Intellectual capital and supply chain resilience
| DOI | https://doi.org/10.1108/JIC-06-2020-0206 |
| Published date | 26 January 2021 |
| Date | 26 January 2021 |
| Pages | 713-738 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Muhammad Shujaat Mubarik,Nick Bontis,Mobasher Mubarik,Tarique Mahmood |
Intellectual capital and supply
chain resilience
Muhammad Shujaat Mubarik
College of Business Management, Institute of Business Management,
Karachi, Pakistan
Nick Bontis
DeGroote School of Business, McMaster University, Hamilton, Canada
Mobasher Mubarik
Tun Hussein Onn University of Malaysia, Batu Pahat, Malaysia, and
Tarique Mahmood
Mohammad Ali Jinnah University, Karachi, Pakistan
Abstract
Purpose –The main objective of this study is to test whether firms with a higher level of intellectual capital
(IC) perform better in terms of theirsupply chain resilience compared to those with lower levels of IC. Likewise,
the study also examines the impact of IC (characterized by human capital, relational capital and structural
capital) on supply chain resilience directly and through supply chain learning.
Design/methodology/approach –Data were collected from the 159 processed-food sector firms using a
close-ended questionnaire during the corona virus 2019 (COVID-19) pandemic. Partial least squares structural
equation modelling (PLS-SEM), partial least squares multigroup analysis (PLS-MGA) and one-way analysis of
variance (ANOVA) were used to test a set of hypotheses emanating from a conceptual model of IC and supply
chain resilience.
Findings –Empirical results revealed a significant influence of all dimension of IC on a firm’s supply chain
learning and supply chain resilience. Likewise, findings also exhibit a momentous role of supply chain learning
in reinforcing the impact of IC on supply chain resilience. Cross-firm size comparison reveals that supply chain
resilience of firms with a higher level of IC performed significantly better than those with lower levels of IC.
Firms with a higher level of structural capital had a highly resilient supply chain.
Practical implications–Findings of the study imply that IC and supply chain learning should be considered
as a strategic tool and should be strategically developed for uplifting a supply chain performance of a firm. The
development of IC and supply chain learning (SCL) not only improves the supply chain resilience of a firm but
also can help to integrate the internal and external knowledge for harnessing supply chain resilience.
Originality/value –This research study was conducted during the COVID-19 pandemic which provides a
unique setting to examine resiliency and learning.
Keywords COVID-19, IC, Supply chain learning, Supply chain resilience, Pakistan
Paper type Research paper
1. Introduction
Recent catastrophic events (e.g. natural disasters, political instability, terrorism, energy
crises) have relentlessly disrupted production and distribution processes (Mandal, 2012;Chen
et al., 2013;Sawik, 2013). However, the corona virus 2019 (COVID-19) pandemic negatively
affected businesses in a far more devastating way. Organizations around the globe suffered
significant losses in a large part to the immense disruption of their supply chain. A smooth-
running supply chain is critical for most industries when serving their end consumers
(J€
uttner, 2005;Craighead et al., 2007;Juttnar and Maklan, 2011;BCI, 2018).
The severity of the COVID-19 pandemic made management of the supply chain
uncontrollable and highly unpredictable. According to the World Economic Forum (2020),
losses due to COVID-19 were estimated in the trillions of dollars worldwide with the total
economic impact and duration of th ose losses difficult to predict . However, some
IC and supply
chain resilience
713
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 23 June 2020
Revised 12 September 2020
9 November 2020
Accepted 6 January 2021
Journal of Intellectual Capital
Vol. 23 No. 3, 2022
pp. 713-738
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-06-2020-0206
organizations were in a much better position to whether the financial storm, especially
businesses that had a more resilient supply chain. A resilient supply chain affords
organizations the benefit of dealing with major economic disruptions in a more manageable
way (Christopher and Peck, 2004;Sheffi and Rice, 2005;Pettit et al., 2019).
In this context, supply chain resilience (SCR) is an important strategic weapon for
economic and financial survival (Melnyk et al., 2014;Pettit et al., 2019). SCR is defined as
the capability of a supply chain to operate in the face of massive disturbances and
disruptions with or without a limited decrease in its performance. Tukamuhabwa et al.
(2015,p.8)defineSCR“as the ability of a supply chain to prepare for and/or respond to
disruptions, to make a timely and cost-effective recovery, and therefore progress to a post-
disruption state of operations”. Likewise, SCR also influences the future position of a
supply chain, “to re-emerge in ideally, a better state than prior to the disruption”
(Tukamuhabwa et al., 2015,p.8).
Although recent academic studies have highlighted the importance of SCR (e.g. Brandon-
Jones et al., 2014;Stone and Rahimifard, 2018;Pettit et al., 2019), the COVID-19 pandemic
provided a brand new research setting that zoomed-in on organizations’abilities to deal with
the devastating effects of disruption. Building SCR presupposes that firms can quickly
recover from a disruptive event, either by returning to normality or progressing to an even
better state of operational performance (Mandal, 2012). Firms with a flexible and resilient
supply chain have already shown an ability to bounce-back from the disastrous effects of the
COVID-19 pandemic (Choi et al., 2020).
But how can a firm support its supply chain resiliency while building its expertise? Can a
higher level of expertise mitigate the operational risks of a disruptive event? One body of
academic literature that can offer useful insight to answer these questions is from the field of
IC. For example, a firm that leverages highly collaborative relationships with its key suppliers
and customers (i.e. relational capital), while administering a well-integrated business process
(i.e. structural capital), and provides its employees with state-of-the-art skills and abilities (i.e.
human capital) may have a more resilient supply chain which might allow it to mitigate the
negative impact of a massive disruption such as the COVID-19 pandemic. Unfortunately, the
extant academic literature is void of any examination of how IC may support a firm’s SCR,
especially during a period of massive disruption.
The present study fills the void in the literature by examining the processed food sector of
Pakistan. Pakistan’s two neighboring countries (i.e. Iran and China) were among the earliest
epicenters of the COVID-19 pandemic. Traveling pilgrims coming from Iran became the
major source of how the coronavirus spread into Pakistan with the first confirmed case
reported on February 26, 2020. This grew to 1,526 reported cases of COVID-19 by 29 March
2020 and 15,525 cases by April 29 2020 [1]. Pakistan is among the most severely affected
nations within South Asia. Furthermore, the socioeconomic status of Pakistan is quite
homogenous to other South Asian nations such as India, Bangladesh, and Sri Lanka which
make the findings in Pakistan generalizable to these other nations with some limitations.
It is generally quite difficult to collect data during a pandemic. In this case, it was quite
challenging to gather survey responses from a large number of companies amid the crisis. It
was for this reason that one of the largest sectors in the Pakistani economy was targeted.
After the textile sector, the processed food sector is the largest contributor to Pakistan’s GDP
attracting $224 million (on average annually) in foreign direct investment from 2012 to 2018
(State Bank of Pakistan, 2019). The demand for processed food products witnessed an abrupt
spike just after the announcement of the first COVID-19 case in Pakistan. Against this
backdrop, data was collected and analyzed from 159 processed food firms. The objective of
the study was to investigate the role that SCR played in the firm’s learning capability, given
various levels of IC.
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