Abstract
In the twenty-first century, intellectual capital and innovation capability have been identified as two of the most significant determinants of organisational performance. However, research into the relationship between intellectual capital, innovation capability, and organisational performance has yielded mixed results due to, several inconsistencies which includes the evaluation measurements used. Therefore, the purpose of this study was to classify and categorise the measurement indicators used in determining organisational performance. The research focuses on several scientific journals that report on organisational efficiency, including both financial and non-financial performance metrics. Studies examining the relationship between intellectual capital, innovation capability, and organisational performance were identified using a literature review approach use focal phenomenon. Articles were categorised and analysed based on how organisational performance was assessed. Financial and non-financial metrics, as well as objective and subjective steps, were used to classify the data. However, it cannot be ignored that multi-dimensional performances are used in some of the most recent literature. Therebefore, this study proposes three steps before deciding on performance indicators; Firstly, researchers should revise commonly used measurements of performance, or the same kinds of instruments for evaluation, and secondly, classify them into financial and non-financial measures or objective and subjective measures. Lastly, integrate those two types of measurement indicators. As a result, researchers will be able to achieve the research objective precisely and contribute to the body of knowledge.
Highlights
Organisation performance is used in measuring the quality of an organisation by academia in strategic management research (Tseng et al, 2013), despite the term being a highly debated issue and vary from one scholar to another
This study examine the dimensions used to assess organisational performance in the study related to intellectual capital and innovation capacity to better explain these inconsistencies
As a result, the implications of the research for both researchers and practitioners revealed the measurement instrument that researchers prefer in terms of intellectual capital and innovation capability
Summary
Organisation performance is used in measuring the quality of an organisation by academia in strategic management research (Tseng et al, 2013), despite the term being a highly debated issue and vary from one scholar to another. Through a review of the literature on intellectual capital and innovation capacity, this study will address organisational performance in both financial and non-financial contexts, as well as from the perspectives of objective and subjective measurement. This research aims to: (i) identify, classify, and categorise the measurement indicators used in determining organisational financial and nonfinancial performance in intellectual capital and innovation capacity domains, as well as (ii) objective and subjective performance. According to Sethibe and Steyn (2016), employing non-financial performance in a study requires consideration of two main reasons: (1) several groups of interest have specific expectations and goals for an organisation, and (2) not all shows a financial outcome This has resulted in non-financial metrics indicators, such as market share, product quality, retention, customer satisfaction, productivity, marketing effectiveness, operational effectiveness, reputation, branding, and quality. This study proposed multidimensional measurement which integrated financial and non-financial measurement as one of the best measurements for studies related to intellectual capital and innovation capability
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