5      ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No.  1  |  2018  |  5-50
DO BETTER PERFORMING COMPANIES 
POSSESS MORE INTANGIBLE ASSETS:  
CASE OF SLOVENIA*
GORDANA LALOVIĆ
1
MATJAŽ KOMAN
2
ABSTRACT: Drawing on the intangible resource-based view of the firm, we investigate the 
difference between high and low performing companies regarding their profile of core intangible 
resources. The results obtained indicate that on average better performing companies hold 
higher share of intangible capital on majority of analysed intangible resources and thus may 
have developed more core competences and capabilities needed for superior performance. The 
paper contributes to the previous literature as it highlights the existence of intangible resources 
within the population of firms with common characteristics, which favourably distinguish 
superior firms from less successful one. For the managers and policy makers gaining a clear 
understanding of core intangible resources with potential of sustainable competitive adventage 
that determine high performing firms and their tendency to invest in intangible assets can be 
of crucial importance as it offers some insights for policy design.
Keywords: intangibles, firm performance
JEL Classification: D22, L25, 030, E22
DOI: 10.15458/85451.59
INTRODUCTION
Historical roots of research on intellectual capital (IC) starts in 1990s. Initial work 
mainly focused on raising awareness about the existence of intangible assets and their 
value within the organizations (Itami, 1991; Brooking, 1996; Roos, Roos, Dragonetti 
and Edvinsson, 1997; Stewart, 1997) followed by the first classification models (Marr, 
Gray and Neely, 2003). A change in investment structure with the increased investment 
in intangible capital indicated a transition of industrial economy towards knowledge-
based economy. Further research, thus, formulated the concept of knowledge-based 
organization (Nonaka, 1991; Spender and Grant, 1996; Teece, 1998; Teece, 2000) and 
focused on the management of knowledge assets, which are often referred to as IC or 
1 University of Ljubljana, Faculty of Economics, PhD Candidate, Ljubljana, Slovenia, e-mail: gordanalalovic@
gmail.com
2 Corresponding author, University of Ljubljana, Faculty of Economics, Ljubljana, Slovenia, e-mail: matjaz.
koman@ef.uni-lj.si
* Acknowledgements: Lalović’s research in this paper was in part supported by the Slovenian Research 
Agency’s grant no. J5-4169. Koman benefited from grants from the Slovenian Research Agency (grants no. 
J5-4169, J5-8231 and P5-0128.

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 6
intangible/invisible assets (Alcaniz, Gomez-Bezares and Roslender, 2011). They are 
considered a key driver of business’ growth, profitability and competitiveness (Bose and 
Oh, 2003; Kaufmann and Schneider, 2004; Cohen and Kaimenakis, 2007; Zeghal and 
Maaloul, 2011; Sydler, Haefliger, and Pruksa, 2014). Canals (2001) emphasized that with 
the development of knowledge-based society intangible resources increasingly came in 
the forefront exceeding the contribution of tangible assets in the process of value creation 
(Guthrie, 2001)
3
.  
The notion of IC is linked to the firms’ ability to generate and apply potential of the knowledge 
embedded in many of IC definitions (Kaufmann and Schneider, 2004). Galbraith (1969), 
who first used the term, described IC as “a bundle of assets in a process of value creation” . 
In order to better understand how IC contributes to the value creation many scholars tried 
to give the definition of IC and shed light on its measurement and management process 
(Boj et al., 2014). Even though many authors tried to define the term in accurate manner 
the literature review revealed that there is no broadly accepted definition. According to 
Brooking (1997) IC refers to intangible assets that can potentially enhance corporate 
performance in case that appropriate combination of intangible assets, financial resources, 
and good relationship with stakeholders exists (Abdullah and Sofian, 2012). 
The notion that IC has the impact on business performance is consistent with the resource-
based view (RBV) theory, which advocates that a company should identify and manage 
its intangible resources effectively in order to achieve the above average performance 
(Penrose, 1959, 1980; Kristandl and Bontis, 2007; Raja Adzrin, Abu Thahir, and Maisarah, 
2009; Lewicka, 2011)
4
. In order to maintain above average profitability, firm needs 
to build sustainable competitive advantages (SCA) by creation of intangible strategic 
resources (Ahmad and Mushraf, 2011; Sydler et al., 2014). Therefore, firms should analyse 
the resources and competences they possess in order to discover which of them can be 
considered superior and distinctive (Camelo-Ordaz et al., 2003). In identification of their 
core intangible resources and consequently in conceptualization of strategically significant 
competences and capabilities of the firm, IC components can be helpful. 
In this paper we analyse the correlation between the size and different sources of 
intangible capital and performance of Slovenian manufacturing companies using the 
cluster analysis. Obtained results show than on average better performing companies hold 
3 Corrado, Charles, Hulten, and Sichel (2005) estimated that investment in intangibles averaged US$1.1 
trillion between 1998 and 2000 (1.2 times tangible capital investment) or 12% of GDP, and showed that 
an important part of the US productivity acceleration since the mid-1990s can be attributed to growth in 
intangible assets. Other country studies estimated the contribution of previously unmeasured intangible 
capital to multifactor productivity (MFP) growth of 14% in UK (Marrano, Haskel and Wallis, 2009) and 3% 
in Finland (Jalava et al., 2007) over a period between the mid-1990s and early 2000s. Estimated contribution 
of all intangibles to MFP growth in Japan and in France is 19% (Fukao et al., 2008), 18% in Germany, and 9% 
in Spain (Hao et al., 2008).
4 Nevertheless many companies are still facing a lot of difficulties with the IC management (Dzinkowski, 
2000) due to intangible nature of IC. Therefore its identification and measurement becomes difficult as it is 
hard to measure IC by financial figures. As a result, only 20% of firm’s knowledge is actually used because 
firms lack appropriate IC measurement system (Chen, Zhu and Xie, 2004). 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 7
higher share of intangible capital on almost all analysed intangible resources and thus may 
have developed more competences and capabilities needed for superior performance. By 
comparing the resource profile of superior firm performers we highlight their tendency to 
invest in intangible assets of the firm and the existence of those intangible resources that 
favourably distinguish them from less successful firms. 
For the managers and policy makers gaining a clear understanding of core intangible 
resources that determine superior firm performers and their tendency to invest in 
intangible assets can be of crucial importance as it offers some insights for policy design. 
Understanding companies’ core intangible resources with SCA potential allows firms to 
define appropriate corporate strategies that offer them the best economic returns. The 
paper contributes to the previous literature as it highlights the existence of intangible 
resources within the population of firms with common characteristics, which favourably 
distinguish superior firms from less successful one. In general, the findings of the study 
evinced different profiles in the core intangible resources of high- and low-performance 
firms contributing to the theoretical insights of the resource-based view of the firm. A 
comparative analysis, which shows the resource differential between the studied firms, is 
one of the learning experiences in organization science and strategic management. 
The structure of the paper is as follows. The study begins with brief presentation of IC 
definitions and its classifications. The next section introduces RBV of the firm as the basis 
for hypothesis development. Given the high importance of core intangible resources in 
their contribution to superior performance by development of strategic capabilities and 
creation of sustainable competitive advantages, the resource profile of Slovenian superior 
companies is examined and compared to less successful firms. Discussion and conclusion 
are presented in final section.  
1. INTANGIBLE RESOURCES AND THEIR ROLE IN IMPROVING BUSINESS 
PERFORMANCE
1.1. What is intangible resource and where it comes from - definition and the 
origins of IC 
The Kaufmann and Schneider (2004) and Choong (2008) reviewed main definitions of IC 
and intangibles in general, and pointed to the use of different terms by different scholars 
from different economic fields, which refer to the same subject. Invisible assets (Itami, 
1991), intellectual capital (Brooking, 1997; Stewart, 1997), immaterial capital (Sveiby, 
1997), intangibles (Lev, 2001) are the most recurrent terms, with intangible assets being 
the most often used term by accountants and accounting standards. Today the term 
IC is usually used in management and legal literature, intangible asset in accounting 
literature field, while the term knowledge asset by economists. The difference exists 
mainly in different perspective adopted reffering to the immateriality of IC elements, their 
“invisibility” , their relation to knowledge and/or information, and to the role of intangibles 
as generative resources (Moldaschl and Fischer, 2004). 

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 8
Finally, due to different viewpoints of various interest groups different approaches on IC 
classification exist and consequently different ways of categorisation and different lists of 
intangibles are offered. A three-categorization model of Edvinsson and Malone (1997) is 
often presented where IC is identified at the level of individuals, the organizational level 
and the level of relationship that the firm has with its suppliers, customers and other 
stakeholders in general (Marzo, 2013)
5
. Beside Edvinsson and Malone’s  classification 
commonly known as pioneering one is also classification of Sveiby (1997), who divided IC 
competences into internal capital (patents, concepts, computer and administrative systems) 
and external capital (customer segmentation, market growth, efficiency and stability). 
What seems to be shared by all authors is that IC is non-tangible (and non-financial) 
asset based on the knowledge, which span human, intra-organizational and inter-
organizational level of the firm. In our study we will refer to the definition of Turk (2000) 
who defines IC as firms’ knowledge included in its operations; it could be capitalized 
or not (like intellectual property); it impacts firms’ operating profit and its value; and 
it exists as human, relational and organizational capital. In his definition Turk also 
follows the Edvinsson and Malone’s IC classification where human capital is defined as 
combined knowledge, skill, innovativeness and ability of employees to meet the task at 
hand; organizational (structural) capital refers to organizational capability that supports 
employee’s productivity like hardware, software, databases, organizational structure, 
patents, trademarks; and relational (customer) capital consists of relationships developed 
with the key customers (Bronzetti, Mazzotta, Puntillo, Silvestri and Veltri, 2011). In the 
study we will use IC term interchangeably with the term intangible assets or intangible 
capital. 
1.2. IC elements and their contribution to organizational efficiency
Due to the IC role in reduction of companies operating costs we provide description of 
individual IC elements and their contribution to organizational efficiency.
Human capital is considered the most important resource of the company especially in 
relation to firm’s future value creation (Gadau, 2012). It is also a foundation of IC and the 
basic element in performing other functions of IC (Chen, Zhu and Xie, 2004). Several 
authors suggested that in order to effectively generate and derive benefits from intangible 
capital a firm has to possess high quality human resources (Galor and Moav, 2004), which 
represent the collection of employees’ skills and abilities (Bontis and Fitz-enz, 2002) that 
can be leveraged to further extend intangible asset base of the firm (Arrighetti, Landini 
and Lasagni, 2014). 
5 Due to different approaches in IC measurement accountant tried to establish accounting standards to provide 
stakeholders with a more comprehensive picture of firms’ IC expressed in terms of traditional monetary data 
(Petty and Guthrie, 2000). Therefore, accounting literature uses classification of intellectual capital into four 
categories of assets (Gadau, 2012): market assets, substructure assets, assets as intellectual property, human 
values. Intangibles can be also classified according to the degree of how difficult is to establish ownership or 
control rights over intangible assets (Blair and Wallman, 2000).

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 9
Basically human capital refers to individual abilities, know-how, skills, expertise, 
experience, and leadership abilities of employees and managers which increase their 
professional qualification and contribution to the firm (Edvinsson and Malone, 1997; 
Fernandez, Montes and Vazquez, 2000). Together with teamwork and learning capacity, 
loyalty, training and education, these attributes comprise employees’ competences (Chen 
et al., 2004); whereas employees’ attitude includes the motivation of the employees for 
the work and satisfaction from work (Sydler et al., 2014; Inkinen, 2015). Creativity of 
employees enables them to be innovative and is one of the most important factors in 
developing IC of the firm (Chen et al., 2004). The competences, attitude and creativity 
of employees can result in outstanding products and in improvement of production 
efficiency. Employees’ competences are transformed into capital through HRM practices 
like annual performance appraisals, work-life balance programs or health improvement 
programs, which can effect and enhance not only organizational performance (e.g. 
productivity, quality and innovation) of the firm but also social performance in terms of 
lower employee turnover and absenteeism or an increase of job satisfaction (Abhayawansa 
and Abeysekera, 2008). 
Human capital is people dependent knowledge which is not a property of the firm. Thus 
it is very important for the company to establish and to enforce the relationship with its 
workers in order to keep this value within the company (Bronzetti et al., 2011). In this 
respect knowledge transfer among employees is important factor of knowledge keeping 
within the firm
6
. 
Organizational (structural) capital, also called internal capital, refers mainly to the 
internal organization that supports human capital to perform and create value or 
wealth for the firm (Edvinsson and Malone, 1997; Sveiby, 1997; Bollen, Vergauwen and 
Schnieders, 2005). It represents the human capital substructure (Gadau, 2012) and could 
also be defined as human resource supportive infrastructure (Benevene and Cortini, 
2010) as it allows efficient operation of a firm, which helps adaptation to novel situations 
(Y oundt and Snell, 2004). 
It is people independent intangible resource that remains when employees leave the 
company. Thus, one of its functions is to reduce firm’s dependence on a particular 
individual or group of individuals, and easing incorporation and coordination of new 
employees (Fernandez et al., 2000). It includes corporate culture, policies, distribution 
networks, and other “organisational capabilities” developed to meet requirements 
of the market, such as patents, trademarks, licences, quality and improvement 
processes, organizational processes, IT systems, or R&D activities that have been or 
will be implemented in order to improve the effectiveness and profitability of the firm 
(Dzinkowski, 2000; Moon and Kym, 2006; St-Pierre and Audet, 2011; Sydler et al., 2014). 
6 Fernandez, Montes and Vazquez, (2000) offer some of posible solutions how to keep knowledge of individual 
employees within the firm by limiting the freedom of personel movement for a certain period of time in case 
that worker received a specialized training needed for specific job performance or rewarding the employees 
for the remaining in the firm in the form of compensations for long service to the firm or high pensions which 
the employees lose in case that they leave the firm.

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 10
Among others, database of clients, suppliers and competitors also provides competitive 
advantage as it is important information source which reflects firms’ internal structure 
of relations. 
Most of organizational knowledge is not formally written in any of companies’ documents 
but resides in organizational routines, principles and values that make up firm’s corporate 
culture, which is a product of employees’ interaction and collective learning - assets that 
enable productivity and enhance human capital (Fernandez et al., 2000). Organizational 
capital is supporting infrastructure of human and relational capital in their contribution 
to firm performance since it enables creative and innovative activities within the firm 
(Bozbura, 2004). Together with human capital organizational capital enables companies 
to generate and utilize relational capital in a coordinated way (Chen et al., 2004). 
Relational (customer) capital, also called external capital, represents ability of the firm to 
relate with various stakeholders, such as customers, suppliers, investors, members of the 
community, society, and the knowledge embedded in and derived from these relationships 
(Canibano, Garcia-Ayuso, and Sanchez, 2000; Grasenick and Low, 2004; Green and Ryan, 
2005; Abdullah and Sofian, 2012). It includes the perceptions of external stakeholders of 
the firm itself, such as corporate image, brand recognition, and similar (Przysuski, Lalapet 
and Swaneveld, 2004). 
Relational capital not only that incorporates the network of relations with its stakeholders 
but it also integrates potential assets obtained through these networks (Burt, 1992; Wang, 
Yen and Liu, 2014) such as: customer and brand loyalties (Park and Luo, 2001), access to 
quality raw materials, better service, faster and more reliable suppliers’ delivery (Peng and 
Luo, 2000), reduced possibility of opportunistic behaviour of business partners (Pisano, 
1989), and development of new knowledge and competences with greater exchange 
of information, skills and know-how (Walker, Kogut and Shan, 1997; Kale, Singh and 
Perlmutter, 2000) due to enhanced evolution of partner’s relationships (Gulati, 1995). 
Cooperation with customers, suppliers and competitors not only provide the access to 
their knowledge and resources but also enables the sharing of risks and provides necessary 
flexibility needed in changing environment (Fernandez et al., 2000). A good relationship 
with company’s stakeholders implies improvement in firm’s trust and reputation and 
consequently an increase of relational capital (Bronzetti et al., 2011). 
Relational capital facilitates cooperation among team members and shapes collective 
actions (Chua, Lim, Soh, and Sia, 2012). Therefore, it can help employees to collaborate 
with others, leading to better individual performance. The higher level of relational capital 
induces better planning and problem solving, enhances customer benefits by better 
identification and satisfaction of their needs, which in turn increases production and 
efficiency of service delivery and thus reduces organizational costs (Youndt and Snell, 
2004; Kijek and Kijek, 2008). Relational capital is among all components of IC the most 
directly related to firm’s performance but cannot be developed without the support of 
human and structural capital (Chen et al., 2004). 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 11
Therefore, intangible capital is the knowledge of the firm embedded in the skills and 
experience of its employees, its policies, procedures and routines, and its relationships with 
its customers, suppliers, and other stakeholders of the firm (Bharadwaj, 2000; Grant, 1996).
2. RESEARCH ANALYSIS
2.1. Literature review and hypothesis development
Resource based theory (Barney , 1991) and competence-based theory (Hamel and Prahalad, 
1990) recognize the resources and competences as a source of competitive advantage of 
the firm (Bowman and Toms, 2010; Bronzzeti et al., 2011). In order to be the source of 
sustainable competitive advantage resources must be rare, unique, inimitable, durable, 
idiosyncratic, and non-substitutable, i.e. not easily replaceable by another resource (Peng, 
2001; Fahy, 2002). Such resources are considered to be core or strategic as they distinguish 
a firm from a strategic point of view (Leonard-Barton, 1992). Since intangible capital is 
the only source that fulfil all conditions required to be considered the source of firms’ 
sustainable competitive advantage (Sanchez, Chaminade and Olea, 2000), many authors 
used RBV in analysing firms’ intangible capital (e.g. Fernandez et al., 2000; Sveiby, 2001; 
Riahi-Belkaoui, 2003; Herremans and Isaac, 2004; Marr, Schiuma and Neely, 2004; Reed, 
Lubatkin and Srinivasan, 2006). 
In general, development of firms’ intangible capital is closely linked to the firm’s history 
(path-dependency) and causal ambiguity (making it hard for other firms to imitate or to 
recreate due to unique historical evolution of each company). Many of firms’ intangible 
resources are externalities derived from their activities (Arrow, 1974). Due to their complex 
relations of complementarity and causal connections among intangibles themselves 
and among intangibles and other resources of the firm, intangible resources are hard to 
understand and replicate. Thus availability of intangible resources in organized market is 
lowered precisely because of their co-specialization with other resources of the firm, which 
reduces their value outside the firm and impedes the knowledge of its individual creation 
(Grant, 1991). The more numerous and more complex these connections are, harder it 
is to understand and imitate intangible resources of the firm (Reed and DeFillippi, 1990; 
Fernandez et al., 2000)
7
. This idiosyncratic character of intangible resources makes them 
an important factor of firms’ differentiation. 
Compared to tangible assets intangibles contribute significantly more to firm’s success 
(Galbreath, 2005) as they have more potential for creation of firm’ s sustainable competitive 
advantage and to enable the firm to sustain higher levels of profit (Bowmana and Toms, 
7 Among the reasons why resorces and competences might be difficult to imitate we can find: complexity of 
core competences because of the ability of company to internaly and externaly link activities and processes 
in such a way that they deliver value to the customer; path dependency of competence development, which 
are culturally embedded; causal ambiguity where competitors cannot comprehend the significance of firm's 
characteristics that may be based on tacit knowledge or the linkage of processes and activities that create core 
competences (Foundations of strategic capability, 2015).

