[2] But, as with other intangible assets, there is no consensus definition of what this organizational capital is, how to measure it, or how to best quantify its contribution to output (either current or future).
[3] Organizational capital was first defined by Prescott and Visscher (1980) to be the accumulation and use of private information to enhance production efficiency within a firm.
[4] Organizational capital can be formally modeled as a cluster of complementary practices and the existence of these complementarities in organizations can be empirically tested.
[5] Brynjolfsson, Lorin Hitt and Shinkyu Yang measured organizational capital in a sample of several hundred large American firms over 11 years and found that it was correlated with information technology (IT) investments and that the combination of IT and organizational capital was disproportionately productive.
[9] They conclude that firms with richer "languages" retain more employees and are therefore more likely to promote senior managers from within, exhibit greater variability in the compensation levels of their managers and that compensation rises more quickly over time in firms with richer languages.