Strategic environment and intellectual capital of Indian banks
| Published date | 16 January 2009 |
| Date | 16 January 2009 |
| Pages | 109-120 |
| DOI | https://doi.org/10.1108/14691930910922932 |
| Author | Harjinder Singh Deol |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Strategic environment and
intellectual capital of Indian
banks
Harjinder Singh Deol
Haskayne School of Business, University of Calgary, Calgary, Canada
Abstract
Purpose – This paper aims to propose that the development and use of intellectual capital (IC)
elements by firms is contingent on the effect of the strategic environment on them.
Design/methodology/approach – The paper is a case study of the Indian banking industry, and
considers how different banks responded to deregulation and industry reforms in terms of developing
and exploiting their IC.
Findings – Government-, private- and foreign-owned banks used and developed different elements of
IC (structural, human and relational capital) in response to the change in their strategic environment
due to the reforms. These responses appear to be contingent on firm history and the initial
endowments of IC.
Research limitations/implications – A reliance on print archival sources and context specificity
limits the generalizability of the findings.
Practical implications – The paper complements Kamath’s cross-sectional estimation of VAICein
the Indian banking industry, and seeks to introduce consideration of the strategic environment of
firms.
Originality/value – The paper is one of the first systematic studies on the post-liberalization
strategies of banks in India, an important emerging economy.
Keywords Intellectualcapital, Human capital, Business environment,Banks, India
Paper type Case study
Introduction
The institutional and regulatory environment of an economy and the nature and pace
of institutional transition occurring both within it and globally forms the strate gic
environment in which firms must operate. Regulatory change may be one of the means
of effecting a fundamental institutional transition (Peng, 2003) in the strategic
environment in which firms operate. In most emerging economies, regulatory chan ge is
structured to facilitate a three-pronged agenda:
(1) liberalization of the economy by rationalizing bureaucratic controls;
(2) privatization of industry, trade and commerce; and
(3) encouraging globalization by lowering tariffs and removing restrictions on the
international flow of capital, goods and services.
In this paper, I suggest that the process of intellectual capital (IC) development and
exploitation by firms is contingent on their strategic environment. A case study from
the Indian banking industry is provided as an example. The case study is based on
material from approximately 450 newspaper articles and reports, located through
electronic search from FACTIVA
w
, an online archive of Dow Jones Reuters Business
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
Intellectual
capital of Indian
banks
109
Journal of Intellectual Capital
Vol. 10 No. 1, 2009
pp. 109-120
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930910922932
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