Structuring intellectual capital as an element of virtual organisation in small and medium enterprise clusters

Abstract

The purpose of this paper is to investigate intellectual capital as an element of virtual organisation in small and medium enterprise (SME) clusters. Effective organisation and management of intellectual capital is particularly required for the SMEs in clusters joining together to form a virtual relationship. It could work alongside the other important elements of virtual organisation, like effective communication, collaboration, and trust, to overcome the resource constraints of SMEs. The geographical proximity of SMEs in clusters reinforces the role of intellectual capital in a virtual organisation because geographically proximate parties could use social forces among them to ensure optimal utilisation of intellectual capital. This is a conceptual paper that takes up ‘structuring’ as a methodology to develop models that provide an insight into the role of intellectual capital in the effectiveness of a virtual organisation. No earlier research has specifically explored the role of intellectual capital as an element of virtual organisation; therefore, this paper establishes theoretical foundations for further empirical research in this area. Our proposed model of virtual organisation which explicates the sharing of intellectual capital by SMEs in clusters could make their activities more effective and competitive.