Structural capital management creates sustainable competitiveness and prolonged first-mover advantage

Abstract

Structural (SC) capital is part of the intellectual capital that is owned by an organisation and its efficient and dedicated management is essential for the creation of shareholder value, sustainable competitive advantage, and prolonged first-mover advantage. SC consists of three types of capital, namely: innovation, organisational and process capital. Organisational capital consists of organisational culture, management philosophies etc. and has received a large amount of management attention. However, organisational capital is not as valuable towards the creation of sustainable competitiveness and first-mover advantage as innovation and process capital are. It is the purpose of this article to demonstrate how a thorough understanding and the efficient management of innovation and process capital enables organisations to achieve the afore-mentioned benefits. Innovation capital management consists primarily of patent and brand management, which are particularly important as patent management forms a high-margin justification for the implementation of organisation-wide intellectual property management, and the management of high-equity brands secures a loyal customer base and associative sustainable competitiveness and first-mover advantage benefits. Although not as obviously valuable as innovation capital, the article also explores the value that the efficient management of unique organisational processes and methodologies contribute towards the achievement of prolonged first-mover advantage and the provision of protection against competitor actions. This exploration involved an examination of contemporary literature, theories and business cases and subsequently revealed that SCM is a vital discipline/philosophy that must be implemented by any organisation wishing to achieve greater sustainable competitiveness. Innovation and process capital are of particular importance as these assets can be made tangible, leveraged and integrated into existing business operations to create unique, inimitable and sustainable competitive advantage.