Intangible Assets: You Can't Touch Them, but They Make the Difference

It is undeniable that in current competitive markets, value creation is the result of the strategic management of intangible skills and assets. The basic assumption on the superiority of intangible capital in ensuring lasting and sustainable competitive advantage is intuitive. Physical and financial tangible assets are only able to generate a modest return on investment, because they represent forms of capital that are common and easily reproducible. Only rare, valuable, hard-to-imitate resources, configured so that they can be effectively used within a specific business organization give rise to a positive return differential. And it's precisely intangible assets that possess such characteristics. They thus are at the basis of value generation in modern economies. It is in the progressive strategic and organizational integration of CSR practices can make the difference. Adopting social and environmental standards that are higher than the legal norm must be motivated not so much by improving the bottom line, but rather as inevitable consequence of complex, dynamic system of relations that links the firm to its social environment. The step between socially responsible behaviors and strategies and the accumulation of intangible capital is not hard to make. The more the economic, social and environmental dimensions are integrated in long-term business processes, the more it will gain legitimacy with and approval by various categories of stakeholders, thus augmenting its stock of immaterial resources based on trust and good relations. Recent studies have shown that the accumulation of immaterial assets is the key to adopting CSR strategies that benefit the firm. According to this approach, relational assets (customer relations, labor relations and relations with other types of stakeholders), structural assets (the capacity to innovate through the development of technical abilities that are coherent with the corporate mission and culture) and intellectual assets (the set of behavioral, professional, cultural skills of employees) are the missing links between socio-environmental and economic-financial performance. One can think of how the implementation of programs and strategies geared toward the reduction of environmental impact requires the development of new corporate skills, which, by increasing the stock of intellectual and structural capital, in turn yield positive results in terms of operational efficiency and company results. Also, by improving stakeholder relations, firms are often able to venture into new markets and have access to new business opportunities. The necessary condition for this to happen remains the conviction that social responsibility be understood as integral part of corporate strategies and policies, by interacting with the management of all the other functional areas: production, marketing, human resources, corporate governance. Thus the point for companies is not so much to move generically toward CSR, but to understand the meaning and value of CSR of a specific firm and translate it into objectives that can be monitored, thus leading to concrete activities and measurable results.