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 12
2010). From the perspective of RBV, sustainable competitive advantage of the firm 
depends on the exploitation of relationships between different complementary intangible 
resources that generate value synergies (Powell and Dent-Micallef, 1997). The synergy 
effect is obtained with the use of intangible resources that are accumulated in one part of 
the firm and are simultaneously used in other parts without additional expense or at low 
cost. This simultaneous use of intangibles is possible due to their knowledge nature, which 
enables synergies: it can be used at the same time in different forms, it doesn’t deteriorate 
with the use but its value increases with the use as opposed to tangible material resources 
which depreciate with the use, and it is possible to obtain even more knowledge with the 
combination of its parts. Because of their capability to generate synergies, the possession 
of intangible resources is of great importance for firms’ growth (Fernandez et al., 2000). 
Companies that are able to generate superior core resources may be capable to use them 
in order to develop sustainable competitive advantages of the firm (Srivastava et al., 1998; 
Lippman and Rumelt, 2003). 
Hamel and Prahalad (1990) argue that superiority of better performing companies over 
their competitors stems from their core competences and the way they are deployed, 
which implies that firms possess different profiles of resources (Carmeli, 2001). Intangible 
resources decisively contribute to the heterogeneity of resources with their unique 
characteristics (lasting, specialised and non-marketable) and superiority (scarce and 
difficult to imitate). They may exist at different levels within the firm: employees, teams, 
functions, processes, or the organization as a whole (Villalonga, 2004). Type, nature and 
magnitude of these resources determine a company’s profitability (Amit and Schoemaker, 
1993). Thus, in explaining why some firms are more competitive and perform better than 
others resource based theorists (Wernerfelt, 1984; Barney, 1991; Grant, 1991; Peteraf, 
1993; Amit and Schoemaker, 1993; Collis, 1994) emphasize the role of internal, firm-
specific factors and their effect on performance. 
Many authors investigated link between different measures of performance and intangible 
capital like: sales (Lev, Radhakrishnan and Zhang, 2009), return on equity (Appuhami, 
2007), sales variation, productivity and return on assets (St-Pierre and Audet, 2011), 
cash flows (Herremans, Isaac and Bays, 2008), business profitability and productivity 
(Kamath, 2008), efficiency and the net value added over total asset (Riahi-Belkaoui, 
2003). Authors often show significant contribution of intangible capital to firms’ market 
value (Sougiannis, 1994; Lev and Sougiannis, 1996; Al-Horani, Pope and Stark, 2003; 
Eberhart, Maxwell and Siddique, 2004; Hall, Jaffe and Trajtenberg, 2005; Greenhalgh and 
Rogers, 2006; Anagnostopoulou and Levis, 2008; Sandner and Block, 2011). Some authors 
also found a positive contribution of intangible capital to both firm- and industry-level 
productivity (Oliner, Sichel and Stiroh, 2007; and O’Mahony and Vecchi, 2009; Marrocu, 
Paci and Pontis, 2012). Carmeli and Tishler (2004) and Riahi-Belkaoui (2003) showed the 
positive relationship between intangible capital and firm’s future performance. St-Pierre 
and Audet (2011) listed some of the studies where we can find a positive relationship 
between intangible capital and firm performance as well as between the growth rate of 
intangible capital and firm performance (Cohen and Kaimenakis, 2007; Tan, Plowman 
and Hancock, 2007; and Tovstiga and Tulugurova, 2009). 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 13
Some authors investigated relationship between firm’s performance and certain type of 
intangible capital finding significant positive correlation between: human capital and 
profitability and productivity of firms (Kamath, 2008), human and organizational capital 
and investors’ capital gains on shares (Appuhami, 2007), organizational and relational 
capital and firm performance, reflected through reduction of operational costs and 
new product development (Bontis, 1998; Bontis, Keow and Richardson, 2000). Others 
showed significant positive correlation between firm performance and certain elelements 
of organizational and relational capital like: R&D and innovation (Capon, Farley and 
Hoenig, 1990; Lev and Sougiannis, 1996; Deng, Lev and Narin, 1999), advertising (Chan, 
Lakonishok and Sougiannis, 2001), customer satisfaction (Luo, 2007; Aksoy, Cooil, 
Groening, Keiningham and Yalcin, 2008) and companies’ image (Deephouse, 2000; 
Roberts and Dowling, 2002).
But authors also showed that no single intangible capital can create value on its own (Gupta 
and Roos, 2001) but the combination and interaction between different types of intangible 
capital is the one that yields a sustainable competitive advantage and enhance firm 
performance (Chen, Cheng and Hwang, 2005; Fernstrom, 2005; Cohen and Kaimenakis, 
2007; Inkinen, 2015). Hence, Nazari (2010) revealed that human capital is significantly 
associated with organizational capital and positively influences firm’s performance. 
Other authors showed that human capital has positive influence on relational capital, 
whereas both components in turn influence organizational capital (Bontis et al., 2000; 
Chen et al., 2004). Another study by Hsu and Fang (2009) provided evidence that 
combined effect of human and relational capital improves organizational learning and 
new product development performance. Huang and Hsueh (2007) found that interaction 
of human and relational capital, especially employees’ training, has a strong impact on 
firm performance. Later on Inkinen (2015) confirmed that employees, the organisational 
supporting structures or the established relations that the firms possess has only little 
value separately but combined they represent a strong performance driver. Other studies 
also documented the support of human capital to other dimensions of intangible capital 
which in turn directly influence firm performance (Cabrita and Bontis, 2008; Kim, Kim, 
Park, Lee and Jee, 2012). Wang and Chang (2005) observed that the influence of human 
capital on performance is indirect as it influences innovation capital, process capital and 
customer capital, which in turn are the main determinants of firm performance.  
In accordance with the resource based view of the firm and above stated empirical 
arguments concerning the relationship between different dimensions of intangible 
capital and firm performance we believe that better performing companies possess more 
beneficial intangible resources that help them to be more competitive and to perform 
better than others. Thus, we hypothesize that better performing companies possess higher 
share of human, relational and organizational capital.
H1: Better performing companies possess higher share of human capital.
H2: Better performing companies possess higher share of relational capital.
H2: Better performing companies possess higher share of organizational capital.

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 14
2.2. Methodology and data 
In our research we have focused on larger Slovenian manufacturing firms with more 
than 100 employees due to the lack of record keeping regarding some of intangible assets 
in smaller Slovenian firms since they do not have established organizational structure 
to collect these data. Therefore, in many cases smaller companies could not provide 
requested data. In contrast to smaller companies, large firms are more capable to exploit 
economies of scale in intangible asset accumulation, can be more effective in protection 
of their intangible assets and thus have a greater incentive to invest. They are also more 
capable to support the uncertainty related with investment in intangible asset compared 
to small firms (Arrighetti et al., 2014). In addition, large firms are also more inclined to 
a more thorough disclosure of information on intangible assets (Bozzolan, Favotto, and 
Ricceri, 2003). 
The surveyed companies run businesses in different industries. As the resource-based 
theory is concerned with resource-based advantages rather than monopoly-based the use 
of a sample with a variety of industries is appropriate (Fahy, 2002).
Primary data were collected within the basic research project »Analysis of firm-level 
investment in tangible and intangible capital from the perspective of future competitive 
advantages of Slovene firms, code J5-4169«. To collect data on various resource constructs 
we used questionnaires, which focus on broader classification of intangibles and address 
different aspects of intangibles (HRM, interest groups in the company, information 
technology, innovation, relational capital, branding and brand capital)
8
. Instead of 
investigating single aspects, we used a comprehensive framework covering different 
aspects of intangible capital in order to capture the entire intangible capital structure of 
the firm and to provide better understanding of its “immaterial” parts by investigating 
their relative importance. The respondents were asked to evaluate different intangible 
resources by answering the set of “yes/no” questions, where each set covers one field of 
study. Affirmative answers to the questions reflect increased complexity of specific category 
and the tendency of a firm to achieve higher level of productivity. In the questionnaires 
we used cascade type of questions based on the work of Miyagawa et al. (2010). The use 
of cascade technique ensured data quality and reliability. Questionnaires comprised also 
some Likert scale questions using a 1 to 4 scale. In the questionnaires we also included 
some standard questions asking for specific piece of information like market share, number 
of competitors, patents, sales, expenditure for employees’ training, IT, R&D activities, and 
marketing activities. With the following questionnaires we identified the type of intangible 
resources that companies possess as well as the processes run in the companies:
8 Project was performed at the Faculty of Economics University of Ljubljana in the period from 2011 to 2014, 
by the research group led by prof. dr. Janez Prašnikar and financed by the Slovenian Research Agency. Authors 
of individual questionaires are: associate professor dr. Tjaša Redek for R&D capital, assistent professor dr. 
Matjaž Koman and mag. Gordana Lalović for the field of relational and IT capital, associate professor dr. 
Nada Zupan and teaching assistant dr. Daša Farčnik for HRM capital, full professors dr. Janez Prašnikar and 
dr. Damjan Voje for social capital, full professor dr. Vesna Žabkar for the field of marketing. Results of the 
study are published in the book edited by prof. dr Janez Prašnikar with the title The role of intangible assets 
in exiting the crisis (2010). 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 15
•	HRM questionnaire focused on different aspects of human capital, like: training 
and transfer of knowledge within an organization; HRM practices like performance 
feedback, programs for work-life balance, employee health improvement programs, 
employee motivation and satisfaction; and organizational flexibility in respect to 
teamwork, process of continuous improvements, internal communication of employees 
and implementation of new business practices and methods. 
•	With the social capital questionnaire we investigated ownership structure of the firms 
as well as the process of negotiations between managers and employees in terms of 
their bargaining power, the role of unions within the process along with the employees’ 
participation in decision making, risk and profit sharing.
•	With IT questionnaire we measured different IT dimensions, from investment in and   
development of IT system, its use for customers’ central database, sales analysis, or sales 
projections, and the role of informatics in current activities, business reorganization, or 
for achieving competitive advantage.
•	With R&D questionnaire we focused primarily on: R&D activity in companies, 
characteristics of product and process innovation, and company competences and 
capabilities relative to competition. 
•	Marketing questionnaire investigated the level of development of brand management 
based on the existence of three aspects: brand development, brand measurement, and 
brand investments. 
•	We measured relational capital using a questionnaire that focus on firm’s customers, 
competitors and suppliers, analysing different dimensions of relational capital like: 
relationship with customers and suppliers, their impact on business decisions and 
product development, monitoring of customers and acquiring new one as well as 
acquiring information on competitors and their influence on business operations.
Based on the review of the literature we defined categories of intangibles according to 
Edvinsson and Malone’ s categorisation of organizational, relational and human capital with 
related intangible items that are most frequently discussed in literature and investigated 
within respective questionnaires. Therefore, in the HRM capital category we included 
intangible constructs, like: employees’ co-operation and teamwork capacity, knowledge 
transfer, system for employees’ motivation, HRM practices, like: annual performance 
appraisals, work-life balance, health and occupation programms. We included union 
activity within the human capital category as it is reflection of employees’ relations. 
Organizational capital category comprises intangible constructs: corporate culture, 
board and ownership structure, customer/supplier support, R&D activities, quality and 
improvement process, patents. Relational capital category consists of next intangible 
constructs: corporate image, brand recognition, brand value, new customers, customers’ 
loyalty and long-term relationship with customers, their impact on product development 
and business decisions, customers’ griviences, customers’ share of sales, suppliers’ 

