Strategic management is associated with leveraging the strengths of an enterprise and to cash on the opportunities by overcoming the weaknesses and threats. Realization of the competencies of an enterprise would enable it to establish a competitive edge over its rivals. Since intellectual capital refers to the combined intangible capital which enables the company to function, it is critical for strategic management in knowledge-based industries. In the knowledge-based economy, numerous corporate organizations have utilized intellectual capital as their competitive advantage to create corporate value. The key issue in leveraging intellectual capital, as strategic tool for the business success, lies in the measurement of intellectual capital.

As the adage goes, "what can be measured can be managed and what can be managed can be measured." Therefore, measurement of intellectual capital is a precondition for the `strategic management' of intellectual capital. In this paper, an attempt is made to measure the value of intellectual capital in monetary terms, using the well-established indirect methods. The strength of these methods lies in their ability to utilize publicly available information about the firms. The primary objective of the study is to suggest the availability and reliability of the financial methods for the measurement of intellectual capital of the publicly traded companies, by analyzing the case of the Indian pharmaceutical companies.

Innovation is the essence of human endeavor. Since the Stone Age, human beings have been the only creatures on earth who have effectively utilized their intellectual faculty to improve their standard of living through invention and innovation. Innovation is vital for survival and growth and is achieved through investment in intellectual capital. The old economy, as it is referred to, constitute industries that were mainly dependent on visible physical capital. The new economy or the knowledge economy constitute industries that are knowledge-based and knowledge-driven. The rise of the knowledge-based economy has focused the need to reassess the key drivers of economic growth and development. Growth in knowledge economy is contingent upon the capability of a country or a company to adopt or embrace new technologies, techniques, ideas and processes. Traditionally, land, labor and capital were considered to be the most valuable factors of production in economics, whereas in the knowledge economy, intellectual capital eclipses these traditional factors.

The rapid expansion of science and technology established the formal process for innovation, which altered the pattern and structure of production systems. The process of free trade further expanded the diffusion of knowledge, thereby paving way for the establishment of production systems, where knowledge plays an important role. Thus, intellectual capital emerges as a prominent resource in knowledge-based economy. In fact, many companies rely almost completely on their intellectual capital for generating revenues. Intellectual property, an important component of intellectual capital, describes the ideas, inventions, technologies, artworks, music and literature that were intangible when first created, but have become valuable in tangible form as products. In other words, intellectual property is the commercial application of imaginative thought to solve a technical or artistic challenge. Intellectual property is not the product itself, but the special idea behind it, the way the idea is expressed, and the distinctive way it is named and described. Intellectual Property Rights (IPR) legally protect the interests of creators by giving them proprietary rights over their creation, and therefore, enjoy a unique status in the portfolio of corporate capital. Therefore, intellectual property is considered to be the most invaluable of capitals, when compared to movable or immovable property, in knowledge-based industries. Intellectual capital is the manifestation of the collective knowledge, ideas, innovation and wisdom of a company's employees. Companies that recognize the value of intellectual capital have revolutionized the way their businesses are operated.

Knowledge Management Journal, Intellectual Capital, Strategic Management, Corporate Organizations, Intellectual Property Rights, IPR, Indian Pharmaceutical Companies, Commercial Applications, Intellectual Assets, Organizational Capital, Financial Systems, Business Collaborations, Information Technology Systems, Decision Making Process.