Intellectual Capital Model in SME’s Tour and Travel in Surabaya

Sri Iswati

, Agus Widodo M.

, Hendarjanto

, Azizah

Anshori

and Dwi Swasana R

Postgraduate School, Universitas

Airlangga, Jln.Airlangga 4-6, Surabaya, Indonesia

Faculty of Economic & Busines, Universitas

Diponegoro, Semarang, Indonesia

Keywords: Intellectual Capital, Human Capital, Structural Capital, Customer Capital, Tour and Travel, SME’s.

Abstract: The purpose of this study is to identify the implementation and model of intellectual capital in SMEs

engaged in travel. Three indicators are used to measure intellectual capital, those are: human capital,

structural capital, and customer capital. This research employs qualitative approach while in-depth

interview is used to collect the data. Informants are from SME’s engaged in in tour and travel which are

located in Surabaya because of their large number.The results show that intellectual capital, especially

human capital has an important role in the company's sustainability, especially to face competition against

other travel companies and airlines that can sell direct tickets to consumers. In this research, SMEs in tour

and travel have been done recording their company’s database. In more specific, SMEs in tour and travel

already have financial report system that can monitor financial transactions at any time. Therefore, it is

suggested that SMEs in tour and travel to use the marketing mix policy to set pricing and promotion and

choose the right promotional media.

1 INTRODUCTION

The prospect of the tour and travel business

(hereinafter referred to as TT) is still very large. This

is triggered by the increasing public demand for

tourism services. The Association of Indonesian

Tours and Travel Agencies (Asita) explained that in

2016 there were 7,000 TT businesses registered in

Indonesia (Radar, JawaPos, Monday, Feb 12, 2018).

The number of tourists in 2016 is around 19 million,

and 2017 is 24 million. The number of foreign

tourists in Surabaya respectively in 2014-2016 is

742,084 people, 853,790 people and 772,058 people

(BPS, data updated Jan. 11, 2018).

In January 2015 has been applied AEC (ASEAN

Economic Community), that is a free trade between

countries in ASEAN. In dealing with AEC, all

companies including TT are required to create value

creation in order to be able to compete, namely by

using intellectual capital (IC) or knowledge capital

inherent in skills, knowledge, and experience, as

well as in organizational systems and procedures.

There are three constructs in the IC, namely:

human capital (HC), structural capital (SC), and

customer capital (CC). Human Capital (HC) is the

core of intellectual capital, (Bontis, et al., 2000) The

level of intellectual capital influences the company's

performance which includes employee productivity,

increased employee skills and increased profits

(Berrymen, 2000), In addition, the level of

intellectual capital affects the financial performance

of service companies (Iswati and Anshori, 2007).

Considering from the scale of business, turnover

and total assets, TT is categorized into small and

medium enterprises (SME). In Surabaya the number

of SMEs grows rapidly. The number of SMEs of TT

in 2010 is amounted to 92, then in 2015 is amounted

to 3,000 and in 2017 is amounted to 5,166 and in

East Java is amounted to 4,112,443 (Diskopukm

Jatim, 2017). There have been many researches on

intellectual capital in Indonesia, but there are still

few which associate with SMEs. The role of IC in

SME can increase its competitive advantage

(Setiarso, 2006).

2 LITERATURE REVIEW

2.1 Resource based Theory,

Knowledge-Based Theory

Resource Based Theory is an entity can achieve its

competitive advantage if the entity has superior

resources, namely scarce resources, difficult to be

Iswati, S., Widodo M., A., Hendarjanto, ., Anshori, A. and Swasana, D.

Intellectual Capital Model in SMEâ

Zs Tour and Travel in Surabaya.

DOI: 10.5220/0007553208750878

In Proceedings of the 2nd International Conference Postgraduate School (ICPS 2018), pages 875-878

ISBN: 978-989-758-348-3

875

replicated by competitors and no substitute (Penrose,

1959), Barney, 1991). Knowledge-based theory

identifies that knowledge can support in achieving

competitive advantage. This happens if the

organization has unique resources, which meet 4

criteria, namely: valuable, rare, imperfect imitability,

and non-subtitution (Edvinsson and Malone, 1997;

Bontis, 2002; Choo and Bontis, 2002).

