MIS Minicase Essay Example | Topics and Well Written Essays - 750 words

MIS Minicase - Essay Example Besides, a considerable share of the gross national product of developed economies is in intangible form (Nakamara, 45). An intangible is a non-monetary asset that used in production or supply of services and goods. It can either be used for administrative purposes or rented to third parties. Patents and copyrights are some of the examples of legally acknowledged intangibles that can be valued effectively. This is not the case for some intangibles like goodwill, brand equity, inter organizational relations and intellectual capital. It is inherently difficult to determine the intrinsic value of businesses that operate in fast changing markets and high research and development. Case in point is the treatment of employee training expenses; treated as expenses with no future value yet in the real sense the value of experienced employees exceed the training expense. The value gap of intangibles is further created by accounting systems that value them as assets that are not easily counted. However (Boulton, Libert, and Samak 21: 29-35) found out that the book value of many publicly traded companies rose from 5 percent to 72 percent of the market value in the period1978-1998. This shows that only a paltry 28 percent of value was reflected in the balance sheet. In their research (Ryan and Harrison 16: 11-40) discovered that IT investments elude conventional valuation methods because of hidden costs and benefits. Despite the challenges posed by the effective determination of intangibles, business organizations recognize that organizational performance is linked to intangibles like brand equity and organizational effectiveness. Intangibles deliver benefits that are not easily quantified a factor which relegates them to complimentary yet, they also form the basis of organizational success. Intangible benefits like customer satisfaction, employee coordination, access to information and improved