1. Arab Academy for Science & Technology & Maritime Transport
College of Management & Technology
Cardiff Metropolitan University
MBA Program
Managing Intellectual Capital Project
Etisalat Misr
Prepared by: Dalia Hamed
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2. Index:
Purpose of the Project
3
Introduction about Etisalat Misr
3
Introduction about the Project
3
Value Creation Logic of Etisalat
4
Etisalat Resources Distinction Tree (RDT)
5
Etisalat Intellectual Capital Navigator (ICN)
9
Etisalat resource matrix
11
Future Value Creation Logic for Etisalat
13
Figures index
References
9
10
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3. Purpose of the Project:
The main purpose of the project is to verify the effect of intellectual capital on Etisalat
organizational performance, and how Etisalat applied the intellectual capital in practice in its
organization, since we see over the last 10 years a fast growing, interest in and understanding
of the role that intellectual capital resources play in the workings of all organizational forms.
We will see through the project how Etisalat define the intellectual capital, what is its value
creation logic. Also will see how they identify, prioritize, and evaluate the most important
resources necessary for their value creation efforts through studding Etisalat Resources
Distinction Tree (RDT).
Finally we will see how much Etisalat interests in reporting on all their value creating resources
including intellectual capital resources.
Introduction about Etisalat Misr:
Etisalat is one of the leading telecommunications’ corporations that catering to consumers,
businesses, international telecommunication, ISPs, content providers and mobile operators.
Since 1976, Etisalat has been at the forefront of the Middle East’s technological revolution and
over the last forty years, the company has developed and grown to become one of the world’s
leading telecommunications companies.
Etisalat operates in 18 countries across Asia, the Middle East and Africa, a coverage area which
reaches more than two billion people. To date, the group’s global subscriber base exceeds over
140 million subscribers through mobile and Landline voice and data services.
The operation was launched in Egypt in May 2007 as the first 3.5G operator. Etisalat’s entry to
the Egyptian market ushered in a new era for the telecom industry.
Etisalat’s entry brought to the market an array of competitive and innovative rate plans that
attracted one million subscribers in the first 50 days of operation. Today, Etisalat Misr’s 2G and
3G robust and high quality network covers and serves 99% of the population in Egypt.
Moreover, Etisalat Misr is the first and the only operator in Egypt that has an exclusive
international gateway and its customers enjoy competitive international rates to all destinations
around the globe. In order to complete Etisalat Misr’s product portfolio, two well-established
ISPs (Internet Service Providers) were acquired and provide broadband services to customers
while at home and while on the move.
Introduction about the Project:
As we see that after the dot.com boom happened in 1999, how the U.S. economy had been
changed and the growth happened for the number, type of business and importance of NasdaqPage 3 of 15

4. Listed Firms in the S&P 500 such as telecommunication, Information Technology & Consultation
companies. It became clear that it will be impossible to excel managerially if these companies
apply the same way of thinking & management that developed for the manufacturing companies
“before the boom”. This pushed these organizations to reappraise their mental models, their
assumptions, and their practical approaches to managing the organizations.
We see now a greater focus on services and intangibles than ever before; which requires much
more sophisticated management of issues such as processes, brands, IP, relationships and
competence. Today all companies are trying to improve their value by using new approaches
such as “Outsourcing” which is simply exchanging a physical resource owned by the
organization for a relational resource.
Etisalat as one of the leading telecommunications’ corporations over the world believe that the
responsibility of the valuation of organization, and for managing shareholder value became not
only the responsibility of the finance department, no, it became greater as much as the following
intangibles resources are also affect the firm value (not only the tangibles resources):
1- The Relational resources
2- The Organizational resources
3- The Human resources
Value Creation Logic of Etisalat Misr:
Basically Etisalat “as a telecommunication company” is linking customers, it is enabling direct
and indirect exchanges between customers separated by time and/or space, our economic
behavior is network economic marginal return, so this means that the value creation logic for
Etisalat is value network organization; which is dominated by relational and organizational
resources.
As a telecommunication organization, our Business Focuses are the services we provide to
our customer, our capacity to provide the services and services opportunity that we can provide
before the competitors.
Therefor our Competitive Focus is first the network coverage “the more we extend the
coverage the more we satisfy the current customers and the more we gain new customers”.
Second is our capacity utilization, how can we use the capacity we have in an efficient way in
order to reach the biggest network coverage for the area we targeted.
The main Resources we focus on are the platform we created and the process we built, and
these resources are always developed to produce the best services.