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 16
relationship and their influence on product development, competition and competitors’ 
influence on business decisions. We also examined investment of Slovenian companies in 
human resource management (HRM), marketing activities, information technology (IT) 
and research and development (R&D) as investment in these areas is considered to be 
most important for companies to increase their intellectual base as suggested by Youndt 
et al. (2004). Table 1 in Appendix shows detailed classification of intangible capital in 
human, organizational and relational categories with related intangible items.
We sent the questionnaires to 364 Slovenian manufacturing companies. In order to 
encourage companies to participate in the study, we guaranteed complete confidentiality 
of data. The questionnaires were answered by CEOs, marketing and sales managers as 
well as HRM managers who were able to adequately assess the firm’s resource base with 
respect to its performance. All participants held high-level managerial positions, thus the 
potential for significant data biases was diminished. 
We received 102 questionnaires, a response rate of 28 per cent. In the research study we 
included 93 manufacturing companies that had fulfilled most of the questionnaires on 
different type of intangible capital. Hierarchical cluster analysis excluded 5 companies 
as potential outliers, so our results are based on 88 companies. Twenty six firms were 
identified as high performing companies based on their financial indicators, while sixty 
two of them as low performing companies. Secondary data was retrieved from annual 
financial reports for a year 2009, composed by The Agency of the Republic of Slovenia for 
Public Legal Records and Related Services (AJPES). 
2.3. Results and discussion 
2.3.1. Firm performance and intangible core resources of the companies
Literature review indicates that there is no widely accepted consensus about definition, 
dimensionality and measurement of the firm performance concept. Many studies measure 
firm performance with a single indicator representing this concept as unidimensional 
(Glick, Washburn and Miller, 2005). Others suggest that in case of several dimensions, 
those most relevant to the research should be chosen (Richard, Devinney, Yip and 
Johnson, 2009). Thus, we measured firm performance based on accounting information 
contained in financial statements. In order to define high performing companies we used 
performance indicators useful in predicting the capacity of the firm to generate profit, 
productivity and growth from the use of its current resources. We measured profitability 
by using ROA, ROE, EBIT, and EBITDA financial indicators. Since size of the company 
and profitability are interdependent, we used sales indicators as a measure of size most 
closely related to profitability and growth while we used value added per employee as a 
measure of productivity. These indicators have been identified also as factors for which 
empirical studies found to be important drivers of firm’s disclosure policy
9
. A widely held 
9 See Alsaeed (2006) for an extensive summary of studies examining relationship between information 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 17
view is that indebted firms have an incentive to voluntarily increase the level of corporate 
disclosure in order to fulfil information needs of investors (Al-Shammari, 2007; Alsaeed, 
2006). Therefore, we also included other measures of financial performance like indicators 
of indebtedness and liquidity. 
Size of a company is a trait that is related to the tendency of firm to invest in intangible 
assets (Arrighetti et al., 2014) and to disclose information on intangible investments. In 
our analysis company size was measured by total assets, as has been done in other studies 
on voluntary disclosure (Depoers, 2000; Ho and Wong, 2001). Additionally, we used a 
measure of company’ s size with respect to the number of employees. Therefore, we divided 
companies into 5 groups: size 1 (from 0 to 50), size 2 (from 50 to 250), size 3 (from 250 to 
500), size 4 (from 500 to 1000), size 5 (above 1000). Therefore, the full set of performance 
measures that we used is:  ROA, ROE, EBIT, EBITDA, value added per employee, ROS, 
sales growth, sales profit, leverage, neto debt, liquidity, size with respect to total assets and 
to employees’ number.
To identify high performing companies, we performed an agglomerative hierarchical 
cluster analysis in SPSS 15. In order to identify eventual outliers we first used hierarchical 
cluster analysis with nearest neighbour method. After excluding identified outliers we 
used two step cluster analysis for classification of firms into groups based on their financial 
indicators calculated from firms’ accounting data. We used t-test to find differences 
between groups. 
The cluster analysis revealed two distinct clusters of companies with different 
performance indicators. The differences between the groups of firms are statistically 
significant at 5% level (t-test). Compered to companies in cluster 2 (low performing 
companies), companies in cluster 1 (high performing companies) are characterised as 
being more successful as they show better performance based on identified financial 
indicators. Results presented in Table 1 show that high performing companies are bigger 
regarding the size of total assets and characterized by negative debt, high profitability 
and productivity, with better operational efficiency and growth potential
10
. Sales 
growth, liquidity and size of the company regarding the number of employees are not of 
significant difference
11
. 
disclosure and performance.
10 For more accurate explanation of financial indicators it would be needed to compare them over time in 
order to see their trend, and compare them to other companies in the industry.
11 We also performed cluster analysis based only on financial indicators (EBIT, EBITDA, TOTAL ASSETS, 
and ROE) and got very similar results.

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 18
Table 1: Clusters of companies based on identified financial indicators
Financial indicators
Cluster 1 (n=26) 
High performing 
companies
Cluster 2 (n=62) 
Low performing 
companies
P-value
mean SD mean SD
ROA 0.05 0,038 0.02 0.020 0.000
ROE 0.07 0.062 0.02 0.067 0.002
EBIT 3,299,936 3,055,350 329,891 436,864 0.000
EBITDA 7,622,810 6,210,806 2,063,429 1,610,871 0.000
V ALUE ADDED PER 
EMPLOYEE 98,901 138,160 28,228 20,208
0.000
ROS (%) 7.42 11,13 0.98 1.719 0.000
SALES GROWTH (%) -18.69 14.74 -18.53 22.98 0.974
SALES PROFIT 77,420,077 75,988,908 31,536,585 24,025,388 0.000
LEVERAGE 0.38 0.193 0.57 0.206 0.000
NETO DEBT -0.10 0.268 0.17 0.262 0.000
LIQUIDITY 1.92 2.05 1.36 0.84 0.075
SIZE WITH RESPECT 
TO TOTAL ASSET 115,985,341 124,535,457 36,659,710 33,321,828
0.000
SIZE WITH RESPECT 
TO EMPLOYEES’ 
NUMBER 2,65 1,093 3,00 1,215
0.213
Note. SD stands for Standard Deviation. 
Source: AJPES (2015) and own calculations.
2.3.2.  Companies’ characteristics by company clusters and type of intangible capital
To reveal the difference between the groups of companies regarding their internal 
organizational characteristics and corresponding share of intangible capital we applied 
questions from the questionnaires on identified clusters of firms. For each of the two 
clusters, mean values or the share of positive answers to each individual question and 
standard deviations are provided with data on the statistical significance of differences 
between the clusters. Results presented in Table A1 in Appendix show that in most cases 
the share of intangible capital is higher for high performing companies.
When we explore these two groups in more detail we found significant differences regarding 
their internal organizational characteristics mainly with respect to the level of investment 
in human and relational capital, which is higher for high performing firms. In relation 
to human capital most of differences occur regarding the perceptions about training and 
knowledge transfer, teamwork and implementation of some HRM practices, which are 
all elements associated with better performance (Capelli and Neumark, 2001; Siebers 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 19
et al., 2008; Bloom and Van Reenen, 2010). As regards relational capital of firms, high 
performing companies have more developed CRM and brand management capabilities
12
 
as well as corporate image, which also contribute to better firm performance according 
to previous research evidence (Srivastava et al., 1998; Sulait, 2007; Morgan, Slotegraf, 
and Vorhies, 2009). High performing companies also invest more in IT maintenance, 
which enables the creation of knowledge and its better utilization (Y oundt, Subramaniam 
and Snell, 2004). Below we report and discuss mainly the results which are statistically 
significant between two clusters.
2.3.2.1. Human capital
The statistically significant results for two clusters with respect to human capital are 
presented in Table 2, which shows that the group of high performing companies possesses 
higher share of human capital primarily in terms of developing of employees’ core 
competences like teamwork skills and employees’ abilitities to share their knowledge 
with others, as well as in terms of employing HRM practices, which transfer employees’ 
competences into capital. 
Within the group of high performing companies teamwork, is considered to be a common 
form of employee cooperation on different levels of organization. All of more successful 
companies state that there is a great need for employyes to work in work groups and in 
different teams in individual department while majority of them (84.6 percent) claims 
that there is a strong presence of forming interdepartmental teams reflecting increased 
organizational flexibility. This is in line with the research done in Slovenia by Zupan, 
Farčnik, Fišer, Kodarin and Valenčič (2010) who found a significant correlation between 
organizational flexibility
13
 and productivity of 66 Slovenian manufacturing companies. 
In addition, the result is in line with other studies showing the importance of employee 
co-operation and department integration for development of intangible capital (Nahapiet 
and Goshal, 1998; Van den Bossche et al., 2006; Wang et al., 2014) and in prevention of its 
loss in case that employee leaves the company. This is achieved with the transformation 
of individual knowledge into shared cognition and “know-how” embodied within the 
team (Fernandez et al., 2000; Wang et al., 2014). Important factor of knowledge keeping 
within the firm in majority of high performing companies (71.4 percent versus 24.3 
percent of low performers) is also knowledge transfer, which high performing companies 
systematically promote among their employees as they believe they would have no 
problem finding skilled replacement in case of employee departure. Teamwork and 
12 Brand management capabilities concern the processes and activities that enable a firm to develop, support, 
and maintain strong brands (Aaker, 1994; Hulland, Wade and Antia, 2007)  while CRM capabilities underlie 
a firm’s ability to create and manage close and strong relationships with customers (Rust, Ambler, Carpenter, 
Kumar and Srivastava, 2004).
13 measured as a sum of scores for qualitative questions regarding teamwork, organizational change 
implementation, process of continuous improvements, specificity of job descriptions, internal communication, 
informal means of communication, flexibility as a company value, and implementation of new business 
practices and methods

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 20
department integration contribute not only to increased productivity and performance 
(Maranno and Haskel, 2006; Boning, Ichniowski and Shaw, 2007; Bloom and Van Reenen, 
2010; Berg, Appelbaum, Bailey and Kalleberg, 2000; Dunlop and Weil, 2000; Hamilton, 
Nickerson, and Owan, 2003; Bartel, 2004) but also to increased disclosure of information 
and building loyalty to the firm (Starbuck, 1992). 
Majority of more successful firms employ a range of HRM practices like annual performance 
appraisals, work-life balance programs and health improvement programs. They are using 
annual performance appraisals to provide employees with targeted feedback on their 
past performance and guidance to the achievement of work-related objectives, which 
facilitate employee learning and development (78.5 percent) and lead to higher operating 
performances (Forzza and Salvador, 2000). Special programs and policies aimed at 
improvement of work-life balance of employees (38.4 percent) and health improvement 
(76.9 percent) can increase job satisfaction and employees’ commitment to the company 
leading to increased productivity and reduction in absenteeism, presenteeism and 
employee turnover (Center for organizational excellence of American psychological 
Assocciation, 2015). A multidisciplinary literature review on the relationship between 
HRM practices and performance reveals that studies predominantly reported positive 
effect of individual HRM practices on performance or productivity (Siebers et al., 2008; 
Bloom and Van Reenen, 2010). 
In relation to human capital, group of low performing companies significantly differ from 
high performing companies regarding employees’ organization in unions. Our results 
show that higher degree of employees in less successful firms (74.5%) is organized in 
unions
14
. This result is in line with the view that organizing employees in unions could lead 
to decreased productivity because of misallocation of work, restrictive work practices, the 
threat of adversarial industrial relations, which lowers trust and cooperation and causes 
the firm to invest less (Metcalf, 2002; Ehrenberg and Smith, 2012)
15
.  
High performing companies also invest more in human capital by providing employee 
training, which is confirmed by their significantly higher yearly costs of training per 
employee (in average 135.971 EUR compared to 46.484 EUR of low performing group 
of companies). According to results of Koch and McGrath’s research (1996) firms that 
systematically train and develop their workers are more likely to enjoy the rewards of a 
more productive workforce than those that do not. As shown by Nerdrum and Erikson 
(2001) investment in education and training increases professional skills and competences 
of employees, which results in better individual and organizational performance and leads 
to higher performance rates and human and organizational capital increase (Y oundt et al., 
2004).
14 Similar result is obtained in the study done by Prašnikar, Voje, Dolžan Lesjak, Gjibexhi and Raičević 
(2010), which show that mainly less productive companies have employees organized in one union.
15 Literature provide also an alternative view, which states that organized unions could increase productivity 
because employees are more satisfied as they have bigger role in decision making process, higher wage and are 
more eager to work (Voje, 2010). Unions may play a monitoring role on behalf of employer, make managers 
less lethargic and stop exploitation of labour (Metcalf, 2003). 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 21
Table 2: The share of human capital in high and low performing Slovenian manufacturing 
companies
HUMAN CAPITAL
Cluster 1 (26) Cluster 2 (62) Sign.
N * share of 
companies in %
SD N * share of 
companies in %
SD
1. TEAMWORK              
Cooperation in different teams in individual 
department (not exclusively performing 
tasks in the same workplace) is a common 
form of employees’ operation. 
26 100 0.000 59 69.4 0.464 0.001
There is a strong presence of employees’ 
cooperation between different departments 
and forming of interdepartmental teams.
26 84.6 0.368 59 61.0 0.492 0.031
2. KNOWLEDGE TRANSFER
Successors for most of key employees exist. 14 71.4 0.469 41 24.3 0.435 0.001
3. HRM PRACTICES:          
3.1. ANNUAL PERFORMANCE 
APPRAISALS
Annual performance-review meetings are 
conduced effectively and thus significantly 
contribute to improved performance. 
14 78.5 0.426 41 39.0 0.494 0.010
3.2. WORK-LIFE BALANCE              
Special programs aimed at improving 
work-life balance of employees exist in the 
company. 
13 38.4 0.506 40 12.5 0.335 0.038
3.3. HEALTH AND OCCUP ATION 
PROGRAMMS
             
Special programs for improving employee 
health (other than those required by law) 
exist in the company. 
13 76.9 0.439 41 46.3 0.505 0.055
4. UNION ACTIVITY              
Exactly one union organization exists in 
the firm.
26 50.0 0.510 59 74.5 0.439 0.026
* In the table we replaced mean values of binary data by the share of companies as an incidence of a specific intangible capital aspect/practice.
N mean SD N mean SD Sign.
5. INVESTMENT IN EMPLOYEE 
TRAINING
Total costs for employees’ training per year 
in EUR.
6 135.971 159.910 25 46.484 40.712 0.015
Source: FELU (2011-2014) and own calculations.

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 22
2.3.2.2. Organizational capital
Groups of firms significantly differ regarding their ownership structure (see Table 3). 
On average, higher share of firms within the group of high performing companies (34.6 
percent) are firms with foreign ownership. This result is in line with a range of international 
studies which show that firms with foreign ownership perform better than domestic-
owned firms (Doms and Jensen, 1995; Chhibber and Majumdar, 1999; Barbosa and Louri, 
2005). Superior group of companies also invest more in IT maintenance, salaries of IT 
personnel or IT licence costs.
Table 3: The share of organizational capital in high and low performing Slovenian 
manufacturing companies
ORGANIZATIONAL CAPITAL
Cluster 1 (26) Cluster 2 (62) Sign.
N share of 
companies 
in %
SD N share of 
companies 
in %
SD
1. OWNERSHIP STRUCTURE              
The dominant ownership share is in 
possession of foreign owners.
26 34.6 0.485 59 13.5 0.345 0.025
* In the table we replaced mean values of binary data by the share of companies as an incidence of a specific intangible capital aspect/practice.
2. IT INVESTMENT N mean SD N mean SD Sign.
Percentage of total IT cost not used for 
software or hardware investment but 
for other things like licence costs, IT 
personnel salaries, IT maintenance,…  
11 30.518 27.816 37 8.307 15.895 0.001
Source: FELU (2011-2014) and own calculations.
When examining R&D activities in companies focusing on the characteristics of product 
and process innovation, even though the difference between the groups is not statistically 
significant, results show that intensity of R&D activities is higher for high performing 
companies as they show slightly better performance regarding introduction of new 
products (94% introduced new products in last five years versus 90% of low performers). 
Both groups gave the highest relevance to improvement of existing products as the most 
important type of innovation followed by introducing new product lines, expending 
existing product lines, repositioning and introducing globally new products. Low 
performing companies gave higher importance to repositioning in front of introducing 
new product lines. High performers gave higher loadings on importance to all of individual 
innovation types. 
In average higher share of high performers (81% versus 73% of low performers) 
introduced process innovation in terms of production process improvement (81% versus 
67%) and improvement of support services like maintenance, sales, IT, accounting and 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 23
other processes in the company (69% versus 67%)
16
. Though, low performers show better 
performance regarding average number of introduced patents even though the group 
of superior companies increases the number of introduced patents every year as well as 
investment in R&D in contrast to low performing companies whose R&D investments 
decreases by years. Investment in R&D is considered to be fundamental in creation of new 
knowledge. As shown by Youndt et al. (2004) history of greater R&D investments leads 
to greater capacity to absorb new knowledge, which should in turn lead to higher level of 
human capital. In order to protect new knowledge companies create integrated knowledge 
embodied in their processes, routines and products, which in turn increase the level of 
organizational capital.
2.3.2.3. Relational capital
Based on our results the group of high performing companies possesses higher share of 
relational capital in terms of the firms’ ability to relate with its customers and manage their 
perceptions regarding brand recognition and corporate image (see Table 4). 
Firms from this group appear to be more developed in terms of marketing capabilities 
particularly customer relationship management capabilities, which underlie a firm’s ability 
to create and manage close and strong relationships with customers in order to improve 
long-term customers’ loyalty, which directly contribute to firm performance (Srivastava 
et al., 1998, 2001; Morgan et al., 2009) as well as brand management and measurement 
capabilities  in terms of processes and activities that enable a firm to develop, support, 
and maintain strong brands and corporate image. According to Žabkar, Dimitrieska, 
Dimitrova, and Ivanovska (2010) brand management activities are considered to 
contribute to companies’ productivity as they proved an association between the level of 
brand management and the productivity level with the empirical data in the study of fifty-
nine medium-sized and large manufacturing companies in Slovenia. 
Our results show that 63.1 percent of  high performing companies claim they have 
developed brand architecture (i.e. organized system of brands) while a customer loyalty 
program exists in 25% of more successful companies. Latter is in accordance with the study 
of Fernandez et al. (2000) who showed that firms with former loyal customers achieve 
superior results in relation to their competitors with lower unit costs and a higher market 
share. Our results also show that 50% of more successful companies evaluate corporate 
image by measuring perceptions of the company among different publics in terms of 
quality of management, product or service quality, innovativeness and financial position, 
compared to only 21% of less successful companies. This is in line with the research of 
many marketing scholars who emphasized the impact of reputation on firm success 
16 Similar results can be found in the study done by Redek, Kopriva, Mihelič and Simič (2010) on  the sample 
of 61 companies operating in 23 industries, which showed that companies as the most important types of 
innovation reported: improving existing products, introducing new product lines, expanding existing 
product lines, and repositioning products. Also three quarters of the studied companies improved their 
processes in terms of improved production processes, logistics and distribution, and supporting processes.

