Abstract

     This study aims at investigating the mediating impact of business intelligence, innovation speed and innovation quality on the relationship between the different components of intellectual capital and competitive advantage in the context of Jordanian companies. To achieve this, the study developed a theoretical framework that depicts the mediation through data that were collected randomly, from the pharmaceutical and medical supplies companies, with a total sample of 569 participants. Data were analyzed using structural equation modeling, SEM (CB-SEM), for model fit and Process software for path analysis to estimate the different indirect effects. The findings provide evidence that all mediators serve differently as important mediating mechanisms between the different components of intellectual capital and competitive advantage. Overall, the results of this study show and clarify the mediating mechanism of business intelligence, innovation speed and innovation quality, as mediators through which human capital, structural capital and relational capital improve competitive advantage in the context of Jordanian companies.

Introduction

     In the field of business, knowledge has become very important in the success of organizations and their contribution to transformation into a knowledge economy, where most of knowledge is implicit and is available in the minds of individuals, and depends on their intuition, intellectual experience and skills. It is also available in the form of meaningful information about the market, the beneficiary, communications and technology. In fact, knowledge can be measured and plays a crucial role in achieving competitive advantage [1]. Competitive advantage is defined as a distinct skill, technology or resource that enables the organization to provide a service, commodity or benefits distinct from what competitors provide within the same sector, which confirms the distinction and difference of the organization from its competitors from the point of view of customers [2]. However, Dynamic Capabilities, sustainable competitive advantage, innovations and market responsiveness are all sources of competitive advantage. Dynamic Capabilities are the organizational and strategic routines by which firms achieve new resource configurations as markets emerge, collide, split, evolve and die [3]. An innovation is defined as an idea, a product or process, or a system that is perceived to be new to an individual [4]. Sustainable competitive advantage is defined as a strategy that cannot be easily imitated by the competitors of the resources owned and used by a company and thus creates value [5]. Market responsiveness describes how timely the organization is in responding to market changes [6]. In light of this, the methods of developing performance in organizations have changed, after they were focused on the organizational or material side of the administrative process, which was losing its spirit or human nature, and leading to a feeling of frustration for workers and beneficiaries. These methods became focused on the human aspect of the administrative process in its practical sense, including the elements of effective leadership, empowering workers and attention to intellectual capital [7].

Discussion, Conclusions and Recommendations

     Based on the results obtained, the study found that the impact of structural capital on competitive advantage via the mediation of business intelligence is insignificant, and the impact of relational capital on competitive advantage via the mediation of business intelligence is negatively significant, while the impact of human capital on competitive advantage via the mediation of business intelligence is positively significant. These findings together prove the existence of the mediation effect of business intelligence. This role of business intelligence is supported by [25], who showed that the various types of business intelligence are used for competitive advantage. In addition, business intelligence is involved in various other relations linked to competitive advantage as shown by [6]. However, in the current study, this is only clearly shown between human capital and competitive advantage. This result clarifies the mediating mechanism of business intelligence through which human capital improves competitive advantage in the pharmaceutical and medical supply companies in the Jordanian context. This means that pharmaceutical and medical supply companies in Jordan are effectively taking advantage of business intelligence by which human capital improves competitive advantage

     Having said this, the insignificant impact of structural capital and the negative impact of relational capital on competitive advantage through business intelligence could be attributed to either a low level of both structural and relational capital or the absence of such effect at all. These findings indicate that merely emphasizing structural capital and relational capital may not guarantee the expected competitive advantage. However, as none of the researchers have examined such mediation of the business intelligence relationship, especially at the individual level of the different components of intellectual capital, our findings can be partially supported by [6,25,33,42–44] only in the impact of Business intelligence on competitive advantage.