Because of the large number of customers we serve which reach around 15 million customers may be more - our Value Creation Logic is depending on the concurrent and layered set of
activities that required serving efficiently a random need for mediation services between these
large numbers of customers.
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5. We provide our services through our network promotions (Product Concepts), the management
for the different types of contracts with our customers also through creating a strong operation
for the network infrastructure that guaranty a professional level of service provisioning.
Our Common Value Creation Focus is on the network infrastructure development, Service
development, Procurement, Contract management and Human resource management.
The Role of Marketing is depend on grow the number of the subscribers and encourage the
subscribers to do more communications exchanges through our network.
Etisalat Resources Distinction Tree (RDT):
From my point of view as an employee work for Etisalat, I see the Etisalat depends more and
more on the intellectual capital resources as a value network organization, and this is what we
will see in our Resources Distinction Tree (RDT) below. And after I identified and mapped the
resources I judged their relative importance for the organization’s ongoing ability to create the
current organization value as the following:
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6. Figure 1: Etisalat weighted resource distinction tree – Initiative one
Etisalat Total Resources Portfolio
Level 0
100%
Level 1
Traditional Resources
Intellectual Capital Resources
22%
78%
Physical Resources
7%
Level 2
Monetary
Resources
15%
Relational
Resources
Cash
Platforms
8%
Human Resources
30%
18%
30%
Directly Business
Related
Level 3
Organizational Resources
Indirect
Business
Related
External
Oriented
IT
7%
Customers
Owners
Brand
7%
2%
2%
Internal
Oriented
Operating
systems
9%
Compentence
Specific
technicality
&
Knowledge
Attitude
Intellectual
Agility
Behavioral
traits
Ability to
innovate
3%
3%
Motivation
Ability to
adapt
4%
Partners
5%
Regulatory
bodies
Product
Concepts
Operating
procedures
Brain
Power-IQ
4%
5%
9%
2%
Internal
audit
processes
Ability to
bild
personal
networks
Channels to
Market
Local
government
8%
3%
5%
2%
2%
2%
Media
1%
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7. From my point of view, Etisalat as a value network company the most important resources that
contribute for the current value creation are the Relational & Organizational resources and that
is because of the following:
1- Our direct business relational resource with the customers, partners & channel of marketing
is one of the keys that contribute to our current value creation. I mean by the customers the
end user customers, those we are trying to satisfy them and most of the media message are
going directly to them, but still see that the contribution for the channel of marketing to the
current value creation is more than the end user customer and this is because of the nature
of the Egyptian market.
Our relationship with the Partners also is important to the organization, and I mean by the
partners here all suppliers and business partners like Huawei & Ericson.
2- For the Organizational resources, yes the platform “as a physical resource” presents the
physical network for Etisalat, but the most important here is the software inside the
machines, the operating systems and the processes that control and guaranteed the
efficiency of the operating system.
I made some interviews with our colleges to discuss their opinion regarding Etisalat RDT; I
found that each one has his point of view about the resources’ relative importance for the
organization’s ongoing ability to create the current organization value – Annex 1 –.
After these interviews, we analyzed the result and reached our new “current” RDT as the
following:
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8. Figure 2: Etisalat weighted resource distinction tree – The final
Etisalat Total Resources Portfolio
Level 0
100%
Traditional Resources
Intellectual Capital Resources
25%
Level 1
75%
Monetary
Resources
Physical Resources
5%
Level 2
25%
Relational
Resources
Cash
Platforms
15%
Human Resources
27%
15%
33%
Directly Business
Related
Level 3
Organizational Resources
IT
5%
Customers
8%
Indirect
Business
Related
Regulatory
bodies
3%
External
Oriented
Brand
1%
Internal
Oriented
Operating
systems
9%
Compentence
Specific
technicality
&
Knowledge
Attitude
Intellectual
Agility
Behavioral
traits
Ability to
innovate
2%
2%
Motivation
Ability to
adapt
3%
Partners
6%
Channels to
Market
8%
Local
government
Product
Concepts
Operating
procedures
Brain
Power-IQ
3%
6%
9%
2%
Internal
audit
processes
Ability to
bild personal
networks
2%
2%
Media
5%
2%
2%
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9. This new RDT is:
1- Presents the current RDT as a value network company.
2- Presents the first step after we convert it to serve as a basis for developing an
Intellectual Capital Navigator - ICN.
Latter will present the one we want to have as a steady state in the future.
