While prior research examines how firms’ specific capabilities achieve organizational performance, few studies take a holistic perspective. In this study, we adopt a holistic model to examine how different capabilities actually account for organizational performance. We also consider how intellectual capital mediates the relationships between organizational capabilities and performance. We conducted a questionnaire survey involving 167 managers in the Taiwan Transportation Vehicle. Manufacturers Association (TVMA). Using the structural equation modelling (SEM) based on partial least squares (PLS), we find that market knowledge, relationship and innovative capabilities, have positive effects on intellectual capital, while customer knowledge capabilities have no significant effects. Intellectual capital partially mediates the relationships between organizational capabilities and organizational performance. We contribute to the literature on organizational capabilities, by demonstrating the mediating effects of intellectual capital on the relationships between organizational capability, both in its external and internal dimensions, and organizational performance, as well as suggest to firms aiming to enhance organizational performance, particularly those in the transportation industry.

Introduction

Survival in the complexity of today’s business environment demands multiple capabilities; such as those to handle market and customer knowledge and, relationship and innovation. While these static capabilities are important, dynamic capabilities are equally, if not more, important (Dyer & Singh, 1998; Garcia-Murillo & Annabi, 2002; Gummesson, 2002; Hooley, Greenley, Cadogan, & Fahy, 2004; Kianto, Ritala, Spender, & Vanhala, 2014; Roberts, Varki, & Brodie, 2003; Ramadan, Dahiyat, Bontis, & Al-Dalahmeh, 2017; Tamer Cavusgil, Calantone, & Zhao, 2003; Teece, Pisano, & Shuen, 1997; Wang, Wang, & Liang, 2014; Wang, Sharma, & Cao, 2016). Both static and dynamic capabilities are equally important in achieving organizational performance. The extant literature tends to look at the relationships between each specific capability, e.g., market and customer knowledge, relationship and innovation, and firms’ overall performance. This means that a holistic model of how these different types of capabilities influence firms’ performance is under-explored (Kianto et al., 2014; Ngah, Tai, & Bontis, 2016; Ramadan et al., 2017; Wang et al., 2014, 2016). This study addresses this gap by proposing an innovative model to examine how these capabilities influence organizational performance.