Intellectual Capital in Religious Organisations: Malaysian Zakat Institutions Perspective

Abstract

The current study investigates the relationship between intellectual capital with zakat institutions' performance. Intellectual capital is a broad concept that recognizes knowledge, learning capabilities, innovativeness of the employees as well as skills of the organisation as the key ingredients in economic development, replacing tangible resources and financial capital. Intellectual capital consists of three main constructs namely human capital, relational capital and structural capital. In order to meet the objectives, survey questionnaires were distributed to employees of zakat institutions in Malaysia. The result of the study provides evidence that intellectual capital influences the performance of zakat institutions. Meanwhile, only two out of three intellectual capital constructs which are human capital and relational capital have significant positive relationships towards zakat institutions' performance. This reflects that experience, competencies and skills of human resources and knowledge embeds in the relationships with zakat recipients, zakat contributors and others such as government are considerably important in enhancing efficiency of the zakat institutions. On the other hand, the structural capital does not have any influence over zakat institutions' performance. The findings of this study offer guidelines to the managers of zakat institutions in decision making and formulating strategies relevant to the knowledge development of the organizations.