2.2 Intellectual Capital (IC)

Intellectual capital can be defined in terms of value

creation, namely, "Intellectual material-knowledge,

information, intellectual property, experience that

can be used to create wealth." Stewart (2000). There

are three constructs in the IC, namely: human capital

(HC), structural capital (SC), and customer capital

(CC). Human Capital (HC) is the core of intellectual

capital (Bontis, Keow, Richardson, 2000). HC is the

most important element. HC can be measured

through training programs, credential, experience,

competence, recruitment, mentoring, learning

programs, individual potential and personality

Brinker (2000). Structural Capital (SC) arises from

organizational processes and values that reflect the

internal and external focus of the organization and

the development and renewal of the future.

The constraints faced by SME are that they do

not have the media to store the SC's knowledge due

to SME capital limitations. Knowledge is created,

shared, transferred and applied through

organizational members without the intervention of

automation mechanisms as in large organizations. In

SME, knowledge is attached to documents or other

storage media and is attached.

Good management of customer capital will cause

market change competencies to be developed. If the

organization focuses on the customer, it can serve it

well (Cohen and Kaimenakis, 2007). Compared to

large organizations, SME is easier to develop

customer capital by using available knowledge from

relationships that are established to achieve high

performance (Desouza and Awazu, 2006 pp. 32-43).

SMEs also have closeness to their customers, which

allows SMEs to gain customer knowledge directly

and faster than large organizations (Wong and

Aspinwall, 2004). There are 21 IC measurement

methods grouped into four (Sveiby, 2010). The

measurements are: 1) Direct Intellectual Capital

Methods (DIC). 2) Market Capitalization Methods

(MCM). 3) Return On Assets (ROA). 4) Scorecards

Methods

2.3 Small and Medium Enterprises

(SME) and Tour and Travel

Company (TT)

In Indonesia, SME is divided into 3, namely: Micro,

Small Business, Medium Business (Law No. 20 Th.

2008). Tour and Travel Company (TT) is a business

activity that takes care of travel, including the

provision of tickets, lodging, passports and so on

(kbbi.kata.web.id). Based on the above law, TT is

grouped into SMEs. SME is a forum for the birth of

creative people. Small scale makes it easy for SMEs

to innovate. If the SME is able to manage

knowledge as intellectual capital, it will create

competitive advantage that this will improve the

performance of SMEs (Astuti, 2004). In service

companies, human capital is needed to create

customer satisfaction.

2.4 Previous Studies

The SME Garment Industry Human Capital

Research in West Java, shows that HC is not

optimal. Qualitative method. Of the 8 dimensions of

HC, only the ability dimension has the most role

(Ekawati 2014). Management and development of

intellectual capital. Can create value. The ideal

model for the management and development of

intellectual capital is to use Comprehensive

Intellectual Capital Management (CICM) (Iswati et

al, 2013). Intellectual capital has an effect on SME

performance, but innovation does not affect the

performance of SME (Indriastuti, 2012). Intellectual

capital plays an important role in corporate

performance, both from financial performance and

social performance (Iswati and Anshori, 2007). The

use of the Life Cycle System, especially the IRSA

method (identify, reflect, share, apply) in knowledge

management and intellectual capital for the

empowerment of SMEs is indispensable (Setiarso,

2006).

3 RESEARCH METHODS

This study uses a qualitative approach. The activity

is carried out in Surabaya. The research informants

are company owners. Data collection techniques is

conducted by in-depth interviews. Test data validity

is by triangulating data sources and theory.

