INTELLECTUAL CAPITAL IN INNOVATIVE FIRM

Nurziana Mohd Atan,Saudah Sofian

doi:10.29121/granthaalayah.v5.i11.2017.2369

Nurziana Mohd Atan, Saudah Sofian

Open Access

https://doi.org/10.29121/granthaalayah.v5.i11.2017.2369

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Abstract

This research was conducted to investigate the influence of intellectual capital on overall innovation and R&D activities in an innovative firm. The firm is a leader in natural goat’s milk-based cosmetics and health products in Malaysia. Intellectual capital consists of four components, human capital, structural capital, relational capital and spiritual capital. This research was a case study and qualitative approach was applied to gather data. The Marketing Manager, Human Resource Manager, Factory Operation Manager, administrative workers, factory workers, IT personnel and customers of the firm were interviewed. The information from the interviews was analyzed using codes and transcription. Finding of the study indicates that among the intellectual components, structural capital is the highest contributor to the firm’s innovation. Among the recommendations made to the firm are to increase human capital with high expertise, to have a systematic documentation, to cooperate with organization’s external environment and strengthen spiritual value. Future researches are suggested to use instruments other than interviews and widen the scope to more than one firm or industry.

Highlights

In a fully competitive world, intangible assets are very important for an organization (Stewart, 1999)
Intellectual capital consists of four components, human capital, structural capital, relational capital and spiritual capital
This study examines the use of Intellectual Capital (IC) and innovation in an innovative firm

Summary

Introduction

In a fully competitive world, intangible assets are very important for an organization (Stewart, 1999). This is because in the 21st century, economy requires high investments in knowledge assets such as information technology, Internet business, brands, patents, and copyrights. These knowledge assets are known as intellectual assets or Intellectual Capital (IC) (Seetharaman et al, 2002; Dean and Kretschmer, 2007). Success will only be achieved by a company that has good knowledge and uses it effectively. IC becomes a critical resource for the viability and success of the firms as it has an impact on business performance (Bontis, 1998; Bontis et al, 2002)

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