the bond is not as strong as in the case of internal assets because investments in
them cannot be made with the same degree of confidence. The value of such assets is primarily influenced by how well the company
solves its customer’s problems, and there is always an element of uncertainty here. Reputations and relationships can be good or bad,
and can change over time.
Give examples of each of these that are of value to Buckman in his business at Buckmans labs.
- Individual Competence: its employees skills and experience that they have gained from the company
- Internal Structures: System which they created that is unique for the company
- External Structures: Reputation
How would you suggest that he protect each of these assets, especially his intellectual property?
- Copyright Protections
- Patents
- Trademarks
Do you think that Buckmans should have to pay a license fee for the technology or should he be able to buy it
outright?
-
Do you think that Buckmans should be able to change the software to meet their needs?
- I think they should be changing the software to meet their needs because the company shouldn’t be
investing their time/money, to find and have software that they are not using because it is wasting their
money buying software that they don’t use and their resources in maintaining the software.
What are the three levels Brey suggests we should be aware of and what are the disciplines that we should involve in
addressing the issues?
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