Knowledge Capital Management of Indian Public Sector Enterprises

Abstract

Productivity conies from Knowledge Capital (KC) aggregated to the employees in the form of useful training and company-relevant experience. His or her wage is based on prevailing wage rates for entry level skills at the time of joining. Ten years later, that person becomes a manager or expert, earning three or four times the entry level wages. How does a firm justify spending three times more on the identical person? The accumulation of company-specific knowledge explains the difference. During those ten years, the organization invested anywhere from a year to several years of salary in helping the employee to function more effectively. In that way, the company will be recovering the investment on its knowledge capital as incremental profits. Value Added Intellectual Coefficient (VAIC) is a management and control tool that is designed to enable the organizations to monitor and measure the KC performance and potential of the firm. The primary objective of this study is to evaluate the performance of Knowledge Capital of the Public Sector Enterprises in India so that ordinary shareholder's earning is maximized. Ten years data i.e. from 2001-02 to 20I0-20II for 50 number of Public Sector Enterprises listed in Bombay Stock Exchange have been taken for analysis.