The effect of IC components on innovation performance in Serbian companies

Publication Date13 August 2018
Pages448-466
Date13 August 2018
DOIhttps://doi.org/10.1108/VJIKMS-06-2016-0033
AuthorSladjana Cabrilo,Aino Kianto,Bojana Milic
SubjectInformation & knowledge management,Knowledge management,Knowledge management systems
The eect of IC components on
innovation performance in
Serbian companies
Sladjana Cabrilo
Department of International Business Administration,
I-Shou University, Kaohsiung City, Taiwan
Aino Kianto
School of Business and Management, Lappeenranta University of Technology,
Lappeenranta, Finland, and
Bojana Milic
Department of Industrial Engineering and Management,
Faculty of Technical Sciences, University of Novi Sad, Novi Sad, Serbia
Abstract
Purpose In investigating the linkagebetween intellectual capital (IC) and innovation,it is important not
only to explore how IC as a whole is associatedwith organizationsinnovative performance but also to gaina
deep understanding of the role of different IC components (groups of intangibles)in companiesinnovation
performance,which is the purpose of this paper in the context of Serbian companies.
Design/methodology/approach This research is based on survey data collected from 100 Serbian
companies with at least 100 employees during 2014/2015. Six IC components were analyzed (human, structural,
internal relational, external relational, renewal and entrepreneurial) in terms of their effect on innovation
performance. Analyses were conducted using structural equation modeling and correlation analysis.
Findings Findings demonstratethat renewal capital, internal relationalcapital and structural capital have
statisticallysignicant positive effects on overallinnovative performance in Serbian companies.
Practical implications The outcomes reveal potential and barriers within IC that are crucial to
innovation performance in Serbian companies. In this way, this study enables a deeper understanding of
intangible drivers of innovation and highlights possibilities to foster intangible innovation potential in
Serbian companies.
Originality/value As context (economicand cultural) has emerged as a relevant factor in researching IC,
this study is original in investigating IC effect on innovation within the Serbian business environment.
Additionally,the broad sexpartite taxonomy of IC contributes to a wider understandingof knowledge and its
linkagesto innovation.
Keywords Serbia, Intellectual capital, Innovation performance, IC components
Paper type Research paper
1. Introduction
Nowadays, an organizations value creation and competitiveness are largely based on
intellectual capital (IC) (Bontis, 1998;Sveiby, 1997; World bank, 2005; Edvinsson and
Malone, 1997;Stewart, 1997;Marr and Schiuma, 2001;Lerro et al.,2014;Inkinen, 2015) and
organizational ability to innovate (Van de Ven, 1986;Cohen and Levinthal, 1990;Hamel,
1998)[1]. Therefore, IC and innovation, as well as the link between IC and innovation, have
gained more prominenceamong academics and practitioners.
VJIKMS
48,3
448
Received12 June 2016
Revised19 February 2017
Accepted3 April 2017
VINEJournal of Information and
KnowledgeManagement Systems
Vol.48 No. 3, 2018
pp. 448-466
© Emerald Publishing Limited
2059-5891
DOI 10.1108/VJIKMS-06-2016-0033
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2059-5891.htm
IC is a bundle of intangibles (Nahapiet and Ghoshal, 1998;Bontis, 1998;Sveiby, 1997)
such as organizational knowledge, skills, experience, technology and relationships that
make a rm competitive in the market (Edvinsson and Malone, 1997). As it contains
different types of intangibles, IC taxonomy has been largely discussed in the literature.
Following the early conceptualization of IC in the late 1990s (Edvinsson and Malone, 1997;
Sveiby, 1997;Bontis, 1998), a number of scholars generally consider three primary
interrelated IC components: human capital, structural capital and relational capital
(Meritum, 2002;Marr, 2004). While three-dimensional IC taxonomy has been established as
an emergent standard (Inkinen, 2015), there is still some debate on what IC actually
encompasses (Mention and Bontis, 2013). Additional IC components such as renewal,
entrepreneurial capital, social and trust capital have surfaced in the academic literature
(Kianto et al.,2014;Kianto,2008;Erikson, 2002;Dost et al., 2016).
Innovation is one of the most commonly mentioned concepts in social science(Sveiby
et al., 2009,p.2).Denitions of innovation, such as any though, behavior or thing that is
new because it is qualitatively different from existing forms(Barnett, 1953, p. 7), the
commercial exploitation of good ideas that meet unmet needs (Wolfe, 1994;Tidd and
Bessant, 2009) and putting ideas into action(Cabrilo and Grubic-Nesic, 2012, p. 213) and
creative applicationof knowledge in a new form(Cavagnoli, 2011, p. 111) already allude to
the association of innovation with knowledgeand IC. In the literature, most studies provide
evidence for the tight link between IC and innovation performance of an organization
(European Commission, 2006;Inkinen et al., 2014a,Lerro et al., 2014;Subramaniam and
Youndt, 2005;Teece, 2007;Dumay et al.,2013). This link has been tested in many different
contexts including regions such as Europe (Campanella et al.,2014), countries such as
Finland (Inkinen etal., 2014a), Thailand (Mathuramaytha, 2012), and Japan (Takayuki, 2008;
Sumita, 2008), specic industriessuch as information and communication technology (ICT)
(Wang and Chingfu, 2005), and health-care (Peng et al.,2007;Santos-Rodrigues et al.,2013)
and specic types of enterprises such as social enterprises(Kong, 2010). Furthermore, some
studies have examined the role of IC in producing different types of innovation, such as
incremental and radical innovations (Subramaniam and Youndt, 2005;Darroch, 2005), or
more precisely how categories of IC contribute to managersperceptions on radical,
evolutionary andincremental innovation (Dumay et al.,2013).
To provide insights into the factors promoting innovation, some studies have
investigated the effect of particularintangibles or a selected component of IC on innovation
performance. For example, while Cabello-Medina et al. (2011),Cabrilo et al. (2014),Wu et al.
(2007),Marvel and Lumpkin (2007) and Alpkan et al. (2010) have investigated the linkage
between human capital and innovation performance, Delgado-Verde et al. (2011) shed some
light on the effect of structuralcapital on the overall innovation performance.
The common nding seems to be that the IC dimensions are highly interrelated and
increase the likelihood of a rms betterinnovation performance (Cabello-Medina et al., 2011;
Leitner, 2011;Hsu and Sabherwal, 2012;Mathuramaytha, 2012). However, some studies
have made a distance from a mainstream literature, criticizing the success bias associated
with innovation (Sveiby et al., 2012) and questioning the contribution of all IC elements to
different types of innovationperformance (Dumay et al., 2013;Sveiby et al.,2009).
Therefore, this paper aimed to test and analyze how various components of IC affect
innovation performance in the Serbian businessenvironment. The purpose is to develop an
understanding of innovation performance and its association with different IC components
to enable Serbian companies to link their innovation strategies with IC and promote a
greater likelihoodthat innovation will be successful.
Eect of IC
components
449

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