Enhancing radical innovation performance through intellectual capital components
| Pages | 789-806 |
| Date | 09 October 2017 |
| DOI | https://doi.org/10.1108/JIC-10-2016-0103 |
| Published date | 09 October 2017 |
| Author | Lara Agostini,Anna Nosella |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Enhancing radical innovation
performance through intellectual
capital components
Lara Agostini and Anna Nosella
Department of Management and Engineering,
University of Padua, Vicenza, Italy
Abstract
Purpose –In today’s knowledge economy the ability to innovate and develop new products is a key factor to
sustain firm performance. Within this context, analysing the role of different components of intellectual
capital (IC) becomes of foremost importance, as well as an under-investigated issue for small- and
medium-sized enterprises (SMEs). The purpose of this paper is to investigate the impact of human,
organisational and relational capital (RC) on radical innovation performance (RIP), as well as to examine
whether organisational capital (OC) and RC mediate the relationship between human capital (HC) and RIP and
whether OC moderates the relationship between RC and RIP.
Design/methodology/approach –The methodology consisted of a factor analysis and different regression
models to test for mediation and moderation. The analyses are carried out on a sample of 150 micro firms and
SMEs involved in the production of machinery or instruments and located in Italy.
Findings –Results show that HC is directly associated to RIP, as well as OC and RC that totally
mediate the relationship between HC and RIP. Moreover, OC positively moderates the relationship
between RC and RIP.
Originality/value –This study is particularly interesting because it adopts an overarching perspective on
IC testing the interplay between the different components of IC. In addition, it focusses on the SME context
which is under-investigated as far as IC and performance measurement is concerned.
Keywords Relational capital, Human capital, Organizational capital, Intellectual capital,
Small to medium sized enterprises, Radical innovation
Paper type Research paper
1. Introduction
In today’s environment characterised by rapid technological change, globalisation and
the emergence of new economies, radical innovation (RI) has become a high priority
(Agostini et al., 2016). Consequently, various approaches have been proposed to identify
its drivers, among which a firm’s knowledge base, and in particular intellectual capital
(IC), seems to represent a unique resource for radical innovation performance (RIP)
(Yitmen, 2011; Zhou and Li, 2012).
In this context, research around IC has shifted towards a focus on the role that it can play
as a critical antecedent to innovation (Dost et al., 2016). However, the IC-RI link constitutes a
complex phenomenon that remains unsolved, thus requiring additional work to be
understood (Delgado-Verde et al., 2016).
More particularly, despite different studies showing that small- and medium-sized
enterprises (SMEs) are increasingly focussing on RI (e.g. Simon et al., 2002) and that their
competitive advantage and innovation capabilities are usually based on IC (Steenkamp and
Kashyap, 2010), the context of SMEs is under-investigated. Furthermore, according to
Wu et al. (2007) and St-Pierre and Audet (2011), whether the components of IC influence the
performance of SMEs and which specific performance dimensions are affected remain
promising areas of investigation.
On such grounds, the aim of this paper is to disentangle the IC concept and investigate
how different IC components interact and influence RIP in the context of SMEs.
Journal of Intellectual Capital
Vol. 18 No. 4, 2017
pp. 789-806
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-10-2016-0103
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
789
Enhancing RIP
through IC
components
Specifically, this paper aims to investigate the impact of human, organisational and
relational capital (RC) on RIP, whether the organisational and RC act as mediators in the
relationship between human capital (HC) and RIP and whether organisational capital (OC)
moderates the relationship between RC and RIP.
Based on survey data collected on a sample of 150 Italian manufacturing SMEs,
our results confirm the mediating role of organisational and RC in the relationship between
HC and RIP as well as the moderating role of OC in the relationship between RC and RIP.
The paper is organised as follows: first, a literature review of the topic is provided and
then, after describing the methodology, the results are presented and discussed.
2. Theoretical background
2.1 The debate around IC and innovation
IC can be defined as the combination of the human, organisational and relational resources
and activities of an organisation, thus including the knowledge, skills, experiences and
abilities of the employees, the organisational routines, procedures and systems of the
company and all the resources linked to the external relationships of the enterprise, such as
with customers, suppliers, R&D partners, etc. (María Díez et al., 2010). IC is thus comprised
of three main components. HC is defined as the combination of the knowledge, skills,
experience and individual capabilities of a firm’s employees and managers, which is not
possible to appropriate (Edvinsson and Malone, 1997a). OC consists of all the non-human
storehouses of knowledge in organisations belonging to the organisation itself; it can also
be defined as the value of “what remains in the company when employees go home for the
night”(Stewart, 1997; Roos et al., 1998; Bontis et al., 2000; Curado, 2008). Finally, RC is made
up of the relations with partners (customers, suppliers, etc.) outside the firm as well as any
other relational resources, such as reputation, brand and loyalty (Sveiby, 1997; Bontis, 1999;
Løwendahl, 2005).
In recent years, the debate around the innovation outcomes related to IC has become a hot
topic in the Journal of Intellectual Capital and in the whole IC community. Three main
approaches can be distinguished: the first focusses on the relationship between IC as a whole
and innovation performance (e.g. Agostini et al., 2017); the second investigates the impact of
single components of IC on innovation performance separately (e.g. Delgado-Verde et al., 2011);
and the third concentrates on how IC components interact to enhance innovation outcomes
(e.g. Dumay et al., 2013).
In this paper, we embrace the third approach, based on the recent evidence (e.g.Elsetouhi
et al., 2015)suggesting that IC componentstransform each other often in a pluralistic and fluid
manner (Cuganesan, 2005) and therefore should complement one another to reach
organisational goals. The narrative of this perspective is multifaceted in nature, and it
implies the use of more complex models allowing the understanding of the intricate
relationshipsexisting among IC componentsand their effect on RI (Delgado-Verde et al.,2016).
2.2 The interaction among IC components and their influence on RIP
The literature investigating how the interaction of IC components may have an impact on
RI specifically is scant. Subramaniam and Youndt (2005) found that the interaction
between HC and social capital exhibited a positive relationship with RI capability.
Conversely, Dumay et al. (2013) proved that RC, mainly in terms of partner cooperation/
business networks, is important for RI, and structural capital and HC are mitigating
factors. Furthermore, Chen et al. (2014) found that HC and OC are positively related to
customer capital, which in turn has a positive effect on new product performance. Finally,
the study of Wu et al. (2007) showed that organisational and RC fully mediate the
relationship between HC and new product development in the context of Taiwanese
companies in electronic- and IT-related industries.
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