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 24
(Aaker, 1991; Keller, 1993; Srivastava et al., 1998, 2001). Namely by developing corporate 
image high performing companies also send signals about their key characteristics, future 
actions and behaviour. They inform external stakeholders about the firm’ s trustworthiness, 
credibility and quality (Galbreath, 2005) and shape the response of customers, suppliers 
and competitors (T eece, Pisano and Shuen, 1997). Schwaiger (2004) displays many positive 
effects of strong corporate image which helps firms in acquiring and retention of best 
employees and customers because of increased confidence in their products and services. 
Also companies with strong corporate image have better access to capital markets, which 
decreases capital costs and lowers procurement rates. Thus a firms’ profitability increases 
with better reputation. 
The group of high performing companies also invest significantly more in marketing 
activities. In average marketing investment increases with the years in contrast to low 
performing group whose investment in marketing activities decreases.
Table 4: The share of relational capital in high and low performing Slovenian manufacturing 
companies
RELATIONAL CAPITAL
Cluster 1 (26) Cluster 2 (62) Sign.
N share of 
companies 
in %
SD N share of 
companies 
in %
SD
1. CUSTOMERS’ RELATIONSHIP 
MANAGEMENT
             
Customer loyalty program exists in the 
company. 
4 25.0 0.500 19 0 0.000 0.025
2. BRAND MANAGEMENT              
Company has developed brand architecture 
(organized system of brands, e.g. monolithic/
unitary, endorsed/hybrid, freestanding/
diversified). 
19 63.1 0.496 46 32.6 0.474 0.023
3. CORPORATE IMAGE              
Company measures perceptions of the 
company among different publics in terms of 
quality of management, product or service 
quality, innovativeness and financial position.
18 50.0 0.514 47 21.2 0.414 0.023
* In the table we replaced mean values of binary data by the share of companies as an incidence of a specific intangible 
capital aspect/practice.
4. MARKETING EXPENDITURES N mean SD N mean SD Sign.
The share of sales in 2007 set aside for 
activities to increase the value of brands 
(including external costs of advertising and 
marketing activities of advertising agencies, 
media).
17 0.046 0.072 35 0.011 0.015 0.008

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 25
The share of sales in 2008 set aside for 
activities to increase the value of brands 
(including external costs of advertising and 
marketing activities of advertising agencies, 
media).
17 0.051 0.095 37 0.010 0.014 0.012
The share of sales in 2009 set aside for 
activities to increase the value of brands 
(including external costs of advertising and 
marketing activities of advertising agencies, 
media).
16 0.055 0.097 37 0.008 0.010 0.005
Source: FELU (2011-2014) and own calculations.
Based on the answers provided in the questionnaires we can also reveal some of the firms’ 
characteristics regarding the business environment in which group of firms operate as well 
as their relationship with customers and suppliers even though the difference between the 
groups is not statistically significant. 
High performing companies operate in more competitive business environment since 
they have, on average, larger number of major competitors compared to the group of 
low performing companies (11 versus 6.79). Some authors stress that sharpening the 
competition in markets leads to the accumulation of intangible resources as firms in such 
environment resort to less imitable intangible assets in order to enhance their distinctive 
know-how and product differentiation (Petrick, Scherer, Brodzinski, Quinn and Ainina, 
1999; Arrighetti et al., 2014). However, from 2008 to 2009 they faced higher increase in 
market share (10% versus 1% in average) with the decrease in number of competitors (for 
1.33 in average). 
Results imply that high performers have more developed supply-chain relational 
capabilities, which in turn may improve customer service and firm performance. Supply-
chain relational capabilities include adoption of long-term relationship with suppliers, 
collaborative communication, supplier involvement in development of new product, 
and use of cross-functional teams, which in turn foster knowledge development and 
exchange, facilitate joint problem solving, promote cooperation, and reduce transaction 
costs (Lado, Paulraj and Chen, 2011). Regarding the relationship with suppliers we can 
see that both groups of companies exchange information with their suppliers. While all of 
high performing companies regularly visit their major suppliers this applies to 82% of low 
performers. Also higher share of high performing companies have relations with suppliers 
that influenced development of new products (83% compared to 76% of low performers). 
Regarding low performing companies results show on bigger customers’ impact on their 
business decisions. A higher share of low performing companies stated that customers 
directly influenced the fundamental companies’ business decisions (43% compared to 33% 
of high performers) and dictated the choice of their suppliers (17% versus 8% among high 
performers). The higher share of low performers also have a long-term contract with most 
important customers (22% versus 17% of high performing companies) and make long-

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 26
term contracts with their new customers (43% versus 17%). Also, low performers inform 
top management about opinions, comments and complaints from their customers and take 
them into accounts when making decisions in greater extend compared to high performers 
(84% versus 75% respectively). These results imply that low performing companies are 
more customer responsive, which is mainly a characteristics of market driven companies 
(Barlow Hills and Shikhar, 2003), that collect information on their customers to assess 
their future needs but do not attempt to create or change customers’ behaviour
17
. Similar 
result was also gained by Koman, Filić, Flerin, and Juriševič (2010) who confirmed that 
less productive companies closely monitor their customers and engage them in product 
development. However, our results show that higher share of high performing companies 
is more successful in obtaining new customers since 58% of them succeed to obtain at least 
10 percent of new customers each year (versus 43% of low performers). 
3. CONCLUSION
The aim of the study was to investigate how firms’ human, relational and organizational 
capital form distinct profile of resources in order to better understand core resources 
(i.e., most valuable, rare, inimitable and non-substitutable) that may generate sustainable 
competitive advantages and lead to superior performance. Therefore, the resource profile 
of Slovenian better performing companies was examined and compared to low performing 
manufacturing companies. We also examined whether investment in human resource 
management (HRM), marketing activities, information technology (IT) and research and 
development (R&D) differs between identified resource profiles of Slovenian companies 
as investment in these areas is considered to be most important for companies to increase 
their intangible asset base as suggested by Y oundt et al. (2004). 
In particular, we find that relatively smaller group of superior performing companies 
hold significantly more intangible capital resources that provide them with the base 
for constructing their respective and different competitive advantages. This group 
of companies invest significantly more in development of human, relational and 
organizational capabilities in terms of employees’ training, marketing activities and 
maintenance of IT system. 
For the companies in the studied sample following core intangible resources that favourably 
differentiate better performing companies from lower performing companies stand out:
1. Human capital capabilities like: development of employees’ co-operation and teamwork 
capacity with promotion of knowledge sharing, as well as employing HRM practices 
supported by investment in employees, which are fundamental drivers of knowledge 
development and development of firms’ enhanced relationship with their employees 
in order to keep this knowledge within the company. They are all factors that increase 
intangible asset base and hence positively influence firm performance.  
17 In contrast market-driving firms set the needs and desires of their customers and thus change their 
behaviour and attitudes (Narver, Slater and MacLachlan, 2000; Kumar, Scheer and Kotler, 2000). 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 27
2. Organizational capabilities like investment in IT enable companies to increase the use 
of theeir knowledge resources and enhance cooperation and knowledge sharing among 
employees. 
3. From the resource-based view, relational capabilities like development of customer 
relationship management and brand management as well as corporate reputation 
building are recognized as important strategic assets capable for generating sustainable 
firm performance. 
Based on this study, our findings suggest that high performing companies are strategically 
oriented towards development of those core capabilities and competences that are not 
dependent on individual employees’ knowledge but are residing in the organization. Due to 
established working conditions that foster employees’ cooperation and knowledge sharing 
companies enhance teamwork and increase interdependence among their employees 
and therefore keep the knowledge within the firm. Companies provide employees with 
targeted feedback and guidance to help them learn and develop. These HRM activities 
are considered to directly affect the level of human capital. At the same time as employees 
learn and increase their human capital they create organizational knowledge, which is 
foundation for organizational learning and knowledge accumulation. Intensive employees’ 
training also contribute to the adoption and sharing of companies’ common values, which 
consequently have a strong impact on development of organizational capital. 
Essential in the management of firm resources is also building and maintaining a good 
reputation of the firm with strong brand and close relationships with customers. Better 
cooperation of firm’ s employees and closer relationship with firm’ s customers improves the 
efficiency and effectiveness of resource utilization while their interaction further extends 
intangible asset base of the firm due to the synergistic effect of intangible resources, which 
leads to greater success of the firm. 
Therefore, findings of the study suggest that managers should put a considerable attention 
to the analysis and identification of companies’ core intangible resources and their 
functions within the firm. This allows managers not only to concentrate their efforts on 
understanding firms’ strengths and weaknesses and to allocate resources efficiently to 
those intangible assets that may translate into competences and capabilities on which the 
company builds its sustained competitive advantages but also to generate the synergies 
which are more capable of generating sustain economic rents. Thus, our results are in 
accordance with previous results which suggest that firms need to increase their overall 
level of intangible capital in order to improve firm performance (Chen et al., 2004) since 
companies with higher share of intangible capital are able to attain significantly better firm 
performance than less reach companies (Y oundt et al., 2004).
In this study we investigated only individual dimensions of intangible capital but many 
authors suggest strong interdependence between these categories of intangible capital 
in creation, development and utilization of firms’ knowledge. Therefore, firms should be 
aware that it is not sufficient only to possess a resource as intangible resources enhance firm 