Etisalat Intellectual Capital Navigator:
In order to answer the question of how does Etisalat management view resource deployment to
create value in the organization? We have to develop Etisalat Intellectual Capital Navigator
(ICN), which is a numeric and visual representation that answer the question above. This is a
mapping how resources influence each other, this Intellectual Capital Navigator “ICN” is
providing to Etisalat an overall map of the logic used by management when it comes to resource
deployment in a given organization.
We found that the Intellectual Capital Navigator for Level 2 resources is as the following:
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10. After we converted the current RDT to serve as a basis for developing an ICN by transforming
the weightings from weighting as a percentage of the node to absolute percentage weightings,
we took level 3 as the most detailed level and by asking the question of how relatively influential
is this transformation when it comes to contributing to the Etisalat value creation, we created
Etisalat resource matrix as the following:
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11. 0 25 20
5
10 10
0 25
25
10
10 10 0 10
10
5
0
10
40 10
20 30
10 0
10
5
20
0
10 15
20
40 10
0
10
10
30
20
0
30
50
20
0 10
30 20 20 10
10 0
30
30
20 10
10 30 20 30
10
5 5 5 5 5
10
20 10 20
10 5
20 20
10 20 10 20 20 10 10
30 10 20 5 5 10
20 10 20 5 5 10
40 10 40
10
10 10 30
20
5 10 5
5 15
30 20
20 10
15
20 20
5
20
Ability to adapt
Ability to innovate
Motivation
Behavioral traits
Ability to build personal networks
Brain Power-IQ
Specific technicality & Knowledge
Internal audit processes
Operating Procedures
Operating systems
Product Concepts
Brand
Media
Local Government
Reulatory bodies
Channels to Market
Partners
Customer
IT
Platforms
Cash
Cash
Platforms
IT
Customer
Partners
Channels to Market
Reulatory bodies
Local Government
Media
Brand
Product Concepts
Operating systems
Operating Procedures
Internal audit processes
Specific technicality & Knowledge
Brain Power-IQ
Ability to build personal networks
Behavioral traits
Motivation
Ability to innovate
Ability to adapt
∑
5
10
5
15
10
20
10
20
5
0 10
10 0
20 50 0 20
10 40 25 0
20
40 20
5
0
5
0
0
20
0 20
10 0 10 10
0
10 0
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Figure 3: Etisalat resource matrix from an advisory organization building on the Level 3 resources in the resource distinction tree
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12. 0.60
0.30
0.90
2.50
0.20
5.45
0.10
0.60
1.60
1.20
0.90
2.50
0.30
1.80
2.70
0.10
0.60
0.50
0.80
0.80
0.30
0.20
1.80
0.90
0.10
0.30
0.60
1.00
0.20
1.80
2.70
0.10
0.10
1.20
1.60
0.30
0.20
6.35
0.40
0.20
0.20
0.20
8.35
0.20
0.40
0.40
0.80
0.40
10.75
0.40
0.10
0.10
0.40
0.10
0.10
0.20
0.20
0.20
1.00
Ability to adapt
Ability to innovate
Motivation
Behavioral traits
Ability to build personal networks
0.25
0.50
0.40
0.90
0.80
0.60
0.30
0.60
0.05
0.60
0.15
0.40
0.20
0.60
0.40
0.80
0.60
15.40
0.25
3.00
1.00
0.05
0.90
1.80
0.20
0.10
0.60
Brain Power-IQ
1.60
0.25
Specific technicality & Knowledge
0.80
0.60
1.20
0.30
0.90
0.50
0.50
2.25
1.50
0.80
0.90
1.60
Internal audit processes
0.25
0.75
1.50
Operating Procedures
Local Government
0.50
3.20
Reulatory bodies
Channels to Market
Partners
0.50
1.80
0.10
0.30
0.40
Customer
IT
0.50
0.50
0.25
3.75
Operating systems
0.50
0.40
1.20
0.40
1.00
3.75
Product Concepts
1.25
Brand
Cash
Platforms
IT
Customer
Partners
Channels to Market
Reulatory bodies
Local Government
Media
Brand
Product Concepts
Operating systems
Operating Procedures
Internal audit processes
Specific technicality & Knowledge
Brain Power-IQ
Ability to build personal networks
Behavioral traits
Motivation
Ability to innovate
Ability to adapt
Media
5.00
15.00
5.00
8.00
6.00
8.00
3.00
3.00
5.00
1.00
6.00
9.00
9.00
2.00
3.00
2.00
2.00
2.00
2.00
2.00
2.00
100
Platforms
Cash
We converted the matrix from row-based weighting to a total weighted picture of the transformation, which led to build Etisalat
normalized and cleaned transformation matrix
4.50
0.80
0.60
0.80
1.80
0.50
0.15
0.40
0.20
0.40
0.20
0.20
0.20
0.20
0.40
0.20
0.20
2.20
0.60
6.70
5.95
8.15
0.40
15.55
2.15
1.80
3.65
0.65
2.30
0.20
0.70
Figure 4: Etisalat normalized and cleaned transformation matrix
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5.00
15.00
5.00
8.00
6.00
8.00
3.00
3.00
5.00
1.00
6.00
9.00
9.00
2.00
3.00
2.00
2.00
2.00
2.00
2.00
2.00
100

13. By this matrix we identified our the areas need enhancement in the future by using the color
code based on increasing cumulative influence on value creation, so we found that in the future
we will have a need for enhancing the transformation between Operating System Operation
procedures in order to maximize this transformation influential when it comes to contributing to
the organization’s value creation.