Abstract

1. Introduction

2. Background

3. Theoretical literature review

4. Empirical literature review and hypotheses development

5. Research design

6. Empirical results and discussion

7. Summary and conclusion

Research involving human participants and/or animals

Authors’ contribution

Data availability statement

References

Abstract

     Market capitalization and intellectual capital can be understood as two main that can play a dynamic role in multiple organizational decisions. Given that, the current study examines the role of market capitalization and intellectual capital in determining corporate investment decisions. In our empirical analysis, we use 10 years of financial information, from 2010 to 2019, for nonfinancial publicly listed corporations in three economies: China, India, and Pakistan. In our regression estimation, this study employs the panel-EGLS (estimated generalized least squares) and two-step system generalized method of moments techniques to address the problems of heteroskedasticity and endogeneity. The statistical analysis first reveals the positive significant effect of market capitalization on investment decisions because of the availability of sufficient funds for investment. It then substantiates the significant role of human capital, structural capital, and capital employed efficiency in protecting industrial investment. The empirical findings offer policy implications on how market capitalization (MC) and intellectual capital (IC) promote investment decisions.

Introduction

     Because of the high probability of investment failure, firms require strong motivation to invest in long-term projects (Cholakova & Clarysse, 2015). Firm managers derive this motivation from different factors, including financial and nonfinancial factors. These factors reduce the systemic risk of investment and lead to substantially more investment (Chaney et al., 2012). Among others, the volume of market capitalization by firms is a vital financial factor that allows them to deliberately make some investments (Armstrong & Vashishtha, 2012). Similarly, firms that are rich in intellectual capital can make more investment because they have fewer problems with information asymmetry, maximum investment efficiency, and production cost efficiency (Oppong & Pattanayak, 2019). This description eventually led to maximum investment for obtaining physical assets in the form of property, plant, and equipment (PPE), commonly called capital investment. Recognizing the importance of market capitalization and intellectual capital in the intensification of industrial investment, this study tries to answer the following research questions:

•Does market capitalization boost the investment confidence of corporate managers?

•How does intellectual capital promote managerial confidence in capital investment?

Summary and conclusion

     Firms with a high market share and more intellectual capital are more likely than other firms to employ dynamic investment strategies. These two kinds of assets—tangible (market capitalization) and intangible (intellectual capital) assets—on the balance sheets of a company can augment physical investment. Given that, our study determines the impact of market capitalization and intellectual capital on corporate decisions regarding physical investment. The empirical analysis is based on ten years of annual data on nonfinancial publicly listed firms in China, India, and Pakistan. The statistical results of panel-EGLS and system-GMM models reveal the significant and positive impact of market capitalization on industrial investment. Firms with a higher market share are more confident about physical investment because they have larger financial reserves and the capacity to withstand financial shocks. The empirical analysis then implies the positive role of all three components of intellectual capital—HCE, SCE, and capital employed efficiency—in determining industrial investment. These factors enable an enterprise to confidently engage in investment because of the availability of knowledge workers, efficiency in internal business operations, and maximum utilization capacity of their internal resources. These factors might reduce investment inefficiency and enable firms to expand the volume of investment. In summary, the empirical results confirm all the hypotheses proposed (H1, H2a, H2b, H2c), and the objective of the research is achieved. The empirical findings are consistent even after heteroskedasticity and endogeneity issues are addressed, and several firm-level and country-specific variables are controlled for.

Abstract

Keywords

JEL classification

1. Introduction

2. Theoretical framework

3. Research methodology

4. Results and discussion

5. Conclusion and implications

Appendix A. Supplementary data

Conflict of interest

References

Abstract

This paper examines the effect of corporate social responsibility on firm performance by accounting for the role of Intellectual capital efficiency as a mechanism underlying Corporate Social Responsibility (CSR)– firm performance association. In this study, we consider 2132 US companies and develop a structural model for CSR, Intellectual Capital (IC), and firm performance while contemplating endogeneity issues in analyses over the period of 2009–2018. The value-added intellectual capital co-efficient is employed as a proxy measure for IC performance, taking into consideration corporate performance and governance measures. The findings suggest that CSR has a significant effect on firm performance. In particular, the findings reveal that CSR has a link with IC, indirectly affecting a firm performance, and the association between CSR and firm performance is partially mediated by Intellectual capital efficiency.

