Applying Fuzzy Logic to derive an Intellectual Capital index: Austrian Universities as an Example"

In the IC literature, basically two strategies emerged in the last decades: first, measurement and second, management of IC (Habersham and Piber, 2003). The measurement approach tries to evaluate IC in a quantitative way. Examples of this first stream are the models of Stewart (1997) and Edvinsson and Malone (1997). The management approach, instead, is based on preferably qualitative IC measurement models and stresses the usefulness of IC in decision-making. Examples of this second stream are the Intangible Assets Monitor of Sveiby (1997) and the Balanced Scorecard of Kaplan and Norton (1996). The following article belongs to the measurement stream by hereby regarding the qualitative nature of IC indicators peculiar of the management approach. Applying a fuzzy logic approach it aims at presenting a different way to determine a comprehensive IC index, The fuzzy logic methodology identifies a fuzzy expert system (FES) which transfers knowledge in a mathematical algorithm. This algorithm allows taking into account the interactions between the qualitative nature of most IC indicators and the different IC subcategories human, relational, and structural capital (for definitions of IC see for example, Bontis, 1998). The model, which can be virtually declined in the different firm’s industry, has been created ad hoc and applied to the Austrian university sector due to the fact that that the Austrian public universities are the first institutions worldwide obliged by law (UG 2002) to publish Intellectual Capital Reports (ICRs). This provides us with a critical mass of standardized indicators, allowing us to run the model elaborated.