ICPS 2018 - 2nd International Conference Postgraduate School

876

4 RESULTS AND DISCUSSION

Its business activities include: selling tour packages,

ticketing, arranging travel documents. Its activities

are directly related to customer satisfaction. Travel

business competition is very tight, therefore to win

the competition travel companies must optimize

their human capital to always provide the best

service to customers. Travel companies use

Armadillo Accounting, a software to monitor

financial performance through smartphones. To

explore intellectual capital implementation in TT,

questionnaires and interviews were used. The

implementation is divided into 3 groups, namely

Customer Capital (CC), Human Capital (HC) and

Structural Capital (SC).

Customer Capital (CC) is a capital related to a

relationship (network) with its partners, both from

suppliers and customers. Results of research on CC

are: 1) Customers are satisfied with the company's

services. 2) The number of customers is always

increasing. 3) Having loyal customers, 4) Improving

customer service. 5) Managers understand the target

market of their products. 6) Consistently always

launching product innovations. From the results of

interviews with CC it can be seen that relations and

customers are important capital in travel companies.

Human Capital (HC) in this study is aimed at

employees owned by travel companies. From the

results of in-depth interviews with informants, the

results of the study are as follows: 1) Having an

employee training program, 20% strongly agree and

70% agree. 2) Have adequate planning. 3) Having a

good team work. 4) Employees have good

competence and 5) Able to innovate products. 6)

Implement participative management, 7) Good

relations between employees. 8) Employees are

quite intelligent and responsive. 9) Attempting to

advance the business. From interviews with Human

Capital on average travel companies have conducted

employee selection and implemented well-planned

training programs. To expand the market, travel

companies routinely attend the travel exhibition.

The company also provides trainings to

employees to improve the quality of human

resources they have. The training includes: 1) IATA

(International Air Transport Association)

terminology, 2) Global indicator, 3) International

Ticketing, 4) Basic Fare Calculation, 5) Confidential

fare, Carrier fare, and 6) Global Distribution System.

The cost of doing the entire training is Rp 1,750,000.

Structural Capital (SC) is the ability of an

organization or company to fulfil the company's

routine process and its structure supports employees'

efforts to produce optimal intellectual performance

and optimal business performance, for example: the

company's operating system, manufacturing process,

organizational culture and corporate management

philosophy. The results of interviews with

informants provide the following results: 1) Have

optimal transaction costs, 2) Fast transaction

process, 3) Running a business efficiently, 4)

Support employees who are marketing innovations,

5) Comfortable work atmosphere, 6) Simple

bureaucratic system, and 7) There is a separation of

functions.

Based on the results of interviews related to

Customer Capital, Human Capital and Structural

Capital, this proves that the role of Intellectual

Capital in TT is quite large. This is because TT

activities are directly related to customer

satisfaction. The financial recording system in TT in

the form of ticketing software such as Simpfull

travel and myTravel, payroll system, training

programs have been implemented well.

The Intellectual capital model owned by TT is

incorporated in the financial statement account. For

structural capital, it includes the organizational

structure of the company, employee training,

financial statements. Customer Capital includes

customer data and work partner data. Human Capital

includes data on the number and salary of

employees. TT rarely has bank loans. They rely on

their own capital. TT requires relatively little capital.

Because in its activities, customers usually provide a

down payment of between 60% - 80% of the

contract value as a sign to use TT services.

Therefore, this business is very attractive and does

not require large capital.

5 CONCLUSIONS

In SMEs of tour and travel in Surabaya, the

intellectual capital especially human capital has the

most important role in maintaining the viability of

the company and encouraging competition in

business.

SMEs of tour and travel in Surabaya conducts

employee database for financial statements and uses

a reporting system for modern financial statements,

so that each transaction can be monitored at any time

through mobile phone.

Intellectual Capital Model in SMEâ

Zs Tour and Travel in Surabaya

877

REFERENCES

Astuti, Pratiwi Dwi, 2004. Hubungan Intellectual Capital

dan Business Pergormance. Tesis. Universitas

Diponegoro

Barney, J.B. 1991. “Firm Resources and Sustained

Competitive Advantage. Journal of Management”,

Vol. 17, No. 1, pp. 99-120.