1. Introduction

Increased globalization and the emergence of knowledge-based economies revolutionized the meaning of Corporate Social Responsibility (CSR) via altering the basic philosophy of society and businesses. CSR practices drive contemporary businesses to contemplate social along with the economic aspects. Thus, a modern enterprise deems both economic and social aspects imperative during decision-making (Sarkar, 2005). Enterprises participate in CSR activities to overcome agency problems thus generating relatitnal assets and moral capital consequently boosting a firm’s performance. When firms engage in CSR activities, several benefits are achieved which include reduced employees’ turnover rates, increased employees’ commitment, increased satisfaction level of customers and enhanced customer loyalty consequently, all of which improve a firm’s reputation (Rehman, Baloch, & Sethi, 2015).

This new route for an enterprise is guided by CSR-forced modern corporate entities to implement practices that are in line with stakeholders’ perceptions and expectations. Consequently, the nexus between enterprises and society transformed the roles and responsibilities of businesses in society. The inclusion of societal aspects in enterprise decision-making is not without challenges and is imperiled by a trade-off between the cost and benefits for a business. On the contrary, Porter and Kramer (2006) view CSR facets as a competitive advantage rather than a cost or constraint if they are incorporated into the strategic framework of an enterprise.

1- Introduction

2- Methodology

3- Research findings: insights and critique

4- Discussions and implications

5- Technology policy and IC for sustainable development: a future research agenda

6- Conclusion and limitations

References

Abstract

This paper aims to provide a Structured Literature Review (SLR) about the strategic role of Intellectual Capital (IC) for achieving Sustainable Development Goals (SDGs). It offers an outline of past and present literature and frames a future research agenda. It analyses papers published in journals from 2003 – 2018 with the aim of deriving significant insights about IC’s determinants for achieving SDGs. Although empirical and theoretical studies have shown a positive relationship between IC and sustainability, the research remains an emerging area of growing importance. Although no explicit specialisation in the topic currently exists, findings highlight the “sustainability imperative” and convergence toward the following research areas: IC components for Sustainable Development in Private Sector, IC for Sustainable Regional Development in the Knowledge Economy, and IC for Sustainable Development in the Public Sector. Discussions indicate that some SDGs are starting to be explored more than others (e.g., quality education, infrastructure, health, cities and communities) and that only recently some studies are specialising specifically in the importance of technology to address the SDGs. Implications for technology policy have been highlighted to frame a future research agenda for academics and practitioners.

Introduction

The topic of sustainability and sustainable development has recently gained importance on the agenda of academics and practitioners. This is due to the relevance and dissemination of the report published by the UN World Commission on Environment and Development, known as the Brundtland Report (Brundtland, 1987). An accepted definition identifies its three main pillars: economic, social, and environmental sustainability (Wasiluk, 2013, p. 103). The topic of sustainability also gained more attention due to the 2015 launch of the United Nations ‘Sustainable Development Goals (SDGs)’ 2030 agenda. It consisted of global and universal indicators for international cooperation as well as for the collaboration of civil society, governments, multilateral institutions and the private sector (Nam, 2015). The Sustainable development framework includes 17 SDGs that embrace a wide range of environmental, social and economic issues, including climate change, energy, biodiversity, food supply and security, sustainable production and consumption, healthcare, education, gender, equality, peace and economic growth (Gupta and Vegelin, 2016). The goal of sustainable development is to find the effective solutions for some complex challenges and issues such as energy, climate change, pollution, migration, ecosystem resilience, food security and many others that require a cross disciplinary perspective (Suciu and Nàsulea, 2019, page 73; Birtchnell et al., 2017). Within this debate, some scholars began to consider Intellectual Capital (IC) an important link between support needs and development needs to fulfil the SDGs (Suciu and Nàsulea, 2019; Massaro et al., 2018). Several studies argue that IC is the most powerful economic production engine and the most important driver of smart, sustainable, inclusive, economic and social development (Matos et al., 2017; Suciu and Nasulea, 2019).

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.

This study examined the relationship between green intellectual capital and sustainable performance. While many studies have focused on sustainability, this study is one of the first that focuses exclusively on green intellectual capital. This research used survey data from 112 manufacturing firms in Malaysia. As anticipated, the results found that green intellectual capital positively influenced economic, environmental, and social performance. The findings of this study have various implications for green companies and organizations in general and green manufacturing firms in particular. The novelty of this study is unfolding the contribution of green intellectual capital as an intangible resource for organizations in achieving sustainable performance and a competitive advantage for future researchers. Manufacturing industries of developing or developed countries can enhance their cleaner production capabilities by incorporating this model as a strategy.

Introduction

In the past, businesses considered the natural world as a free and limitless good. This attitude led to the “tragedy of the commons,” in which individuals and companies believed that their use of the commons had only a negligible effect on the environment. The result of this situation has been pollution and resource depletion (Shaw et al., 2016). With increasing environmental issues being reported, businesses need to adhere to their environmental and natural protection responsibilities. These phenomena have introduced the concept of sustainable performance in which the economic performance of a business is no longer regarded as the only goal to achieve as much emphasis has been placed on achieving social and environmental objectives (Bombiak & Marciniuk-Kluska, 2018). In line with the cleaner production practices, recent research has shown that sustainable performance has gained heightened attention, and research has begun mainly focusing on the relationship with green human resource management (HRM) (Zaid et al., 2018), green supply chain management (Yildiz Çankaya & Sezen, 2019), and sustainable manufacturing practices (Abdul-Rashid et al., 2017). In addition to this, Severo, de Guimarães, Dorion, and Nodari (2015) asserted that using methodologies for cleaner production organizations can reduce environmental impacts.

1- Introduction

2- Literature review and development of hypotheses

3.- Data description and methodology

4- Methodology and model construction

5- Results and analysis

6- Conclusion

References

Abstract

In this current knowledge-based economy, firms’ productivity and competitive advantage are no longer based on physical and financial assets but on intangible assets. This has compelled knowledge-intensive firms to look for a more reliable source for higher productivity and competitive advantage by focusing on their intellectual capital, which cannot be easily imitated. As banks are classified as knowledge intensive, this study examines investment in intellectual capital by banks and examines how it has improved bank productivity measured in terms of asset turnover (ATO) and employee productivity (EP). Using a panel of 73 commercial banks in India for a 12-year period (2006e2017), the study found that some components of intellectual capital improves productivity, and others do not.

Introduction

In recent years, global banking has been transformed by knowledge as a source of wealth, compared to other tangible and physical assets (Bontis, 1998). Knowledge has become the new engine driving organizations’ wealth, and the World Bank (1999) stated that “knowledge is our most powerful engine of production.” Banks as service firms have been classified as a knowledgeintensive sector (Branco, Delgado, Sousa, & Sa, 2011), and studies explore the relevance of knowledge to bank performance (Edvinsson & Malone, 1997; Firer & Mitchell Williams, 2003; Kamath, 2015). This makes the recognition and development of knowledge management (intangible asset) an important aspect of bank management. Originally, the entire operations of banks depended on creativity, offering edge products and providing unique services in creating competitive advantage. Therefore, Chen, Cheng, and Hwang (2005) stated that banks are sources of economic value, and higher productivity comes from their intellectual capital (IC). This phenomenon has made the concept of IC popular in the current era of knowledge economies, building on the knowledge-based theory (KBV) of a firm. Barney (1991) considered these intellectual assets resources that can be physical capital, organizational capital, and human capital resources. Additionally, the resources are exactly what Pulic (1998) referred to as the components of IC that form the valueadded intellectual coefficient (VAIC) model. This model is useful in evaluating IC and in distinct features of organizations (El-Bannany, 2008).

Few articles have focused on the green aspect of intellectual capital namely green intellectual capital. Nowadays, due to increasing concerns regarding environmental issues, it is essential to investigate the effects of green intellectual capital on organisational sustainability. Hence, this study examines the linkage between the dimensions of green intellectual capital (green human capital, green structural capital, and green relational capital) and business sustainability. Data were gathered from 168 manufacturing small medium enterprises (SMEs) in Malaysia, and analysed using the Partial Least Squares approach. The results show that green structural capital and green relational capital have positive relationship with business sustainability, while green human capital did not. Finally, the implications and limitations of this study were discussed and the recommendations for future studies presented.

Introduction

Sustainability has become a topic of interest for both academics and practitioners. A wide discussions and debates about the concept of sustainability, its important and the way to achieve it are pervasive. The economic profits of business activities have increased prosperity and living conditions globally; however it leads to environmental destruction and social inequality directly and indirectly (Sullivan et al., 2018). Current research by Gong et al. (2018) showed that many environmental destructions occurred and an estimated 60% of the ecosystems worldwide have been degraded. If nothing is done to solve this, environmental problems will continue to increase and it will worsen. However, most of the organisations claim that these environmental corruptions are not caused by their business activities and see it as the issue to be ignored. Besides that, not all organisations were up on the idea of sustainability. In fact, business landscapes are now different than before with limitation of resources, increasing rates in technology, emerging markets and new business models disruptions for conventional method (Sullivan et al., 2018). The term sustainability was first applied to in dealing with natural environment degradation and its negative impact on human health, social well-being and economic growth. The definition from World Commission on Environment and Development (WCED, 1987) points out that sustainability is the “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs” which commonly and widely used in literature and can be applied to these three composite outcomes namely economic, social and environmental.

Although previous literature has examined the relationship between workplace fun and work engagement, the construct of psychological capital is introduced in the context of tourism and hospitality to investigate the mediating and moderating roles in this relationship. This research aimed to discuss the effect of workplace fun on psychological capital and further examine psychological capital’s mediating and moderating effects between workplace fun and work engagement. The survey data were taken from 331 front-line employees in customer service-oriented tourism and hospitality enterprises in Taiwan. The results showed that workplace fun has a significant positive effect on psychological capital. In addition, psychological capital plays a partial mediating role between workplace fun and work engagement. Moreover, psychological capital has a significant moderating effect between workplace fun and work engagement, namely, psychological capital can help to strengthen the relationship between workplace fun and work engagement. The implications and suggestions are discussed for tourism and hospitality operators.

Introduction

Nowadays, competition in the tourism and hospitality industry is fierce. In order to gain a competitive advantage, the issue of how to attract and retain high-quality employees has become a major issue faced by various tourism and hospitality organizations. An interesting working environment will have a positive atmosphere that can attract and retain employees for organizations (Chan, 2010). The issue of workplace fun has attracted the attention of industry and academic fields in recent years. Lamm and Meek (2009) argued that workplace fun as interesting, sociable, interpersonal, and recreational tasks and these activities that create an interesting working environment. Moreover, a work environment with fun is one of the factors that distinguish superior performers from others (Chan et al., 2000; Joyce, 2003). Workplace fun has a deep effect on organizations and employees (Owler et al., 2010). From the perspective of organizations, workplace fun is conductive to improving several organizational benefits, including elasticity, competitive advantage and increasing work passion (Fleming, 2005; Karl et al., 2005), good customer service (Karl and Peluchette, 2006), innovation (Bolman and Deal, 2000), empowerment (Baughman, 2001; Bolman and Deal, 2000), creativity (Bolman and Deal, 2000; Deal and Kennedy, 1999), and productivity (Costea et al., 2005; Karl et al., 2005). Moreover, from the employee perspective, an interesting working environment is the main reason to enhance employee’s motive and productivity (Deal and Kennedy, 1982). Workplace fun is conductive to improving job satisfaction (Karl and Peluchette, 2006), organizational commitment (McDowell, 2004), energy (Tews et al., 2012), organizational citizenship behavior (McDowell, 2004), job performance (Zani et al., 2017), and employee well-being (Owler et al., 2010; Tews et al., 2017), and it can also relieve employees’ anger (Tews et al., 2012), emotional exhaustion (Karl et al., 2007), work pressure (Karl et al., 2005), and turnover intention (Tews et al., 2014).