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 28
performance through their interaction with other resources. Since intangible resources 
exhibit complementarities and enhance firm performance through their interactions 
it is hard to empirically identify unique resources and attribute superior performance 
to specific assets. Therefore the exploration of these interactions between and among 
intangible resources and their contribution to the success of the firm is a challenge for 
future research. 
 

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 29
APPENDIX 
Table A1: 
Cluster 1 (26) Cluster 2 (62)
Sign.
N mean SD N mean SD
HRM CAPITAL
EMPLOYEE TRAINING
Organized training of employees based on identified needs of the company 
exists.
14 1.00 0.00 41 0.95 0.218 0.409
More than half of employees is involved in training programs annually. 14 0.43 0.514 41 0.59 0.499 0.318
We measure training effectiveness also with other methods not only conducting 
a survey at the end of a training program.
14 0.71 0.469 41 0.49 0.506 0.147
KNOWLEDGE TRANSFER
Company provide regular on the job training (e.g. apprenticeship, mentorship, 
job rotation).
14 1.00 0.000 41 0.95 0.218 0.409
Company systematically induce knowledge transfer among employees. 14 0.93 0.267 41 0.73 0.449 0.128
Successors for most of key employees exists. 14 0.714 ,469 41 0.243 0.435 0.001
PERFORMANCE FEEDBACK
Company provides regular performance feedback to its employees. 14 0.64 0.497 41 0.63 0.488 0.954
Annual performance-review meetings are conducted for at least key employees. 14 0.86 0.363 41 0.66 0.480 0.164
Annual performance-review meetings are conduced effectively and thus 
significantly contribute to improved performance. 
14 0.785 0.426 41 0.390 0.494 0.010
MOTIV ATION SYSTEM
A system for promotions based on employee performance exists. 14 0.57 0.514 41 0,73 0.449 0.271
We use other forms of motivation apart from promotion and pay for 
performance.
14 0.71 0.469 41 0.68 0.471 0.830
System for motivation employees is developed in all organizational units. 14 0.71 0.469 41 0.63 0.488 0.594

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 30
TEAMWORK CAP ACITY 
There is a great need for workers to work in work groups because of the nature 
of the work processes.
26 1.00 0.000 59 0.893 0.305 0.094
Cooperation in different teams in individual department (not exclusively 
performing tasks in the same workplace) is a common form of workers’ 
operation. 
26 1.00 0.000 59 0.694 0.464 0.001
There is a strong presence of workers’ cooperation between different 
departments and forming of interdepartmental teams.
26 0.846 0.368 59 0.610 492 0.031
CO-OPERATION AMONG EMPLOYEES
There is a need for a lot of co-operation among employees to perform their 
tasks successfully.
13 0.92 0.277 41 0.98 0.156 0.392
We have systematically introduced teamwork in the last five years. 13 0.69 0.480 41 0.63 0.488 0.708
Teamwork is the dominating form of work for majority of employees. 13 0.69 0.480 41 0.49 0.506 0.205
WORK-LIFE BALANCE
Special programs aimed at improving work-life balance of employees exists in 
the company. 
13 0.384 0.506 40 0.125 0.335 0.038
More than half of employees is involved in these programs for improving work-
life balance.
14 0.214 0.426 40 0.075 0.267 0.159
Because of these programs for improving work-life balance the general level of 
satisfaction has increased and turnover decreased. 
14 0.285 0.469 40 0.100 0.304 0.096
HEALTH AND OCCUP ATION PROGRAMMS
Special programs for improving employee health (other than those required by 
law) exists in the company. 
13 0.769 0.439 41 0.463 0.505 0.055
More than half of employees is involved in these health-improvement programs. 13 0.38 0.506 41 0.29 0.461 0.543
Because of these health-improvement programs the general level of health of 
our employees has improved and sick-leave hours have decreased. 
13 0.54 0.519 41 0.34 0.480 0.212
UNION ACTIVITY
Workers in the company are organised in unions. 26 0.96 0.196 59 0.93 0.254 0.602
Exactly one union organisation exists in the firm. 26 0.500 0.510 59 0.745 0.439 0.026
Union leadership(s) is (are) concerned with the question of how the firm should 
increase productivity and therefore its competitive position.
26 0.27 0.452 59 0.15 0.363 0.209
TRAINING COSTS
Total costs for training per year. 6 135.971 159.910 25 46.484 40.712 0.015
RELATIONAL CAPITAL

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 31
BRAND AND CORPORATE IMAGE
BRAND RECOGNITION
Company develops its own brands (do not participate in finishing operations 
under foreign brand or private labels for dealers/merchants).
19 0.74 0.452 46 0.61 0.493 0.333
Company develops a corporate brand, in addition to the separate brands for 
your products / services.
19 0.53 0.513 47 0.70 0.462 0.180
Company has developed  brand architecture (organized system of brands, e.g. 
monolithic/unitary, endorsed/hybrid, freestanding/diversified). 
19 0.631 0,496 46 0.326 0.474 0.023
BRAND V ALUE 
Company brands are legally protected (patents, trademarks). 19 0.74 0.452 46 0.85 0.363 0.302
Between 2006-9 we financed activities to increase brand value, either corporate 
brands or product/services brands.
19 0.68 0.478 46 0.78 0.417 0.410
We measure brand value, either corporate brands or product/services brands. 19 0.26 0.452 45 0.13 0.344 0.215
CORPORATE IMAGE
Company manages relationships with the media (corporate management 
accessibility, openness with the media and support for journalists).
19 0.79 0.419 46 0.91 0.285 0.173
Company measures perceptions of the company among different publics in 
terms of quality of management, product or service quality, innovativeness and 
financial position.
18 0.500 0.514 47 0.212 0.414 0.023
Company measures perceived corporate social responsibility of the company 
(attitude to the community and fair play in business) among different publics.
18 0.50 0.514 47 0.36 0.486 0.316
A communication system (e.g., intranet) which provides continuous reporting 
and transfer of information to responsible exists in the company.
19 0.947 0.229 47 0.765 0.428 0.086
MARKETING EXPENDITURES
The share of sales in 2006 set aside for activities to increase the value of brands 
(including external costs of advertising and marketing activities of advertising 
agencies, media).
15 0.044 0.077 35 0.018 0.051 0.170
The share of sales in 2007 set aside for activities to increase the value of brands 
(including external costs of advertising and marketing activities of advertising 
agencies, media).
17 0.046 0.072 35 0.011 0.015 0.008
The share of sales in 2008 set aside for activities to increase the value of brands 
(including external costs of advertising and marketing activities of advertising 
agencies, media).
17 0.051 0.095 37 0.010 0.014 0.012

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 32
The share of sales in 2009 set aside for activities to increase the value of brands 
(including external costs of advertising and marketing activities of advertising 
agencies, media).
16 0.055 0.097 37 0.008 0.010 0.005
CUSTOMERS
NEW CUSTOMERS
In the period 2006-2008, we carried out activities at all times to attract new 
customers.
12 1.00 0.000 37 0.92 0.277 0.319
In the period 2006-2008, we obtained (on average) at least 10% of new 
customers.
12 0.58 0.515 37 0.43 0.502 0.373
In the period 2006-2008, we were mainly making long-term contracts with our 
new customers.
12 0.17 0.389 37 0.43 0.502 0.101
In the period 2006-2008, we were monitoring the behaviour of our customers 
with the CRM system.
4 0.00 0.000 17 0.06 0.243 0.640
LOYALTY OF CUSTOMERS
In the period 2006-2008, interested buyers of our products were informed via 
e-mail and/or other information channels.
4 0.75 0.500 19 0.74 0.452 0.959
In the period 2006-2008, interested buyers of our products were able to get 
access to our products through various distribution channels (Internet, catalogs 
…).
4 0.75 0.500 19 0.79 0.419 0.869
Customer loyalty program exists in the company. 4 0.250 0.500 19 0.000 0.000 0.025
In the period 2006-2008, we carried out activities at all times in order to attract 
new customers.
4 1.00 0.000 18 0.83 0.383 0.404
In the period 2006-2008, our customer loyalty program was increasing on 
average at 10% (in value).
4 0.00 0.000 18 0.06 0.236 0.649
In the period 2006-2008, the majority of the new members in loyalty program 
were active.
4 0.00 0.000 18 0.00 0.000 -
CUSTOMERS LONGTERM RELATIONSHIP
In the period 2006-2008, we had long-term contract with at least one of the 
most important customers.
12 0.92 0.289 37 0.95 0.229 0.720
In the period 2006-2008, we had long-term contract with majority of the most 
important customers. 
12 0.58 0.515 37 0.68 0.475 0.569
In the period 2006-2008, we had long-term contract with all most important 
customers.
12 0.17 0.389 37 0.22 0.417 0.718

