Improving company value: the role of human capital, structural capital, capital employed, investment decisions, and manager's attitude to risk

Abstract

Various studies show that companies and organizations have realized that knowledge-based capital is an important company asset. Managing the company's knowledge-based capital is one of the important tasks to encourage companies to compete with other companies. This study aims to identify the knowledge-based capital in human capital, structural capital, and capital employed by companies and its effect on investment decisions that affect company value. Through literature review, this concept also incorporates managers' risk attitude, which is part of ERM (Enterprise Risk Management) to develop the concept of Knowledge-based Risk Management (KBRM). Based on path analysis using AMOS, the result shows direct influence of human capital and capital employed on investment decisions is not significant. Meanwhile, the direct influence is significant. Investment decision does not mediate the relationship between human capital, structural capital, and capital employed on company value. Furthermore, managers' attitude to risk as risk-averse weakens the relationship between investment decisions and company value. Based on that result, companies need to reconsider managers’ behaviour in facing risks so that managers able to take risks when deciding on investments in the future and increase the value of the company.

Exploring property & real estate firm’s value: An intellectual capital perspective

“…Due to table 2, the results prove that the more organizational capital will increase the value of the company. Organizational capital will affect the increase in the company's ability to create higher profits, so that it can improve the firm value (Sumiati et al, 2022). Organizational capital can increase operational efficiency, because efficient organizational capital will increases productivity and reduces costs with the same result, so as to increase company profits which allows investors to trust the management of the company's working capital (Siti et al, 2020).…”

“…Structural capital shows the contribution of structural capital in value creation (Sumiati et al, 2022). Structural capital reflects the company's capabilities that come from systems, strategies, structures, processes, policies, culture, and the company's ability to innovate (Fajarini & Firmansyah, 2012).…”

“…This is done in the hope that their knowledge-based capital can increase competitive advantage to increase performance and even firm value (Gonzalez-Loureiro & Teixeira, 2011). However, this concept has not been widely applied in Indonesia because many companies tend to run their business conventionally (Sumiati et al, 2022). Property and real estate sector companies in Indonesia are always in contact with technology and knowledge, where investment funds in knowledge infrastructure can improve the quality of human resources.…”

Understanding the Impact of Intellectual Capital on Financial Performance and Its Impact on Firm Value: A Literature Review

“…for structural capital, companies can utilize the structural capital contained in intellectual capital to encourage investment decisions in innovation activities in the environment or within the company. [42]. Based on the results of the aforementioned research, it can be concluded that intellectual capital has a positive impact on financial performance.…”