The Effect of Organizational Learning Capability as a Mediating Variable in the Relationship between Green Intellectual Capital and Business Sustainability: Evidence from the Manufacturing Sector

Abstract

Sustainability is aimed to foster the balanced of economic, social and environmental development. However, only economic dimension is receiving more attention in business organization. In fact, the present economic activity has contributed to rather serious environmental crises. This environmental destruction seems to affect our ability in sustaining prosperity and achieving social equity. Thus, there has been an increase interest in green intellectual capital towards attaining the goal of business sustainability in the last decades. Green intellectual capital refers to a new form of innovation and approach in the attempt to understand and solve issues related to the environment. Furthermore, the role of green intellectual capital on business sustainability is better supported by organizational learning capability to mediate the relationship between green intellectual capital and business sustainability. Hence, the motivation of this study derives from the above facts that the green intellectual capital and business sustainability approach are still new in Malaysia. The developed hypotheses were tested based on the data gathered via mail survey to managers of SMEs in the Malaysian manufacturing. Data collected from 168 managers were analyzed using the Smart PLS 3.0 statistically techniques. Three main findings revealed. Firstly, green structural capital and green relational capital have significant relationship with organizational learning capability while green human capital did not. Secondly, organizational learning capability has a significant relationship with business sustainability. Thirdly, organizational learning mediates the relationship between both green structural capital and green relational capital and business sustainability, while green human capital did not. This current study, has contributed to the body of knowledge where this is the first study that links green intellectual capital on business sustainability. In addition, no research done on organizational learning capability as mediating in the relationship between green intellectual capital and business sustainability. Finally, this paper provides several implications and limitations.