Improving the performance/competency of small and medium enterprises through intellectual capital

Abstract

PurposeConventional economic contexts and value creation exert on the extensive use of intangible resources whose value is much greater than the tangible assets. In particular, intellectual capital (IC) is recognized as an important source of value creation for firms. However, the field of IC is majorly dominated by large firms, and little has been done in exploring IC in small and medium enterprises (SMEs). Within this context, the purpose of this article is to contribute to the body of literature on IC in the SMEs context by investigating the different dynamics of IC and understanding its impact on their organizational performance and processes.Design/methodology/approachThe study has contextualized an integrative review of literature collected from Web of Science (WoS) and further analyzed integrating the bibliometric and manual review in a systematic approach.FindingsThe paper summarizes the key findings highlighting how SMEs can grasp IC in their core competencies and operational processes to achieve sustainable business performance. The study provides theoretical propositions highlighting the conceptual underpinnings of the literature on IC in SMEs and proposed methods outlining the methodological issues arising out of the diverse empirical/quantitative approaches adopted in the previous literature. Furthermore, empirical findings from the literature show that IC management affects a broad range of financial performance metrics in SMEs, however, sometimes with unexpected and mixed results. Hence, more research to replicate prior studies and corroborate extant research in both similar and different contexts would be desirable.Research limitations/implicationsThe study adopts an integrative review to understand the context of IC in SMEs; however, it does not study the synergy between varied IC components individually and their role in SMEs performance. Furthermore, the review relates IC to SMEs and does not cover the role of IC in large corporations.Originality/valueThe originality of this paper lies in its contribution to the body of knowledge in the field of IC and SMEs by exploring IC's impact on SME performance, especially the market performance, knowledge management (KM), strategic business models, sustainability performance (corporate social responsibility [CSR]), innovation and their intercollaborations (varied stakeholders).