The impact of intellectual capital – knowledge management strategy fit on firm performance

Abstract

PurposeThe purpose of this paper is to focus on the fit between intellectual capital (IC) and knowledge management (KM) strategy and its impacts on firm performance.Design/methodology/approachBased on the fit view, the authors posit that firms can enhance performance by aligning the structure of their IC with KM strategy, as reducing the extent to which their actual IC profile deviate from the “ideal” profile when implementing certain type of KM strategy. Using survey data collected from 328 high technology firms in China, the authors tested the research model.FindingsThe more fit a firm’s IC is to its KM strategic type, the better operational and financial performance it can achieve.Research limitations/implicationsThe sample of high technology firms in China might limit the generalization of the findings. Nonetheless, this study is based on and extends prior research, which provides a deepened understanding of the role of IC-KM strategy fit in organizational settings.Practical implicationsThe paper suggests that firms should adjust their IC according to KM strategy they employ. According to the findings, managers can selectively develop IC to achieve performance goals under certain type of KM strategy.Originality/valueAs one of the first studies to investigate the relationship among IC, KM strategy and firm performance in a holistic way, it indicates that the IC-KM strategy fit can be a novel explanation for performance variances through the alignment of knowledge-based capability and strategy.