Berrymen, Wal, 2000. “Penilaian Modal Intelektual”,

Media Akuntansi, No.7, Th.I. Maret 2000, pp.25

Bontis, N., Keow, W., and Richardson, S. 2000,

“Intellectual capital and the nature of business in

Malaysia”, Journal of Intellectual Capital, Vol. 1 No.

1, pp. 85-100

___, 2002, World Congress on Intellectual Capital

Readings, KMCI Butterworth-Heinemann Press,

Boston, MA.

BPS. Suarabaya, 2018. surabayakota.bpd.go.id,

https://surabayakota.bps.go.id/statictable/2018/01/11/5

73/banyaknya-kunjungan-wisatawan-mancanegara-

2008-2015.html data update 11 Jan 2018.

Brinker, Barry. 2000. “Intellectual Capital: Tomorrows

Asset, Today’s Challenge”,

http://www.cpavision.org/vision/wpaper05b.cfm

(Accessed April 2016)

Choo, C.W. and Bontis, N. (2002), The Strategic

Management of Intellectual Capital and

Organizational Knowledge, Oxford University Press,

New York, NY.

Cohen, S., and Kaimenakis, N. 2007. Intellectual Capital

and Corporate Performance in Knowledge Intensive

SMEs. Learning Organizations, 14(3).

Davenport, T., and Prusak, L. 1998. Working Knowledge:

How Organizations Manage what They Know.

Harvard Business School Press. Boston, MA

Desouza, K.C. and Awazu, Y. 2006. Knowledge

Management at SMEs: Five Peculiarities. Journal of

Knowledge Management, 10(1), pp. 32-43.

Diskopum Jatim.2017. http://diskopukm.jatimprov.go.id

Edvinsson, L. and Malone, M. (1997), Intellectual Capital:

Realising Your Company’s True Value by Finding its

Hidden Brainpower, HarperCollins, New York, NY.

Ekawati, Ratna. 2014. “Potret Human Capital Industri

Garmen Skala Kecil Menengah Di Jawa Barat”.

SMART–Study & Management Research | Vol XI, No.

2 – 2014.

Indriastuti, 2012. “Peningkatan Kinerja Ukm Dengan

Pengelolaan Intellectual Capital dan Inovasi”.

Proceedings of conference In Business, Accounting,

and Management (CBAM) 2012.

Iswati, Sri., and Anshori, Muslich. 2007. The Influence of

Intellectual Capital to Financial Performance at

Insurance Companies in Jakarta Stock Exchange

(JSE). Melbourne, Australia: Proceedings of the 13th

Asia Pacific Management Conference. pp. 1393-1399

___, Fanani, Z., Hariyanto, W., Hermawan, S., dan

Ernandi, H. 2013. The Models of Management and

Development of Intellectual Capital (Study of

Interpretive to Improve The Performance of Business

and Compete Exxelence of Pharmaceutical Industry).

Proceeding of Brawijaya International Conference on

Accounting and Business (BICAB).

Penrose ET. 1959. The Theory of the Growth of the Firm.

Oxford University Press: New York

Radar,

https://radar.jawapos.com/radarsurabaya/read/2018/02

/12/48474/bisnis-tour-and-travel-makin-dibutuhkan

Radar, Jawa Pos, Senin, 12 Feb 2018

Setiarso, Bambang. 2006. Knowledge Management dan

Intellectual Capital untuk Pemberdayaan UKM.

Prosiding Konferensi Teknologi Informasi &

Komunikasi untuk Indonesia, Institut Teknologi

Bandung, 3-4 Mei.

Stewart, T.A. 2000. “Intellectual Capital: The New Wealth

of Organizations”, London: Nicholas Brealey.

Sveiby, K.-E. 2010. Methods for measuring intangible

assets. Available at http://www.sveiby.com

Undang-Undang No. 20 Th 2008 Tentang Usaha Mikro,

Kecil dan Menengah

Wong, K.Y., & Aspinwall, E. 2004. Characterizing

Knowledge Management in the Small Business

Environment. Journal of Knowledge Management,

8(3), pp. 44-61

ICPS 2018 - 2nd International Conference Postgraduate School

878