Proposal of a New Model for the Algerian Companies to Measure the Effect of Intellectual Capital on Organizational Performance

Abstract

Currently, the Intellectual Capital (IC) is considered as the principle provenance for gaining competitive advantage in the knowledge economy. Many researchers and practitioners have tried to determine the several forms of the IC. They suggest several models to measure intellectual capital in the cause to permit the companies to well direct their hidden assets. The goal of this research is to compute the IC in Algerian companies using two models in order to propose a new model compatible with the Algerian companies managerial culture. This study tests the magnitude of the utilization of the IC in 14 companies through two models proposed by Sharbati, Jawad and Bontis, (2010) which divide IC into human capital, structural capital and relational capital and the model of Choudhury, (2010) which separates IC into four forms: human capital, social capital and organizational capital. This study goes into the examination of the effect of Intellectual Capital (IC) in Algerian Companies on Business Performance (BP). The data were collected from 307 employees by means of a questionnaire. These two models allow to formalize a new model using cluster analysis which is tested in new study using four companies. This study found in the two models that human capital has a weak relationship with the company’s performance. This signifies that IC should be integrated in the preparation of the company’s strategy. These results relate the need to increase the awareness of the managers on the significance of intellectual capital and its elements with a view to rise the performance of Algerian companies. About the new model proposed, the results show that there is an intermediate variable and moderate variable interferes the link between IC and customer satisfaction instead of the business performance.