Human Capital Intangibles in Family Firms: Identification and Measurement.

Intangible assets are considered to have a high strategic value and have become very relevant factors in the creation of value for a firm. Together with intangibles, family firms are the most important wealth-creation agents. Their resources and capabilities can make a considerable difference between family and non-family organisations. These firms possess idiosyncratic resources of an intangible and tacit nature that are inherent to them because they have been generated throughout the firms' history. Precisely for their condition as 'family' firms, these firms are a source of intangible assets which can provide the basis for their later achievement of competitive advantages. Based on the literature devoted to family firms, the human capital theory and the intellectual capital-based view of the firm, the present paper has as its aim not only to identify the most important human capital intangibles owned by family firms but also to show a series of indicators that can help measure them. For this purpose, the paper firstly refers to the most important human resources practices that permit the maximum capitalisation of human resources available to the firm; it secondly identifies 12 intangibles which characterise the human capital of family firms; and finally, 32 indicators have been created to measure all human capital intangibles identified in family firms. Our main motivation stems from the fact that individuals represent the most important input for knowledge work, which is structured around people's skills and competences rather than around the execution of programmed tasks and work routines. The human capital theory states that individuals own skills, experience and knowledge which provide economic value to firms. Therefore, knowing the human capital intangibles of family firms -as well as the indicators which can be used to measure them- will surely help improve the management of those intangibles, thus making the most of intellectual capital. [ABSTRACT FROM AUTHOR]