Applying the VAIC™ model to Australian hotels
Abstract
Purpose
This paper aims to examine the extent to which intellectual capital (IC) adds value to a service provider and presents an approach for interpreting the results.
Design/methodology/approach
The value added intellectual coefficient (VAIC™) model is used to determine the relevant elements of intellectual capital because it employs existing financial data. The number of subjects was restricted to two companies operating in the Australian hotel industry over a four‐year period (2004‐2007).
Findings
The VAIC™ model provides a robust tool for assessing the efficient use of intellectual capital. The model can be used by management to assess their own organisation's performance without having to rely upon industry standards.
Research limitations/implications
The data derived from published financial statements and the limitations associated with accounting standards may be questionable. However, the financial statements were subject to external audit verification. The restricted number of companies is a limitation to generalisability. However, the two companies are the major players in the Australian hotel industry.
Practical implications
The application of the VAIC™ model presented in this paper provides a basis for practical application for management.
Originality/value
The study provides management with a guide to employing the VAIC™ model and, more importantly, a method for interpreting the results.
Keywords
Citation
Laing, G., Dunn, J. and Hughes‐Lucas, S. (2010), "Applying the VAIC™ model to Australian hotels", Journal of Intellectual Capital, Vol. 11 No. 3, pp. 269-283. https://doi.org/10.1108/14691931011064545
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited