Academic journal article Academy of Strategic Management Journal

Mediating Role of Operational Capabilities between Intellectual Capital and Organizational Performance: A Proposed Theoretical Framework

Academic journal article Academy of Strategic Management Journal

Mediating Role of Operational Capabilities between Intellectual Capital and Organizational Performance: A Proposed Theoretical Framework

Article excerpt

INTRODUCTION

In strategic management research relationship between the resources and performance is of major concern (Andersen, 2011). Researchers of the comptemporary era are identifying the mechanism that how resources can enhance the performance of an organization (Chen, 2012). From theoretical perspective, resource based theory (RBT) provides predominant framework by positing that unique strategic resources like perfectly inimitable and immobile idiosyncratic knowledge assets and capabilities are required to obtain superior performance (Barney, 1991; Andersen, 2011). Knowledge is assumed to be main element in modern economy and according to knowledge based view (KBV) organizations need knowledge or Intellectual capital for their survival in intensive competition (Stewart, 1997).

Intellectual capital is intangible knowledge based resource which clearly overweighs the tangible corporate value (Edvinsson & Malone, 1997). Moreover, sustainable ability of an organization to compete in the modern era is derived from exploitation and utilization of its knowledge based resources i.e. intellectual capital (Teece et al., 1997; Ling, 2013; Inkinen, 2015; Dzenopoljac et al., 2017). This is the reason that this era employs more effort in understanding and managing intellectual capital framework (Lu, 2014). IC is the important knowledge based resource of the organization that enhances the performance of an organization particularly in the knowledge based economy (Farsani et al., 2012). A plethora of research studies argued that IC has a significant positive effect on the organization performance (Tseng & James, 2005; Subramaniam & Youndt, 2005; Kalkan, Bozkurt & Arman, 2014). Similarly, many have linked IC with the radical innovation and learning capability (Karchegani, Sofian & Amin, 2013; Phusavat, Comepa, Sitko-Lutek & Ooi, 2011; Hsu & Fang, 2009). However, there are wide number of researchers who argued that intellectual capital relation with performance, radical innovation and organizational learning capability is complex (Mosavi, Nekoueizadeh & Ghaedi, 2012; Moghadam et al., 2013; Delgado-Verdeet et al., 2016).

On the other end, many researchers claim that only possession of resources does not mean that the organization will achieve superior performance. Major concern should be on allocation, effective utilization and management of resources (Tseng & James, 2005; Huang, Wu & Rahman, 2012). Resources itself do not provide superior performance without the ability/capability of the organization to transform them according to desired outcome (Huang, Wu & Rahman, 2012; Andersen, 2011). Moreover, organizations do not differ on the basis of resources but differ on the basis of their ability to utilize the resources (Richey et al., 2014; Andersen, 2011; Hunt, 2011). Veritably, resources lead towards capabilities and capabilities transform organizational resources into the performance outcomes (Wang, Dou, Zhu & Zhou, 2015; Dangol & Kos, 2014; Helfat & Winter, 2011; Wu, Melnyk & Flynn, 2010). For that reason, organizations required resources as well as adequate capabilities to attain superior performance and in order to allocate, deploy and coordinate organization resources in distinct and superior way operational capabilities are required (Cavusgil, Seggie & Talay, 2007). Operational capabilities are considered important for business performance as these are the secret ingredient for an organization to attain and maintain superior performance (Wu, Melnyk & Flynn, 2010; Helfat & Winter, 2011).

However, while studying the operational capabilities, dynamic capabilities are considered as its antecedent (Pavlou & El Sawy, 2011; Wilden & Gudergan, 2015). Conversely, if there is always a capability behind a capability then we face an infinite regress problem and it is impossible to identify the ultimate source of performance improvement (Collis, 1994; Cepeda & Vera, 2007). …

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