Abstract
Micro enterprises formed the majority of business establishments in Malaysia and play an important role in the business ecosystem. There are numerous studies of intellectual capital on large organizations and small and medium enterprises, however no study has been carried out on micro enterprises. The findings of the partial-least square analysis of one hundred and six micro enterprises found that intellectual capital has a significant relationship to organizational performance. In addition, the relationship between intellectual capital and organizational performance was significantly influenced by tacit knowledge sharing. In particular, tacit knowledge sharing proves to be extremely relevant when it comes to reinforcing the intellectual capital on the performance of micro enterprises in Malaysia. Limitations and implications for future studies are discussed.
Highlights
Micro Enterprises continue to play a significant economic role globally (Munoz, Welsh, Chan & Raven, 2014)
The objective of this study is to investigate the relationship of intellectual capital on organizational performance with the inclusion of tacit knowledge sharing as mediating effect
The results showed a sixfactor solution with a total variance explained of 74.716 percent and the first factor only explained 40.77 percent which confirms that common method bias is not a serious problem in this research
Summary
Micro Enterprises continue to play a significant economic role globally (Munoz, Welsh, Chan & Raven, 2014). About 76.2% of businesses establishments in Malaysia are micro enterprises (SME Annual Report, 2015). In Malaysia, micro enterprises are defined based on either by sales turnover which is less than RM300, 000 or by employees of less than 5. The government is providing incentives for micro enterprises through focused programmes especially funding, to help them improve and grow towards Small and Medium Enterprises (SMEs) where more incentives are available. Micro enterprises dominated the businesses establishments in most countries, studies on micro enterprises are limited. Most studies on micro enterprises in Malaysia were focused on the difficulty of obtaining funding (Hassan, Chin, Yeow & Mohd Rom, 2010, Muridan & Ibrahim, 2016), management success (Munoz et al, 2014), entrepreneurial orientation (Awang, Ahmad, Asghar, Subari & Kassim, 2011).
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