Introduction

The literature has recognized the critical role of knowledge and, thus, intellectual capital (IC) in the enhancement of firms’ strategy (Eisenhardt and Santos, 2002; Marr and Roos, 2005; Sveiby, 2001) and competitiveness (Grant, 1996). IC generally includes human, structural and relational capital (Meritum, 2002; Roos, 2005). Examining IC components, human resources contribute to organizational innovation through individual creativity (Amabile, 1988) which is dependent on domain-specific skills, creativity skills, an individual’s intrinsic motivation and conditions of social environment (Amabile, 2012). Amabile (1988) stated that domain-relevant skills represent the “individual ‘raw materials’ for creative productivity” ( p. 131), and include basic knowledge and technical skills in a given domain (e.g. expertise), while creativity-relevant skills represent a “cognitive style favorable to taking new perspectives on problems, an application of heuristics for the exploration of new cognitive pathways, and a working style conducive to persistent, energetic pursuit of one’s work” ( p. 131) (e.g. flexibility, social skills, risk orientation). Domain-relevant skills can be innate or acquired by formal and informal training in the domain; creativity-relevant skills depend on experience and training (Amabile, 1988). Transformations of IC, by way of the interaction of assets, as in the case of human capital nto new products and services (Edvinsson and Sullivan, 1996) are the main source of value creation (Peppard and Rylander, 2001). In agriculture as well as in other firms, the role of innovation has been discussed as pivotal (Edvinsson and Sullivan, 1996) to face the increasing uncertainty of the operating environment (Boehlje et al., 1995; Diederen et al., 2002; Boehlje et al., 2011) and to allow its economic survival (Nieuwenhuis, 2002) through competitiveness (Subramaniam and Youndt, 2005). Despite this, evidence of the value provided by the interaction of different assets for strategical innovation in agricultural firms represents an under-investigated field; the majority of studies mainly address the effect of IC on farm businesses’ productivity and financial performance (see e.g. Scafarto et al., 2016; Lee and Mohammed, 2014). Moreover, there are few studies on the development of the human capital component of IC as a relevant asset (Hitt and Ireland, 2002) for innovation in the agricultural sector and these are mainly linked to training/ schooling levels of farming operators, experience and social networking activities (see e.g. Huffman, 2001). The current literature on human capital (and of course IC) in agriculture also presents gaps concerning the strategical determination and assessment of competences needed to support the competitive advantage (Kozera, 2011). However, accounting studies on IC have been focused on the role of IC-based accounting techniques to improve management and reporting (Guthrie et al., 2012; Mouritsen et al., 2001). To this end, scholars have recently called for investigations into the contribution of IC resources to organizational strategy and performance (Lev, 2014; Vagnoni and Oppi, 2015), including sustainability (Cavicchi and Vagnoni, 2017) and value creation (Roos, 2005; Peppard and Rylander, 2001), focusing on the interconnectedness among the different categories of assets (Marr et al., 2004; Habersam and Piber, 2003). Moreover, the interconnectedness of different IC assets should be studied focusing on how business activities transform IC and how this process can affect value creation (Cuganesan, 2005) or negatively impact on it (Cavicchi, 2017).

Although the effects of intellectual capital on an organization’s competitive advantage are well documented, the mechanisms that explain those effects remain unclear. We propose that intellectual capital is associated with the way problems are identified, which is concerned with enhancing competitive advantage. The results of our study support a structural model whereby the indirect effects of intellectual capital on a hotel’s competitive advantage are determined through the mechanisms of problem identification. Additional analyses reveal that customer capital is related to structural capital, which predicts the hotel’s human capital. Furthermore, the process-oriented view indicates that innovative ability mediates the effects of ability capital on competitive performance.

Introduction

The combination of global trends and a highly competitive business environment has led to the increased importance of creating and maintaining a competitive advantage in the tourism and hospitality industry (Casanueva et al., 2015; Liu and Gan, 2015; Molina-Azorín et al., 2015; Preble et al., 2000). To cope with the dynamic environment and changing customer needs, hospitality organizations must be able to identify and exploit both their internal and external capital and to strengthen their capabilities (Paek et al., 2015). Intellectual capital refers to value of the firm’s knowledge base and service capabilities, which is the most efficient, albeit challenging, vehicle for internalizing organizational competency, and is a critical attribute of factors that drive hotel profitability and performance (Enz et al., 2006a,b). However, to date, few studies have addressed the role of intellectual capital in the context of competitive advantage and performance within the hospitality industry setting (Enz et al., 2006a,b; Rudež and Mihalič, 2007). In addition, due to the increasing importance of creating and sustaining a competitive advantage, prior hospitality studies have focused on empirical examinations of the effects of intellectual capital on social network analyses (Hu and Racherla, 2008), knowledge management (Hallin and Marnburg, 2008) and financial performance (Enz et al., 2006a,b; Rudež and Mihalič, 2007). Considerably less literature has addressed intellectual capital as the process by which competitive advantage is achieved (Chen, 2008). Along with a lesser focus on competitive advantage process engagement, the research on intellectual capital has tended to focus almost exclusively on the different constructs of competitive advantage requirements rather than on the financial performance and overall performance. This narrow stance has thus given rise to the question of how the competitive advantage process engagement interfaces with the broader considerations that tend to be part of an organization’s environmental attributes, which include strong intellectual capital components. Drawing on the intellectual capital theory, we further develop this perspective by arguing that intellectual capital is most beneficial to competitive advantage when such engagement is associated with its own problem identification capability. The current study fills gaps in the hospitality literature by developing an integrated process to analyze how hotels may create competitive advantages through text analytics. It allows the resource allocators or policy makers within a focal hotel to identify the critical attribute of intellectual capital and to better understand the internal and external atmosphere of the focal hotel and the industrial environment. More importantly, we make several other contributions.

Innovation seems to be a fundamental requirement for the growth and sustainability of small businesses. While previous research revealed a strong correlation between intellectual capital and performance, the role of intellectual capital in facilitating the innovativeness and performance of a firm has not been thoroughly examined in the small and medium-sized enterprise (SME) context. This study examines the role of innovativeness in the intellectual capital and organizational performance relationship using a sample of small firms. The results of a survey conducted on 460 small business owners indicate a positive relationship between two components of intellectual capital, human capital and organizational capital, and organizational performance. Further analysis finds that innovativeness partially mediates the relationship between intellectual capital and organizational performance. Our findings indicate that efficiently and effectively organized firms can leverage well skilled and innovative employees to achieve the best performance through innovation.

Introduction

Small and medium-sized enterprises (SMEs) must often be creative and diligent in establishing, solidifying, and defending strategies for sustained competitive advantage, given the difficulties in realizing gains from economies of scale (Patel & Jayaram, 2014; Wales, Patel, Parida, & Kreiser, 2013). Researchers argue that the development and deployment of knowledge-based resources are critically important tools for firms to garner a sustained competitive advantage and greater profitability (Cohen & Levinthal, 1990; Grant, 1996a, 1996b; Kogut & Zander, 1992). In particular, these intangible resources have been shown to be more important than tangible assets in the early stages of new venture development (Lichtenstein & Brush, 2001). Entrepreneurs and small business owners have been consistently coached to focus on the novelty of their offerings compared to their often larger competitors, as well as to utilize their firm-specific knowledge to establish processes and routines that make them nimble (Rosenbusch, Brinckmann, & Bausch, 2011; Zulu-Chisanga, Boso, Adeola, & Oghazi, 2016). Response speed and ability to adapt to market demands allow SMEs to leverage the advantages of their “smallness” through innovation (Leal-Rodríguez & Albort-Morant, 2016; Rosenbusch et al., 2011). Therefore, innovation is an important topic of investigation in the research on SME performance. Most scholars consider innovation a key source of sustainable competitive advantage for SMEs (Andries & Czarnitzki, 2014; Rosenbusch et al., 2011). Based on the tenets of the Knowledge-based View (Grant, 1996a, 1996b; Kogut & Zander, 1992), which extends from the Resource-based View (Barney, 1991), the ability to successfully leverage innovation as a key firm strategy depends on the knowledge, skills, and other capabilities within the firm (Andries & Czarnitzki, 2014; Dibrell, Davis, & Craig, 2008; Subramaniam & Youndt, 2005). Thornhill (2006) argues that “…what an organization knows determines what it can do” (p. 691). Small organizations often invest heavily in intellectual capital through their employees, communications, and processes and leverage such investments to foster innovation within the company (Maes & Sels, 2014; Thornhill, 2006). Therefore, the relationship between the development, accumulation, and distribution of knowledge (facilitated by intellectual capital development) and performance is likely to be indirect. Organizations work to build intellectual capital, which likely serves as an input to enhancing the firm’s innovation strategy (Maes & Sels, 2014; Subramaniam & Youndt, 2005; Thornhill, 2006), providing sustained performance advantages. The effects and relationships among intellectual capital, innovation, and business performance in the SME context are, however, ambiguous and generally under-investigated (Gronum, Verreynne, & Kastelle, 2012).

1. Tangible and intangible assets vs. tangible and intangible resources

2. Intellectual capital and entity’s performance

3. Accounting recognition of intellectual capital

4. Study case

5. Conclusions

References

Nowadays the managers, investors and shareholders are seeking to identify the value sources of an economic entity in order to spot the most suitable destination for their investments. The context of the „new economy” concept stresses the importance of the intangibles assets that becomes greater and greater. Also, many international studies pointed out that performance and growth of the economic entities are driven by the intangibles assets owned, such as software, human capital, organizational structure, R&D investment. In spite of the increasing level of importance of these assets, many of them are not reported in the financial statements, are difficult trying to identify and also difficult to assess, but the endeavor should not be abandoned. This article is intended to show the way the intangibles assets are reported in financial statement of the Romanian economic entities and how they lead performance, growth and value for these companies

Tangible and intangible assets vs. tangible and intangible resources

Intangible resources, such as research-development expenses, innovations, the entity’s network, employee skills, etc., are the foundation of the competitive advantage which sustains high-level, long-term performance of the economic entity. According to Danescu and Spatacean (2009), current and potential investors, as well as other parties interested in the evolution of an economic entity, are more interested about the information on the resources which determine competitive advantage. For this, we consider that financial situations and public information companies reveal should have as much data on these future-benefit generating assets as possible. In the early nineties, a new concept started to emerge, in the literature and practice, about the importance of assets, especially intangible assets owned by economic entities. In particular, `movement of intangibles’, which received focus from managers, investors and those able to convey national laws and regulations. The value of intangible assets for the entities value and their performance started being acknowledged. Therefore, in the beginning of the 21st century, the importance of intangibles as a value and growth-generating factor was accepted by economists, investors and managers. (Lev and Daum, 2004) Nowadays, there is a re-focusing of the economic development, from industry to knowledge. Industry-based economy used to emphasize owning tangible assets, while knowledge economy considers intangible assets a crucial resource for economic entities, as well as a key factor for competitive advantage, economic success and generating value for companies. (Lev, Canibano and Marr, 2005)