Does intellectual capital matter in small- and medium-sized enterprise (SME) decisions? Roles of resource integration capability and top management team involvement
| Date | 07 January 2025 |
| Pages | 229-252 |
| DOI | https://doi.org/10.1108/JIC-07-2024-0222 |
| Published date | 07 January 2025 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Chunhsien Wang,Chi-Cheng Wu,Chin-Chia Ou |
Does intellectual capital matter in
small- and medium-sized enterprise
(SME) decisions? Roles of resource
integration capability and top
management team involvement
Chunhsien Wang
College of Management, National Chiayi University – Sinmin Campus,
Chiayi, Taiwan, and
Chi-Cheng Wu and Chin-Chia Ou
Department of Business Administration, National Sun Yat-sen University,
Kaohsiung, Taiwan
Abstract
Purpose –Drawing upon an integrative perspective from intellectual capital theory with upper echelon theory,
we examined how intellectual capital affects resource integration capability and subsequent strategic decision-
making under weak versus strong top management team (TMT) involvement behavior.The purpose of this study
was to investigate the relationships between intellectual capital and strategic decision-making and the mediated
moderating effect between intellectual capital and decision-making on small- and medium-sized
enterprises (SMEs).
Design/methodology/approach –Using statistical empirical analysis, we tested our research hypotheses via
large-scale survey data from 323 SMEs. A regression analysis was applied to intellectual capital, resource
integration capability and TMT involvement behavior to estimate their influence on strategic decision-making.
Findings –Our findings suggest that the positive effect of intellectual capital on strategic decision-making via
resource integration capability is conditional on TMT involvement behavior, underscoring the role of resource
integration capability and TMT involvement behavior in intellectual capital. The results also indicate that
intellectual capital and resource integration capability strengthen positive decision-making relationships.
Furthermore, TMT involvement behavior strengthens the positive interaction effect of intellectual capital with
resource integration capability.
Practical implications –Intellectual capital is a critical and preeminent strategic resource for strengthening
strategic decision-making, especially for SMEs. Notably, trends related to intellectual capital can be used to
explore the management of SMEs and the corresponding contributions to and improvements in strategic
decision-making. Specifically, intellectual capital can be used by SME management teams to formulate and
implement relevant strategic decisions and enhance the effectiveness of decision-making, which are critical
steps for success in decision-making processes.
Originality/value –This research explored the relationships among intellectual capital, resource integration
capability,TMT involvement behavior and strategic decision-making in a comprehensive mediated moderation
model; it is the first known study to highlight that intellectual capital can enhance strategic decision-making and
provide managerial implications regarding how to align resource integration capability and TMT involvement
behavior while performing strategic decision-making.
Keywords Intellectual capital, Decision-making, Small- and medium-sized enterprises,
Top management team involvement, Resource integration capability
Paper type Research paper
1. Introduction
Decision making plays a crucial role in SMEs’ ability to gain competitive advantages,
respond to environmental changes, and achieve superior performance (Beltramino et al.,
2021;Hobday et al., 2005;Marr and Chatzkel, 2018;Reed et al., 2006). Given the
uncertainty and limited information when making decisions, managerial scholars have
long been interested in how and to what extent intellectual capital improves strategic
Journal of
Intellectual
Capital
229
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 25 July 2024
Revised 27 October 2024
10 December 2024
Accepted 10 December 2024
Journalof Intellectual Capital
Vol.26 No. 1, 2025
pp.229-252
©Emerald Publishing Limited
e-ISSN:1758-7468
p-ISSN:1469-1930
DOI10.1108/JIC-07-2024-0222
decision-making outcomes (Brennan and Connell, 2000;Marr and Chatzkel, 2018).
Decision making often requires multiple resources and capabilities to be executed
simultaneously (Hsu and Wang, 2012;Teece et al., 1997). Previous studies that have
investigated the adoption and implementation of intellectual capital have reported evidence
supporting a significant effect (e.g. Demartini and Beretta, 2020;Demartini and Paoloni,
2013;Helfat et al., 2007;Henry, 2013). Together, these studies have argued that intellectual
capital has a determining role in SMEs’ decision making and have provided evidence for a
direct impact of intellectual capital on strategic decision making.
Several researchers have identified intellectual capital as a facilitator of the SME-based
economy (Bansal et al., 2023;McDowell et al., 2018). As in Taiwan, SMEs account for the
vast majority of businesses and contribute to employment and economic development
(Chen, 1999;Liu et al., 1995). However, implementing intellectual capital is a complicated
task that requires a series of capabilities to integrate internal resources in business operations
(Henry, 2013;Hsu and Wang, 2012) for SME success. Indeed, for an SME to achieve
effective decision making, it must depend not only on its intellectual capital (Beltramino
et al., 2021;Carmona-Lavado et al., 2010) but also on its practices of integrating capabilities
(Roxas et al., 2017;Youndt et al., 2004). In support of this, previous studies have
consistently shown that resource integration capability has become increasingly crucial for
firms to make decisions by integrating internal and external resources to increase operational
effectiveness (Hsu and Wang,2012;Takeishi, 2001;Teece et al., 1997). Despite studies that
have suggested the importance of intellectual capital and the large number of studies that
have addressed this topic, few studies have explored how intellectual capital is used in real-
world SME settings (Xu and Li, 2019;Demartini and Beretta, 2020); this is particularly
important for research that examines how intellectual capital facilitates SMEs’ strategic
decision making.
Nevertheless, prior research has suggested that intellectual capital inherently embedded in
the organizational context needs to be addressed by mediating mechanisms that can either
directly or indirectly transmit to high-quality decision making (Hsu and Wang, 2012;
Kamukama et al., 2011;Wright et al., 2015). In particular, prior studies of the intervening
mechanism that mediates the relationship between intellectual capital and organizational
results are limited (Oliveira et al., 2020); however, studying the intellectual capital of SMEs is
especially important because it has a considerable influence on the effectiveness of decision
making and even the competitive advantages of SMEs (Maes and Sels, 2014;Ni et al., 2021;
Xu and Li, 2019). In essence, the mediating mechanism that can transfer and leverage the
effect of intellectual capital on strategic decision making has been unexplored in prior studies.
Moreover, the link between intellectual capital and decision making is complicated and
requires contextual conditions that might influence those relationships. Our aim was to address
the above gaps in the intellectual capital and decision-making fields. Specifically, an original
theoretical model has been proposed to assess the effect of intellectual capital on strategic
decision making through a resource integration mediating mechanism, and such a mediating
effect could also be influenced by contingency conditions.
To build our theoretical framework, we consider and integrate the intellectual capital
perspective (Mouritsen et al., 2001;Spithoven et al., 2011) and upper echelon theory
(Finkelstein et al., 2009a,b;Hambrick and Mason, 1984;Hambrick, 2007). Wefirst argue that
intellectual capital increases SMEs’ ability to integrate resources to exploit internal and
external organizational resources to facilitate their strategic decision making. Then, we specify
an important contingency condition of the moderating effect—TMT involvement behavior
serves as a facilitator of intellectual capital and can address how to best promote SMEs’
resource integration practices, thus improving their strategic decision making. We also argue
that the indirect effect of intellectual capital on strategic decision making through resource
integration capability is stronger for SMEs with substantive TMT involvement among TMT
members than for those with weak involvement. To verify our hypothesis, we investigated 323
JIC
26,1
230
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