Future Value Creation Logic for Etisalat:
The logic that I see it not exist in our organization and it might add a value creation process in
our organization is the Value Shop logic.
As a telecommunication organization we have created solutions to communicate directly with
our customers through our CRM & CC teams, these solutions are continually developed to
support the business to know more and more our customers and our potential customers about
their needs, their satisfaction level, also to update the customers about our new offers, products,
promotion, etc.
I couldn’t say that we are mix of pure value creation logics (value networks & value shops), that
is because we currently do the role of value shop internally “only for our organization”, and use it
as a tool to have connections with our customers.
But if we develop these solutions to be a new line of business “B-to-B”, it will deliver to these
business line customers a solution for their needs “problems” that do a change from an existing
to a more desired state.
We have the knowhow, the management, the process and the infrastructure for the CRM and
CC management, so we can produce these solutions as a consultation services that serve a
new line of business.
Currently the resources are available but it might need for some development as the following
(depends on the business volume and needs):
1- More and attention, focus and develop the human resources
2- Developing the infrastructure “applications and the software”
3- Developing the process.
I see that adding another value logic to our organization such the value shop logic this will not
only serve the new line of business “consultation business” but also will add more benefits for
the pure organization value logic “value network”.
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14. Figures Index
Figure 1: Etisalat weighted resource distinction tree – Initiative one
6
Figure 2: Etisalat weighted resource distinction tree – The final
7
Figure 3: Etisalat Intellectual Capital Navigator for Level 2 resources
10
Figure 3: Etisalat resource matrix from an advisory organization building on the Level
3 resources in the resource distinction tree
11
Figure 4: Etisalat normalized and cleaned transformation matrix
12
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15. References:
1- Book - Managing Intellectual Capital in Practice by Göran Roos, Stephen Pike, Lisa
Fernstrom
2- Study - Intellectual Capital: A Human Resources Perspective , Charles P. Leo, Ph.D.,
Practitioner Faculty at the Graziadio School of Business and Management, Pepperdine
University, USA. Sid Adelman, Principal, Adelman & Associates, USA.
http://www.jgbm.org/page/23%20%20Dr.%20Charles%20P.%20Leo%20.pdf
3- Article - To Verify How Intellectual Capital Affects Organizational, Mei-Fen Wu,
Department of Business Management, Takming University of Science and Technology,
Taiwan, Yu-Je Lee, Department of Marketing Management, Takming University of
Science and Technology, Taiwan, & Gao-Liang Wang, Department of Marketing
Management, Takming University of Science and Technology, Taiwan.
http://www.jgbm.org/page/4%20Yu-Je%20Lee%20V8-1.pdf
4- Study – Intellectual Capital, What is it and Why does it matter, by Prof. Göran Roos
http://www.ipd.gov.hk/eng/pub_press/press_releases/20091029/WIPO/Introduction_Gor
an_Roos.pdf
5- Study - Intellectual Capital Measurement Methods – by Jolanta Jurczak, MSc., eng Ph.D. student at Warsaw University of Technology, Faculty of Production Engineering.
http://www.orgmasz.pl/wydawnictwo/files/Intellectual.pdf
6- INTELLECTUAL CAPITAL AND ITS MEASUREMENT, By David H. Luthy, Professor of
Accounting - College of Business, Utah State University, Logan, Utah USA
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.200.5655&rep=rep1&type=pdf
7- Interviews with different persons from different department in Etisalat – attached.
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