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 33
CUSTOMERS IMP ACT 
In period 2006-2008, we regularly meet with our customers in order to find 
about their needs and to plan needed changes.
12 1.00 0.000 37 0.95 0.229 0.421
In period 2006-2008, consumer representatives of our products were engaged in 
the process of the development of new product
12 0.92 0.289 37 0.78 0.417 0.312
In the period 2006-2008, our customers were at least indirectly influencing the 
decisions in our company.
12 1.00 0.000 37 0.86 0.347 0.186
In the period 2006-2008, our customers were directly influencing the 
fundamental decisions in our company.
12 0.33 0.492 37 0.43 0.502 0.554
In the period 2006-2008, our customers were dictating us the choice of our 
suppliers.
12 0.08 0.289 36 0.17 0.378 0.489
CUSTOMERS GRIVIENCES
In the period 2006-2008, we collected and nalysed opinions, comments and 
complaints of our customers.
4 1.00 0.000 19 0.95 0.229 0.657
In the period 2006-2008, the top management was informed with opinions, 
comments and complaints from our customers.
4 0.75 0.500 19 0.84 0.375 0.676
In the period 2006-2008, top management was taking into accounts the 
opinions, comments and complaints from our customers when making 
decisions
4 0.75 0.500 19 0.84 0.375 0.676
CUSTOMERS SHARE OF SALES
The share of sales (based on the value of sales through B2B) of the largest 
customer in 2006
9 23.411 11.066 28 27.395 22.462 0.614
The share of sales (based on the value of sales through B2B) of the largest 
customer in 2007
9 23.400 10.442 30 26.207 21.788 0.712
The share of sales (based on the value of sales through B2B) of the largest 
customer in 2008
10 21.830 11.630 32 21.835 18.928 0.999
The share of sales (based on the value of sales through B2B) of the largest 
customer in 2009
10 22.830 13.982 34 26.032 22.323 0.671
The share of sales (based on the value of sales through B2B) of the second 
largest customer in 2009
10 9.720 4.635 35 11.821 6.789 0.365
SUPPLIERS RELATIONSHIP AND THEIR INFLUENCE
In the period 2006-2006, we exchange information with our suppliers. 12 1.00 0.000 38 1.00 0.000 -
In the period 2006-2008, we regularly visited our major suppliers 12 1.00 0.000 38 0.82 0.393 0.133
In 2006-2008, relations with suppliers promote the development of new 
products or services in our company.
12 0.83 0.389 38 0.76 0.431 0.618

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 34
COMPETITION AND COMPETITORS INFLUENCE
Number of major competitors in your core activities in 2009 11 11.00 16.882 28 6.79 4.003 0.217
Y our market share in your core business in 2009 11 33.55 30.566 29 21.66 18.716 0.143
Market share of three largest firms in your core business in 2009 11 45.27 26.154 28 50.96 23.549 0.704
Number of major competitors in your core activities in 2006-2008 9 12.33 21.994 23 5.00 3.908 0.126
Y our market share in your core business in 2006-2008 9 23.11 32.502 24 20.21 21.553 0.767
Market share of three largest firms in your core business in 2006-2008 10 51.60 26.559 22 44.64 33.842 0.571
In the period 2006-2008, the activities of our major competitors had an impact 
on our business.
12 0.833 0.389 36 0.805 0.401 0.835
In period 2006-2008, our company has aggressively responded to the strategic 
moves of our main competitors.
13 0.538 0.519 36 0.583 0.500 0.785
In the period 2006-2008, at least one company in our core business had more 
than 20% market share.
12 0.833 0.389 36 0.583 0.500 0.122
ORGANIZATIONAL CAPITAL
IT INVESTMENT
In 2009 company invested in information technology at least 1% revenue. 13 0.384 0.506 39 0.538 0.505 0.346
In 2009 company invested in information technology at least 2% revenue. 13 0.000 0.000 39 0.339 0.347 0.181
In 2009 company invested in information technology at least 3% revenue. 13 0.000 0.000 39 0.025 0.160 0.569
Percentage of revenue invested in IT in 2009. 11 1.000 0.730 36 1.120 1.015 0.724
Percentage of total IT cost used for hardware. 11 29.418 14.311 31 35.048 20.350 0.404
Percentage of total IT cost used for software. 11 39.972 25.283 31 49.764 22.991 0.244
Percentage of total IT cost used for other things like licence costs, IT personnel 
salaries, IT maintenance,…
11 30.518 27.816 37 8.307 15.895 0.001
CORPORATE CULTURE
There are formally declared values of our company 13 0.69 0.480 40 0.65 0.483 0.785
Flexibility and implementing organizational change are explicitly stated as 
company values
13 0.54 0.519 40 0.60 0.496 0.702
Majority of employees acts in accordance with formally declared company 
values
13 0.54 0.519 40 0.55 0.504 0.943

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 35
BOARD AND OWNERSHIP STRUCTURE
The company is privately owned. 26 0.92 0.272 59 0.95 0.222 0.643
The private owner has more than 50 percent share of ownership (dominant 
ownership share).
26 0.73 0.452 59 0.73 0.448 0.985
The dominant ownership share is in possession of foreign owners. 26 0.346 0.485 59 0.135 0.345 0.025
Are the workers’ representatives in your firm members of the governing bodies 
(for example the supervisory board and its comities) and are involved in the 
decision making process?
26 0.50 0.510 59 0.53 0.504 0.831
CUSTOMER/SUPPLIER SUPPORT
Reduced reaction time for customer or supplier demands is important (on the 
scale from 1 to 4).
12 2.92 0.289 40 2.83 0.501 0.550
QUALITY PROCESS
Improved capability for developing new products or procedures. 13 2.538 0.660 40 2.725 0.599 0.346
Improved quality of products or services. 13 2.923 0.277 40 2.825 0.446 0.460
Reduced labour costs per unit. 13 2.769 0.439 40 2.750 0.494 0.901
Improved communication or information exchange internally or with other 
companies or institutions.
13 2.307 0.855 40 2.450 0.639 0.524
IMPROVEMENT PROCESS
Formal continuous improvement process exists. 14 0.785 0.426 41 0.756 0.435 0.826
Are there more than half of employees involved in a formal continuous 
improvement process.
15 0.600 0.507 41 0.536 0.505 0.679
Improvement as a result of this formal process significantly contributes to 
company performance.
14 0.571 0.514 41 0.609 0.494 0.805
R&D ACTIVITIES
New_products_past_years 16 0.937 0.250 51 0.901 0.300 0.670
Repositioning 16 1.358 1.164 51 2.187 0.834 0.317
Improving_existing_products (from 1 to 3) 16 2.437 0.814 51 2.392 0.723 0.832
Extensions_of_lines (from 1 to 3) 16 2.125 1.025 51 1.921 0.717 0.377
New_lines (from 1 to 3) 16 2.250 1.065 51 2.176 0.932 0.791
Globally_new_products (from 1 to 3) 16 1.000 1,211 51 1.470 1.138 0.160

ECONOMIC AND BUSINESS REVIEW  |  VOL. 20  |  No. 1  |  2018 36
Introduce_process_innovatio 16 0.81 0.403 51 0.73 0.451 0.493
Improve_production_process 16 0.81 0.403 51 0.67 0.476 0.273
Improve_logistics 16 0.44 0.512 51 0.57 0.500 0.366
Improve_support_services 16 0.69 0.479 51 0.67 0.476 0.879
P ATENTS
Patents_in_2009 16 0.812 1.905 51 0.980 2.881 0.828
Patents_in_2008 16 0.687 1.580 51 0.882 2.754 0.789
Patents_in_2007 16 0.437 1.263 51 0.803 3.816 0.708
Patents_in_2006 16 0.375 1.258 51 0.980 4.292 0.581
R&D EXPENDITURES
In 2009 R&D expenditure amounted to at least 1% of  revenue. 16 0.750 0.447 51 0.882 0.325 0.201
In 2009 R&D expenditure amounted to at least 2% of  revenue. 16 0.437 0.512 51 0.588 0.497 0.297
In 2009 R&D expenditure amounted to at least 3% of  revenue. 16 0.312 0.479 51 0.431 0.500 0.405
R&D expenditure in 2006. 12 9.367.021,50 27.944.155,976 32 1.544.253,69 3.397.671,200 0.581
R&D expenditure in 2007. 13 8.506.338,23 25.457.239,856 33 1.397.582,00 3.391.118,038 0.708
R&D expenditure in 2008. 13 9.574.801,31 29.718.841,704 34 1.370.427,15 2.789.384,922 0.789
R&D expenditure in 2009. 14 9.771.409,93 31.481.598,431 33 1.272.009,85 2.257.518,075 0.828
Source: FELU (2011-2014) and own calculations.

G. LALOVIĆ, M. KOMAN  |  DO BETTER PERFORMING COMPANIES POSSESS MORE INTANGIBLE ASSETS ... 37
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