Organizational capability is everything the organization can do — on it’s own or  through its extended enterprise —  shared services, suppliers, alliances, partnerships, etc.   The organization’s capability is comprised of three core assets – physical capital (PC), including all tangible assets; technology capital (TC), including product technology, R&D, information technology and process technology; and human capital (HC), including employees and contract staff.  An asset, tangible or intangible, is any  productive means the organization materially controls that can be used to create value.  These three core assets are combined (by process technology) into production functions that are designed to take Inputs and produce valuable output – Throughput – which are the offerings designed to execute the positioning.  Since the assets in combination create the organization’s capability, then return on the asset investments of the enterprise (R) can be calculated: