Organisational Knowledge, Intangible Resources And Business Performance
Arturo Rodriguez-Castellanos, Jose
Domingo García-Merino, Lidia García-Zambrano,
University of Basque
ABSTRACT:
Organisational knowledge,
the sole source of sustainable competitive advantage, is embodied in companies
as intellectual capital, that is, the set of intangibles based on knowledge.
And special mention should be made of core competencies as they are the basis
of competitive advantage and, therefore, the fundamental source of business
value. This paper seeks to test the
existence of positive links between core competencies –grouped according to the
dimensions of intellectual capital (Human Capital, Structural Capital and
Relational Capital)– and business performance. A
survey was conducted among a representative sample of business managers in the
Basque Country (
Keywords: Organisational knowledge,
Intangible resources, Intellectual capital, Core competencies
1. Introduction
The growing concern regarding the management
of intangible resources is undeniable. They have always been present in
organisations, but the interest in them is relatively new and recent. Yet
knowledge is a critical element in today’s society. It has led to substantial
changes in the way of understanding corporate reality. The value of human
knowledge is currently much more important: know-how, training employees,
intellectual property, retaining customers and knowledge about market behaviour
are some examples of intangible resources that make the company generate more
value.
Likewise, research into
business themes have taken an important turn towards the study of intangibles
and their impact on obtaining sustained competitive advantages, as even thought
it has been acknowledged for some time that economic prosperity hinges on
knowledge and its useful application (Teece, 1998),
the emphasis on its management is relatively new.
The paper is structured as
follows. The second section justifies the key role of intangible resources in
business competitiveness, from the resource-based view, to then show their link
with intellectual capital and core competencies. The third section first
describes the study methodology: the hypotheses considered to be tested, the
selection of the population and obtaining the sample, and the research process
used, before then setting out the results obtained. Finally, the fourth section
presents the conclusions obtained, the limitations of the study and future
lines of research.
2. Intangible Resources As
Competitive Strategic Factors
2.1. Knowledge And
Intangible Resources In Today’s Society
The companies currently
show a greater innovative dynamism. It was the impact of technological changes
–telecommunications, information technologies, etc.–, together with the structural changes of
productivity since the 1990s that would boost a period of expansion, which has
subsequently been called the “knowledge era”.
We can therefore see that
the differentiating characteristic of the “New Economy” companies is above all
their foundation on knowledge. In fact, organisational knowledge is currently
considered to be the only source of sustainable competitive advantage for any
type of companies. In the words of Fontela & Guzmán (2003: 13), “we are entering into a
knowledge, innovative and highly productive society, where knowledge is
established as the main source of wealth. To the traditional accumulation of
tangible capital, infrastructure, factories and production facilities, now is necessary
to add the accumulation of human capital and technological capital as a factor
that is complementary to and inseparable from growth”. Economic growth and
competitive advantages no longer come from the availability of raw materials or
physical capital, but their source is rather know-how and ideas (Drucker, 1993; Bradley, 1997; Bounfour
& Edvinsson, 2005).
Consequently, those
business resources based on knowledge to a great extent, namely, the intangible resources, have become
decisive in companies (Cañibano et al, 2004). Precisely, the
knowledge intangibles, which are also called intellectual capital, are those
that enable companies to be different, to be better, and, therefore, construct sustainable
competitive advantages over time. These aspects are developed in the following
sub-sections.
2.2. Intangible Resources And
Competitive Advantage
The Resource-Based View has been a decisive contribution
to strategic management; however, other authors noted that companies have or
control a wide range of resources and combinations of them (capabilities) that are essential for
them to operate. These resources have different levels of efficiency, with some
being higher than others. Therefore,
companies with superior resources will be more likely to obtain better economic
results, provided that the cost of acquiring them is lower to the value
obtained as a result of the competitive advantage generated by them (Barney,
1986, 2001). This is the origin of the Resource-Based View.
A broad and quite
comprehensive definition is provided by Amit & Schoemaker (1993: 36), which define these “superior
resources” as “the set of resources and capabilities that are hard to negotiate
and imitate, scarce, appropriable and specialised, that provide the company
with a competitive advantage”, a definition that includes the five necessary
characteristics for the resources to be considered strategic factors. These t
five characteristics are: inimitable, scarce, valuable, non-substitutable and
non-transferable. We can also add durability over time to these
characteristics.
Thus, intangible resources
are those resources that, as they do not have a physical or financial base, and
as they are constructed by the company in time, more easily meet the
aforementioned requisites, and therefore more frequently become basic factors
of business competitiveness (Lev, 2001). This statement is particularly
applicable to knowledge-based intangible resources, that is, intellectual capital.
2.3. Intellectual Capital And
Core Competences.
Companies have expressed
growing interest in the subject of intellectual capital (IC) in recent years,
although there is not full agreement about the most appropriate definition. An
interesting definition was put forward by Euroforum
(1998:15): “set of assets of a company which, despite not being reflected on
traditional financial statements, generate or will generate value for the
company in the future”; however, there are some aspects of intellectual capital
(patents, licences, R&D expenditure, etc.) that can be included on the
financial statements. According Stewart (1997:2), in a simple way, IC is
“intellectual material –knowledge, information, intellectual property,
experience– that can be used to create wealth”. The different models to measure
IC put forward different ways of classification and also differentiate from
each other in the terminology used. Despite this, there is certain consensus
regarding three core components or dimensions: Human Capital, Structural
Capital and Relational Capital (Stewart, 1997; Sullivan, 1999; Brennan &
Cornell, 2000; Petty and Guthrie, 2000; Roos et al, 2001;
Bontis, 2002; Ordóñez de Pablos, 2002; Bueno, 2003;
Kauffman & Schneider, 2004; Marr & Roos,
2005).
With respect to Human
Capital (HC), the rapid progress in technologies that occurs daily means that
those workers with more knowledge, more skills to carry out the work and with
more talent are increasingly more necessary. Global companies require different
workers, with competencies, skills and mental agility, which enable them to
think systematically and within a technological setting (Bontis,
2002). Therefore, this dimension is one of the most important for the
organisation, and even the most important according to many authors (Marr &
Roos, 2005). The second dimension with IC is known as
Structural Capital (SC), which can be defined as the knowledge that the company
internalises either in its structure, in its processes or in its culture, and
remains there, even if its employees leave it (Bontis
et al, 2000; Camisón et al, 2000). SC can be considered to cover from
company culture or internal processes to information systems or databases (Bontis et al, 2000).
The Relational Capital (RC)
dimension is also very important: there is a widespread emphasis on the
importance of the influence of external relations on the IC models (Roos & Roos, 1997). RC must
include all the relations with the external stakeholders, as the firms are not
isolated systems, but rather that they are closely linked with the setting.
These three dimensions are not watertight compartments, but rather they are
interrelated. Therefore, any business strategy that seeks to develop the IC
must take into account the existing relationships between their different
components (Ordóñez de Pablos,
2002).
Apart from the IC
dimensions analysed above, another differentiation in the intangible resources
that we believe to be very useful is between intangible assets and core
competencies (Eustace, 2001; Mouritsen, 2003; Schunder & Markom, 2004).
The core competencies are the set of skills or aptitudes developed by
the company that generate a significant value or benefit for the client (Prahalad & Hamel, 1990). Therefore, they are the
sources of knowledge and activities that, by providing competitive advantage,
are the determining ones when it comes to create value. The core competencies
of a company are not usually very numerous, as, in order to achieve their
competitive advantage, the majority of the companies focus their endeavours and
internal resources on a few sources of knowledge, services or activities (core business). These competencies,
particularly those that are not linked to a specific activity, but rather to a
set, generally indefinite, of intangible resources, may be associated to the
different IC dimensions (Rodríguez et al, 2007, 2009). Therefore, we put
forward core competencies linked with to HC, or to SC or to RC (The link
between core competencies and IC dimensions goes on double sense: on the one
hand, the competencies contribute to IC generation; on the other hand, IC can
generate new basic competencies).
This link can be observed in the definition of IC formulated by Bueno (1998: 221): “set of different intangible core
competencies that enables competitive advantage to be created and sustained”.
Core competencies are the most valid resources
of the companies, the holding of said competencies must be expressed in the
company results. Thus, we could ask: Does holding a core competency associated to
a specific type of IC provide the company with better results? We will try to
answer these questions in the following sections.
3. Intangible Resources And
Business Performance
3.1. Methodology
3.1.1.
Hypotheses
Core competencies linked to Human Capital
For some time now, HC has
been considered as a critical resource in the majority of companies and is a
source of competitive advantage (Fernández et al, 1998). Recent studies show that
attributes such as education, experience and skills of the employees, among
other, lead to better business performance (Hitt et
al, 2001). Furthermore, HC is
difficult to replace, as there are no two people with the same characteristics;
people have tacit knowledge that is difficult to imitate and is acquired in
situ; therefore, this type of capital can only be developed internally (Lepak & Snell, 1999). Prior studies such as the one by Rodríguez et al, 2006 show that, in general, HC is linked to improve economic
results, but not directly, even though it does increase the SC and the RC,
which do directly contributed to generating business value.
Other studies uphold that
better business performance attributable to HC is sustainable in time, due to
the complex and intangible nature of that capital (Huselid,
1995 and Koch & McGarth, 1996). This leads us to
conclude that holding a core competency (competitiveness factor) linked to HC
can lead to better results.
HC is related to the
efficient management of costs, an innovative organisational culture and the
capability to adapt; on the other hand, it is related to customer loyalty, the
image or reputation of the company and its products. Therefore, when we
consider a strategic competitiveness factor associated to HC and the possible
relation that it may have with the business performance, we must consider the
variables that more directly affect the operating result of the company;
complementarily, it can also be seen in greater growth of sales and profits.
Therefore, the following
hypothesis is advanced:
H1: The key competitiveness
factors linked to Human Capital are associated to better business performance.
The secondary hypotheses
will therefore be:
H1.1:
The companies whose executives consider that their most relevant
competitiveness factor is associated to Human Capital have greater economic
profitability (ROA).
H1.2:
The companies whose executives consider that their most relevant
competitiveness factor is associated to Human Capital have greater growth in
sales.
Core competencies linked to Structural Capital
Many authors insist that an
efficient and effective SC is needed to get the most out of HC. According to Bontis (1998), HC only generate competitive advantage if it
transforms into SC. The latter refers to the intangibles that make up the work
method in the organization. It is valid insofar that it enables the companies
to do things for its employees, customers, suppliers and other
stakeholders. Previous studies (Hall,
1993; Rodríguez et al, 2006) show that the
intangibles making up SC are the most important in the organisations. The
greater preoccupation to maintain and improve SC generates increases in the
economic value of the company. Thus, as the idiosyncratic nature of the SC
increases, companies have incentives to invest resources to manage it, in order
to reduce risks and use its productive potential, and thus improve its results.
Therefore, the following
hypothesis is advanced:
H2: The key
competitiveness factors linked to Structural Capital are positively associated
to better business performance.
And, consequently, the
secondary hypotheses are:
H2.1:
The companies whose executives consider that their most relevant
competitiveness factor is associated to Structural Capital have greater
economic profitability (ROA).
H2.2:
The companies whose executives consider that their most relevant
competitiveness factor is associated to Structural Capital have greater growth
in sales.
Core competencies linked to Relational Capital
The relations with the
different stakeholders around the company –particularly the customers, but also
the suppliers, the competitors, the social stakeholders, etc– require good
knowledge of them. This interest in knowledge about the stakeholders with which
they maintain relations increases the likelihood of outdoing the competition
and therefore the likelihood of generating greater value in the company, which
leads to an increase in its economic results (Kandampully,
2002).
It must be assumed the
existence of a network of links among resources, individuals and activities
where each individual relation is a substructure that is influenced by and
influences the remaining relations (Anderson et al, 1994).
Therefore, the company
needs a wide range of links with other organisations and stakeholders that
enables it to be competitive on the market and obtain better results.
Based on the above, the
following main hypothesis is advanced:
H3: The key
competitiveness factors linked to relational
capital are positively associated
to better business performance.
And as secondary
hypotheses:
H3.1:
The companies whose executives consider that their most relevant
competitiveness factor is associated to relational
capital have greater economic
profitability (ROA).
H3.2:
The companies whose executives consider that their most relevant
competitiveness factor is associated to relational
capital have greater growth in
sales.
The main hypotheses
advanced are graphically displayed in Figure 1.
Figure 1: Main Hypotheses
3.1.2. Selecting The
Population And Obtaining The Sample.
An empirical study was performed
to check these hypotheses, with the results of survey to company managers
combined with information on business performance obtained from a database.
The survey focused on
companies in the Basque Country (
The initial population,
3,263 companies, was obtained from the SABI database. From there, a
representative random sample of 517 companies was obtained, whose managers
answered the questionnaire by means of a telephone survey.
Subsequently, the
financial-economic data of the companies were extracted from the SABI database;
due to the lack of information for certain surveyed companies in the analysed
period, along with the disappearance of any of them, the sample was reduced,
down to a total of 300 companies for 2007 and 219 for 2008. These samples have
a maximum error level of 5.4% and 6.4% for a confidence level of 95%,
respectively.
Table 1 contains the
technical datasheet of the conducted survey.
Table 1: Study Technical Data
|
Population |
3,263 companies in the Basque Country |
|
Sample |
517 valid questionnaires to directives |
|
Technique for
data collection |
Telephone survey |
|
Calendar |
20 November 2007 to 14 January 2008 |
|
Source of
economic-financial data |
SABI Database |
|
Calendar |
November 2009 |
|
Final sample |
|
|
Random final
error |
Random
error of ±5.4% in 2007 and ±6.4% in 2008, with a level of confidence 95%,
p = q = .5 |
3.1.3. Research Process
In order to verify the hypotheses,
the research process was organised as follows:
First of all, the answers
to a telephone survey conducted on the dates from 20 November 2007 to 14
January 2008 were collected, where the opinion of Basque executives were
gathered about different aspects relating to the importance of intangibles and
their financial valuation, the degree of knowledge that they held about them
and the reasons that pushed them to carry out that assessment. The
questionnaire was prepared as follows: the research team produced an initial
version, which was subject to a pretest with the
members of the Management and Finance Forum (The Management and Finance
Forum - Foro de Gestión
y Finanzas - is an association integrated by
financial directives of the main companies of the Basque Country), following which the final
questionnaire was prepared. Prior to conducting the survey, an introductory
letter was sent to 1,500 companies, to which the questionnaire was attached. 517 people were surveyed, as has been previously
stated. The answers of interest for the purposes of this study refer to the
importance of the intangible resources and the degree of knowledge about them,
particularly one question where the directives were asked to identify the key
competitive factor of their company, through a list or explaining a different
one. The factors indicated in the answers to this question were linked by the
research team to the three dimensions of the intellectual capital:
Next, after collecting the
opinion of the executives, information was gathered about the business
performance of the companies analysed in 2007 and 2008. This information came
from their financial statements according to the SABI database.
Subsequently, in order to
analyse the relations between the core competencies linked to the different
dimensions of IC and the business performance, the data obtained were initially
subject to a descriptive analysis. Secondly, in order to verify the hypotheses,
given that the variables did not match normal distribution, and that the standard transformations to achieve normality were not
successful, non-parametric tests, particularly the Mann and Whitney test, were
performed.
3.2. Results
The results of the analysis
are set out in the following subsections.
3.2.1. Key Competitiveness
Factors Linked To Human Capital
With respect to the key
factors of competitiveness (core competencies) relating to HC, the results for
2007 are shown in tables 4 and 5 They are shown how the
average values of the economic profitability (ROA) and the increase in turnover
are higher in those companies that consider the key competitive factor
associated to HC. However, only the difference in the ROA variable is
statistically significant to 5%, according to the Mann-Whitney test, it is not
significant in the other cases. Therefore, the secondary H1.1
hypothesis is accepted.
TABLE 2: Key Competitiveness Factors
Linked To Human Capital; 2007 Descriptive Statistics
|
|
N |
Mean |
Standard deviation |
|
Key competitiveness factor linked to Human Capital |
|||
|
ROA |
116 |
.1002 |
.1169 |
|
Growth in turnover |
115 |
.2620 |
.8161 |
|
Key competitiveness factor not linked to Human Capital |
|||
|
ROA |
183 |
.0798 |
.0758 |
|
Growth in turnover |
180 |
.2035 |
1.0142 |
Table 3: Key Competitiveness Factors Linked To Human Capital; 2007
Contrast Statistics
|
|
ROA |
Growth in turnover |
|
Mann-Whitney’s U |
9,082.000 |
9,682.000 |
|
Wilcoxon’s W |
25,918.000 |
25,972.000 |
|
Z |
-2.103 |
-.935 |
|
Asymptotic significance (bilateral) |
.035 |
.350 |
|
Grouping variable:
Key competitiveness factor linked to Human Capital |
||
The companies that have a
large amount of HC are able to have more skilled individuals in the production;
the company is capable of operating with sophisticated mechanisms and that can
generate new ideas and new methods in the economic activity. These new ideas
and knowledge will be capable of generating more opportunities so that the
companies work more efficiently and that is reflected in the return obtained.
Moving on to the results
for 2008, the year in which the downturn occurred, reflected in Tables 6 and 7,
it can be seen that the average values of the ROA and the increase in profits
for that year are higher in those companies that consider the strategic
competitive factor associated to Human Capital, but only the ROA variable is
statistically significant at 5%.
If then compared with the
2007 results, we can see that the greater ROA is maintained, and also significantly,
for the companies whose core competencies are linked to HC. Therefore H1.1
is also accepted for this period. Taking into account that in a previous study,
referring to the 2004-2006 time period, the results are similar, the higher
profitability of the companies.
Table 4: Key Competitiveness Factors
Linked To Human Capital; 2008 Descriptive Statistics
|
|
N |
Mean |
Standard
deviation |
|
Key competitiveness factor linked to Human Capital |
|||
|
ROA |
63 |
.0990 |
.0684 |
|
Growth in turnover |
63 |
.0386 |
.2818 |
|
Key competitiveness factor
not linked to Human Capital |
|||
|
ROA |
155 |
.0782 |
.0842 |
|
Growth in turnover |
155 |
.2323 |
.9778 |
Table 5: Key Competitiveness
Factors Linked To Human Capital; 2008 Contrast Statistics
|
|
ROA |
Growth in
turnover |
|
Mann-Whitney’s U |
3,564.000 |
4,453.500 |
|
Wilcoxon’s W |
15,654.000 |
6,469.500 |
|
Z |
-3.123 |
-1.016 |
|
Asymptotic significance (bilateral) |
.002 |
.310 |
|
Grouping variable: Key competitiveness factor linked
to Human Capital |
||
With respect to the, not
significant, greater increase in profits that companies whose core competency
is linked to HC posted in that year, it may be indicative that, at a time of crisis,
the companies that have previously invested in HC are in better conditions to
maintain, and even increase, its profits, than other type of companies, despite
the lower sales. Nonetheless, it will need to be checked in subsequent years
whether that noted trend is significantly consolidated.
3.2.2. Key Competitiveness Factors Linked To
Structural Capital
With regard to the second
hypothesis, Table 8 shows that in 2007 the average of the variables considered
is not greater in those companies that declare a strategic competitive factor
linked to SC with respect to other companies. Consequently, we cannot accept
any of the secondary H2 hypotheses and therefore not H2.
Table 6: Key Competitiveness Factors
Linked To Structural Capital; 2007 Descriptive Statistics
|
|
N |
Mean |
Standard
deviation |
|
Key competitiveness factor linked to Structural
Capital |
|||
|
ROA |
39 |
.0855 |
.0737 |
|
Growth in turnover |
37 |
.0707 |
.2297 |
|
Key competitiveness factor not linked to Structural Capital |
|||
|
ROA |
260 |
.0880 |
.0971 |
|
Growth in turnover |
258 |
.2486 |
1.0007 |
Table 7: Key Competitiveness
Factors Linked To Structural Capital; 2007 Contrast Statistics
|
|
ROA |
Growth in
turnover |
|
Mann-Whitney’s U |
4,939.000 |
4,175.000 |
|
Wilcoxon’s W |
38,869.000 |
4,878.000 |
|
Z |
-.260 |
-1.232 |
|
Asymptotic significance (bilateral) |
.795 |
.218 |
|
Grouping variable: Key competitiveness factor linked to Structural Capital |
||
With respect to the 2008 results,
we find in Table 10 that, similarly to what happened in 2007, the average of
the variables considered is not higher in companies that consider the key
factor of competitiveness linked to SC, and the results are not statistically
significant. Therefore, we cannot accept H2.
Table 8: Key Competitiveness Factors
Linked To Structural Capital 2008 Descriptive Statistics
|
|
N |
Mean |
Standard
deviation |
|
Key competitiveness factor linked to Structural
Capital |
|||
|
ROA |
36 |
.0672 |
.0555 |
|
Growth in turnover |
36 |
.1352 |
.4122 |
|
Key competitiveness factor
not linked to Structural Capital |
|||
|
ROA |
182 |
.0876 |
.0841 |
|
Growth in turnover |
182 |
.1845 |
.9037 |
Table 9: Key Competitive Factors Linked
To Structural Capital; 2008 Contrast Statistics
|
|
ROA |
Growth in
turnover |
|
Mann-Whitney’s U |
2,718.000 |
3,053.500 |
|
Wilcoxon’s W |
3,384.000 |
19,706.500 |
|
Z |
-1.614 |
-.643 |
|
Asymptotic significance (bilateral) |
.107 |
.520 |
|
Grouping variable: Key competitiveness factor linked to Structural Capital |
||
Therefore, we believe that
it cannot be deduced from the above that the core competencies associated to SC
are not important in the organisations. There is general agreement that the
competitive advantage of a company is ultimately due to an appropriate
combination between the different IC dimensions and they are therefore all
important.
A possible additional explanation
for those results is that the executives that declared a key competitive factor
linked to Structural Capital only expressed intentions or opinions, but their
companies really did not implement it by means of appropriate management.
3.2.2. Key Competitiveness Factors Linked To
Relational Capital
As far as H3
hypothesis is concerned, Tables 12 and 13 show that
average growth in
Table 10: Key Competitiveness
Factors Linked To Relational Capital; 2007 Descriptive Statistics
|
|
N |
Mean |
Standard
deviation |
|
Key competitiveness factor linked to Relational
Capital |
|||
|
ROA |
107 |
.0844 |
.0849 |
|
Growth in turnover |
106 |
.2795 |
1.2860 |
|
Key competitiveness factor not linked to Relational Capital |
|||
|
ROA |
192 |
.0896 |
.0992 |
|
Growth in turnover |
189 |
.1964 |
.6770 |
Table 11: Key Competitiveness Factors
Linked To Relational Capital;
2007 Contrast Statistics
|
|
ROA |
Growth in
turnover |
|
Mann-Whitney’s U |
9,376.500 |
9,587.500 |
|
Wilcoxon’s W |
15,154.500 |
27,542.500 |
|
Z |
-1.250 |
-.611 |
|
Asymptotic significance (bilateral) |
.211 |
.541 |
|
Grouping variable: Key competitiveness factor linked to Relational Capital |
||
With regard to the 2008
results, the average of the ROA variable is greater in those companies that
consider their key competitiveness
factors associated to RC, while the sales growth and
operating profit growth variables did not perform as expected, as can be seen
in Table 14. On the other hand, given the contrast statistics (Table 15), the
hypothesis H3.1 is confirmed.
Table 12: Key Competitiveness
Factors Linked To Relational Capital; 2008 Descriptive Statistics
|
|
N |
Mean |
Standard
deviation |
|
Key competitiveness factor linked to Relational
Capital |
|||
|
ROA |
89 |
.0861 |
.1000 |
|
Growth in turnover |
89 |
.1145 |
.5130 |
|
Key competitiveness factor
not linked to Relational Capital |
|||
|
ROA |
129 |
.0814 |
.0636 |
|
Growth in turnover |
129 |
.2190 |
1.0082 |
Table 13: Key Competitiveness Factors
Linked To Relational Capital; 2008 Contrast Statistics
|
|
ROA |
Growth in
turnover |
|
Mann-Whitney’s U |
4,852.500 |
5,607.500 |
|
Wilcoxon’s W |
8,857.500 |
13,992.500 |
|
Z |
-1.940 |
-.291 |
|
Asymptotic significance (bilateral) |
.052 |
.771 |
|
Grouping variable: Key competitiveness factor
linked to Relational Capital |
||
Figure 2
graphically shows the accepted hypotheses.
Figure 2: Accepted Hypotheses
(Continuous arrow: hypothesis accepted in 2007
and 2008. Broken line arrow: hypothesis accepted only in 2008)
4. Conclusions
This paper seeks to
identify the positive links between key competitive factors as core
competencies associated to the different dimensions of intellectual capital,
and the business performance.
However, the results
obtained were not as overwhelming as could have been expected. In fact,
according to the analysis performed, the only variable that leads to
significant improvements in the results is the economic profitability (ROA).
In the case of the companies
with core competencies associated to Human Capital, the higher ROA is
significant in each of the years in question (2007 and 2008). Nonetheless, this
seems to contradict other studies, where a direct link between Human Capital
and business performance is not usually found, but rather through its effect on
the other dimensions of intellectual capital. This disparity may be due to the
indirect links between Human Capital and the business performance found in
other studies may also occur in the population analysed here, although, in the
way that our study has been planned –a unique key competitive factor for each
company, linked to a single intellectual capital dimension–, are not
detectable.
The companies whose
executives consider the key competitiveness factor linked to Structural Capital
does not obtain better results a priori.
This seems to contradict prior findings, according to which the other types of
intellectual capital only generates competitive advantage if they are
transformed into Structural Capital. The results are therefore not perhaps
reflecting the true role of structural capital in the analysed companies, as
the competitive advantage is ultimately due to an appropriate combination
between the different dimensions of the intellectual capital, and the
importance of SC is
widespread in other types of IC.
With respect to the core
competencies associated to Relational Capital, they were only significantly
reflected in a better ROA in 2008.. In a year when the
downturn had already started, such as 2008, when only the best prepared
companies survive and are profitable, the greater endowment of intangibles,
rational in this case, leads to greater profitability.
We believe that these
conclusions are particularly relevant, as, as has already been indicated, this
study has been based on a representative sample of companies –any type of
companies from all sectors–, while the majority of previous studies have
focused on specific sectors or technological or innovative companies.
Nonetheless, this work has
various limitations: the first refers to the geographical area considered; the
second is that, given the approach of the study, relations are not considered
that may exist, in the same organisation, between competencies linked to
different types of intellectual capital, as only the core competencies that the
executives perceive as the most important in their company are taken into
account.
In this respect, a future
study would be to compare the relations raised with subsequent data, taking
into account that a period of deep economic crisis are thus included, in order
to consider to what degree the results of the companies with greater interest
in their intangibles have perhaps been able to weather the storm better than
others that were not so concerned with their management.
Finally, an approach where
the executives are asked about more than one core competency, and a measure of
its relative importance in the organisation, would enable the link to be
established between the different core competencies and with the business
performance.
5. Acknowledgement
This paper has been made inside of
the Research Group on Financial Valuation of Business Intangibles (VALINTE)
(Ref. GIU07/49), funded by the University of the Basque Country. The authors
are grateful to the members of the Basque Management and Finance Forum for the
collaboration on the treatment of questionnaire used to obtain information from
the business managers about the topics analyzed in this paper.
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Contact the Authors:
Arturo Rodriguez-Castellanos; Email: arturo.rodriguez@ehu.es
Jose Domingo García-Merino; Email: josedomingo.garcia@ehu.es
Lidia García-Zambrano; Email: lidia.garcia@ehu.es