The Impact of Corporate Top Executives’ Intellectual Capital on Organizational Effectiveness: Moderating Effects of Cultural Values and Business Performance

Abstract

Purpose: This study explored the effects of corporate top executives’ intellectual capital on organizational effectiveness and business performance and determined whether these effects vary from the factors included in Inglehart’s cultural values. Design/methodology/approach: A large group of corporate executives (n=900) were included in this study (450 each from China and the U.S.). Inglehart’s cultural values were established as moderating variables. A path analysis using EQS6b was conducted to verify the hypothesis. Findings: The findings indicate that the sub-elements of intellectual capital are strong drivers of a company’s organizational effectiveness. The results showed that human, customer, and structural capitals affect organizational effectiveness positively. Compared with traditional versus secular-rational values and survival versus self-expression values, intellectual capital had significant effect on a company’s organizational effectiveness and business performance. Research limitations/implications: Scarce research has been conducted on intellectual capital. Even though intellectual capital is a key marketing concept that should not be ignored by today’s companies and CEOs, very little empirical research has been conducted to test its theoretical framework. Originality/value: The study showed that the cultural dimension is closely connected to the development of intellectual capital in companies or to firms’ business performance. Companies that aim to compete or are already competing in overseas markets should consider adopting business strategies that incorporate cultural values into their intellectual capital.