Argument Of Tangible And Intangible Resource Commerce Essay

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The economy is developing with many types of business, especially technology with high innovating and fast paced market. The advantage and high demand leads to strong competing among this course of business. In reality, the developments of fast paced technology nowadays are drive by intangible and intangible resource which plays the decision and important role in the sustainability. The relationship and combination of tangible and intangible enhances the competing of business that includes working skill, organization, strategy, business methods, brand, property, asset… It all draws the reality in remaining and developing the resource in order to help organization in technology to improve the quality and make the good competitive advantage for the market. The importance of tangible and intangible assets toward a technology and innovation driven one, especially with intangible asset investment are becoming vital to economic growth and stability. Just as physical assets were used to finance the creation of more physical assets during the industrial age, intangible and tangible asset should be recognized and used to finance the creation and innovation in information age, especially it will make a good foundation for the competition like many companies like Samsung, Apple, Google has done well with the competition. The good recognition and driving in controlling and managing the resource will help management and organization go up with the century of technology , especially to approach better and provide quickly service to the demand of customer.


Argument of Tangible and Intangible resource

In reality, tangible and intangible resources are related to each other and it supports for other. In other word, intangible is more important and requires good tangible to get successful in business, especially in fast paced technology today. Tangible resources are very simple to be defined and realized that includes all hard assets recorded on a company, organization. Those assets are generally segmented base on the expected useful life and that all are component and foundation for the development of company, especially to enhance the quality of intangible resource. Tangible asset includes short term and long-term assets. Short term is those expected to be held for less than one year, include something like cash, securities, inventory… In other hand, long-term asset are anticipated to be held for more than one year and generally include manufacturing plants, real estate, equipment and other long-term asset. It's very meaningful and important in production development, especially for the strategic management in setting plan and remains intangible asset. (Bohn 1994)

The definition in tangible asset can be evaluated and defined easily, opposite with intangible asset is more difficult and requires good ability to control and manage. Intangible asset are something that can't be touched, seen or physical measured. It includes everything that is not physical or investment but its valuable and important for organization. It's a claim to future benefits like customer base, list, strategy , trade secrets, collaboration activities , divided into legal intangible and competitive intangible… In other word, intangible asset is source of value that is generated by innovation, unique type of design, culture , human resource and management practice that plays role for the survive of company . It's often interacting with tangible and financial assets to make corporate value and economic growth in competitive market. (Alavi 2001).

Why Intangible and Tangible resource are important?

The value of those resources are very clear for technology market with many samples from Apply, Samsung, Google … it emphasizes to the ability and value of resource in contributing the advantage for business. The effects of tangible resource are easier and clearer to identify with its role. For those assets are able to be seen or touched, it's the base for company to develop the plan, product and operating business. With all simple things from cash to table, chair, location, it supports for employee and management in being creative with the job and create the stable foundation to expand intangible resource which depends many on tangible. In other word, tangible resource is the basic require for any organization and it's very valuable for any company because it's adjustable and able to change easily more than intangible resource. For the any successful organization, tangible asset is the first thing they need to develop before approach to intangible resource which decides the success or failure for company. Thus, it's very easy to realize that Microsoft, Google, Apply, they all invest very effective to the infrastructure and manufacture asset for any short-term and long-term requirement in order to help employee and management approach to new things to use for business. (Earl 2008).

In contrast, intangible resource is evaluated more complex and careful with its value and role. Before the industrial revolution, the value of intangible did not evaluated correctly and it concentrated only on result and output. However, nowadays, there is no more supremacy of manufacturing economies; everything is fair and competitive in terms of control scare resource, productivity, market domination… The bloom in technology leads to better recognition of intangible resource that contributes very important and appropriate to creativity, technology innovation, service… Intangible asset is invested more with customer service, human capital, and copy rights, legal activities… to protect the business and create the stable position in market, especially in fast paced technology where everything is changing very quickly and easy to be saturated with the requirement. (Teece 2008).

