Intellectual Capital and Value Creation Process in Family Firm: A New Combined Model

The purpose of this paper is to define a new combined model of business valuation for family firm, considering the implications of IC. The role of the family component in business valuation is condensed into the continuity of a trans- generational perspective. The question appears to be centred on the consistency of the familiness link with respect to the economic entity. In other words, it becomes essential to understand the provisional character of the proactive action of family members on business performance levels. After having discussed some of critical theoretical opinions on the peculiar aspects of family business—with particular attention to the relationship between the contribution of cognitive resources inferable from the familiness in the company management and the propensity to create value by the company itself—the aim is to find the most appropriate method to enhance the specificity of the family business and express the size of the equity value in a neutral and objective manner. The methodology is deductive; the integrated model is structured starting from the general framework of business valuation and then proceeds with its adaptation to familiness, intended as a particular attestation of IC. In this way, a new integrated model is made available for a subsequent step of empirical implementation and validation through its application in a family organization. The main advantage of this model is the ability to measure and manage IC and financial/non-financial performance. The added value of this work will enrich the academic literature regarding IC measurement systems in family firms; it also provides an original integrated model that is able to exhibit the advantages highlighted above.