Intellectual Capital and Innovation Capability: A Conceptualization of Organisation Performance Measurement through Literature Review

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.