Impact of Intangible and Tangible Resource to Technology Market

The appearance of intangible resource creates flexible operations to spring up and it's where resources are talented labor pools existing or where valuable technological partners reside. Intangible resource forces technology business to grow and end up limiting productive operation, it helps to enhance advantage in technology and even non-technology science can concentrate in coordinated or integrated with flexible enterprises. (Bohn 1994). It's very convenient in the scene that the intangible of know-how or innovation-based relationship drive operational decisions under new tangible resource in the market. In reality, with the development of paced technology today, the phrase like information revolution, knowledge-based economy… are all sprung up to describe the value of technology that gets advantage from intangible resource. The only things are how organization can approach and remain it with highest quality to transform with the economic, market evolution. It's not only for technology market but also for non-technology market where new economy always impact to intangible-focused to harness the advantage of technological productivity , creativity, knowledge-based ( Alavi 2001).It makes the balance for technology market, force organization to make competition that enhances the quality and option of product. Recently, the innovation in financial and information technology has captured intangible resources better. However, evolution of technology capital shows the reality that it supports intangible has been slower. It means that intangible asset has no standard in evaluating their value. For each intangible asset, it seems to be unique and needs better way and differing model to determine its value. Basically, the issue concentrates on the ability to change the position with the impact from market. For tangible resource, it can be adjusted and changed in case of the crisis or problem. (Bohn 1994). However, it's not easy without tangible asset or any trouble relates to it. Tangible resource helps to remain the quality of product and operation; it's where the company can base on the draw the plan. It impacts to the operation in case of having new idea for product or service, tangible asset will decide the quantity and quality of project. In other word, if organization has bad tangible asset in short-term and long-term like Cash, inventory, manufacturing equipment, it will contribute to destroy intangible asset and directly down the financial of company. Even tangible asset seems like easy to manage, but the competitive market nowadays does not give any chance for any company lack of knowledge in this section, especially for Cash which is the foundation for any action.

Do Intangibles and tangible matter to Corporate Strategy?

The impact that tangible and intangible resource brings to business includes both positive and negative. It asks for the action from management in setting suitable corporate strategy. At first, many managements and capital market have failed to solve the real problem of valuation, which reduces the attempts in create the positive for financial leverage of asset. In other word, this valuation deficit must be remedied for businesses and especially in technology market to remain viable and sustainable over the long-term. In reality, the problem for corporate strategy comes from the impact of those resources, especially with intangible asset. By including legal intangible like trade, secret, copy rights… it creates the atmosphere for strategy due to change legal and protection of company.(Grossman 2002). The changing legal environment goes along with the development of technology market for segmentation. It's very easy to reflect negatively to the operation of company and destroy the strategy. New knowledge age makes an immeasurably positive effect on the value of patents, one of the major forms of intangible assets that organization must have good plan with tangible asset in order to make right with intangible asset. The experience will decide the success for organization instead of being failure like Samsung has done so far with copy right from Apple during the time of recognizes, and even encourages, the importance of the monopoly rights of patent holders, has also contributed to the increasing value of intangible issue. The technologies are developing and create much benefit that always includes both of positive and negative point. Beside legal issue to matter with strategy, the rapid rise of Internet has made technology often faces with trouble from its advantage. Information technology has moved the business to other type of economic. Last time, the industrial era, tangible asset were the major source of value, however, the bloom in economic always appear with technology, nowadays, the information era information even has more value than intangible assets.(Earl 2008). Intangible assets like information will different with tangible assets in increasing in value the more people there are who have access to them. It's very important that corporate strategy for any particular company needs to change to fix with the current situation. It requires management to set right plan and issue to go with information or not. Anytime of economic has different way to making strategy. Therefore, the impact are very dynamic and it links together of any purpose for each section.

Most companies are composed of significant amounts of intangible assets in their net worth. But the fact is senior management can realize, recognize and exploit it effectively in right purpose to achieve the good goals for company. Thus, the important factor is how to measure and invest intangible resource correctly by using and innovating the system in evaluating, identifying and recovering all the important consideration for both tangible and intangible. (Grant 2011).

Remain and Renovate Tangible Resource for long-term development

Tangible asset is an advantage for an organization that has strong foundation from their physical asset. In other word, they are those asset that employee can use, touch and see for business purpose. Therefore, it has different role with intangible asset but still very important and play a decided role in technology market. With the importance from the definition and impact, tangible asset must be recognized its role and value to remain stably to control over physical item to provide good support for other operation. Fast paced technology rapidly develops and the advantage in tangible asset will decide the success for business. Tangible business can vary greatly from business to business, and it's divided into two main categories are Fixed and current. It's very important for company to use right resource for economic purpose, for long-term or short-term investment, such as funds in a business bank account.(Grojer 2002). It's effective in case the company can be able to do investment for some new item and new project. Without those such as cash, funds, it will be less advantageous. Examples in this category include the company's buildings, machinery, land and furniture. Thus, the best way for technology and even non-technology business to control and manage is to have good management and accounting in identifying and managing tangible asset. It means that the department in charge should divide tangible assets into different types and purpose for use, from balance sheets or any project, and always has title and control like " plan, property, equipment, machinery…It will be easy for management to know whether tangible asset is current or fixed in order to use it correctly for project. For current assets, they should allocate the expense of asset yearly business purchased. And with fixed assets, for each function that asset is used and contributed for company's objective. It will give the detail for management in suitable investment and remain for right decision and on time project.(Coleman 1998),

Develop Intangible resource for granting competitive advantage

The value and impact of intangible resource to the development of technology and business are very clear. It describes all factors that bring the advantage and positive impact to technology market for any purpose of business. Moreover, intangible are increasingly taking centre stage in organization's business strategies and investor's valuations for granting competitive advantage, in situation of today's ultra-competitive global economy. Physical and financial assets are becoming commodities, yielding at best a competitive return on investment. In their place, intangible assets such as patents, brands, unique business processes, breakthrough scientific discoveries, and strategic alliances are what firms are using to create dominant market positions, control risk, generate abnormal profits, and achieve growth and wealth. The dramatic rise and fall of high-technology company valuations so far has brought the unusual economic characteristics of intangible assets into the public arena. (Grant 2011).The concurrent advantages and vulnerabilities of intangible-intensive companies has highlighted the importance of having an in-depth understanding of the economics of intangibles and developing tools to better manage and evaluate them. It comes with the idea of having good structure to manage intangible to minimize the damage from influence as well increase competitive advantage. In technology age today, many companies have developed with many types of product, service and it can be competitive advantage for all if they can manage legally all the factor and do not influence to each other. It requires the ability of management in emphasizing position, product, brand name, and copy right for what company's going to do and remain with their intangible value. Competitive advantages are considered as the way of combination in business to boost the economy and outcome, brings good service to customer. It helps recovering investment and benefit for organization, thus in technology market, it's very important to worry about.(Carr 2011).

In reality, the most easily identifiable and monetized intangible assets are patents. The patent system, however, appears to be beset by what some consider an ineffectual scheme. It emphasizes to the ability of organization in making competition by launching new product line with special option and diversified program. It's best way to remain and develop intangible asset stability because it helps to reduce the cost legal battle among technology market about the product. Moreover, in trade secret, knowledge is a non-rival good, meaning that it can be possessed by more than one individual/organization at a time. Exclusivity must be enforced through legal means, often through a breach-of-contract suit. For example Samsung and Apple, two successful technology competitors, Samsung had just wrong with patents that were belonged to Apple for some program. In reality, Samsung is very successful technology company by having very strong tangible asset with cash, investment; retail…(Teece 2008) they expand market into international with strong legal intangible asset and competitive intangible. In other word, the wrong step in fast paced market will lead to failure for product line and productivity. Apply develops because they establish their operation very innovative and creative by distributing tangible resource international to support for new idea, plan by having good and enough inventory , manufacturing equipment and especially cash, funds for new product lines. Moreover, legal intangible resource always must put at first by emphasizing and correcting the patents for anything news in order to remain the competitive advantage and reduce the competition in costing battle with other company. Thus, when the company release new product, it will be less risk from customer and legal requirement. Microsoft also is a good sample for any new and existing technology company to compare with in developing tangible asset. Microsoft develops strongly by increasing and providing real product that support and necessary in real life like computer program, windows…it means that the company concentrates on human capital in order to have enough resource to develop knowledge base, information revolution, creativity…It's the best way to expand the image and brand, create strong foundation for long-term development.(Carr 2011)

The competition in pace technology market is good for business in some case because it will enhance more information revolution, creativity in product lines… Moreover, it asks for more abilities from management in developing and increasing tangible and intangible assets to satisfy the basic requirement for any project with good support. The experience in some non-technology also can be considered as a good way of remaining tangible asset like real estate, patents…For example McDonald, KFC…those companies concentrates on remain good real estate through the role of the intellectual property system. It helps companies expand the brand, location into international, moreover, the patent, collaboration activities will be stable without being impacted from other competition. It creates long-term sustainability and moreover, it indirectly brings advantage to customer in service and quality due to competitive advantage. (Grant 2011).


The increase in value and important or intangible and tangible resource is due to the changing of market, demand, legal environment and especially the internet and information technology. The real and potential value of intangible and tangible companies has proven more clearly to assess, largely because it's more popular to control and manage by different way base on the ability of management, the changing of saturated market. The impact of tangible and intangible resource can be recognized and managed effectively to remain competitive advantage. The increase in number of Technology Company with intangible resource has led to the need to explore new and diversified different valuation approaches. This paper has emphasized on different way of evaluating the valuation from new perspective, base on the ability, potential and influence of tangible and intangible resource to economic for better competitive advantage. It helps organization, especially fast paced technology to realize the risk and danger from being influenced of market and especially from legal intangible like patent. Calculating the value of intangibles companies based on their ability to develop and maintain cash flows by converting their ideas and innovations into revenue streams is fundamental to adequately assessing and quantifying the value of these firms. It's not only for technology market but also for non-technology market where new economy always impact to intangible-focused to harness the advantage of technological productivity , creativity, knowledge-based. It makes the balance for technology market, force organization to make competition that enhances the quality and option of product.