The role of intellectual capital in fostering SD-Orientation and firm performance
| DOI | https://doi.org/10.1108/JIC-11-2019-0262 |
| Published date | 30 April 2020 |
| Pages | 57-75 |
| Date | 30 April 2020 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
| Author | Helena Alves,Ignacio Cepeda-Carrion,Jaime Ortega-Gutierrez,Bo Edvardsson |
The role of intellectual capital in
fostering SD-Orientation and
firm performance
Helena Alves
Department of Management and Economics, University of Beira Interior,
Covilh~
a, Portugal
Ignacio Cepeda-Carrion and Jaime Ortega-Gutierrez
Department of Business Administration and Marketing, University of Seville,
Sevilla, Spain, and
Bo Edvardsson
Karlstad University, Karlstad, Sweden
Abstract
Purpose –This research aims to understand the relationship among Intellectual Capital (IC), Service
Dominant Orientation (SD-Orientation) and firms performance.
Design/methodology/approach–A model conceptualizing the relationship among the three constructs was
tested through structural equation modelling on a sample of 101 firms from SABI Spanish database.
Findings –The results confirm the influence of IC, in all of its dimensions, on SD-Orientation and of SD-
orientation on performance. Furthermore, the results show that SD- Orientation fullymediates the relationship
between IC and performance, except for relational capital that by itself also directly influences financial
performance.
Research limitations/implications–Data is limited to a sample of only one country and 101 services firms.
Therefore, future studies should be carried out with samples from other countries.
Practical implications –The main results show HC, relational capital and SC are a great influence and
antecedent on SD-Orientation, therefore, as an implication, firms need to take care of the several components
(human, structural and social) of IC in order to become more service oriented, something that will allow them to
achieve a better performance.
Originality/value –Until know there was no other study testing the influence of IC on SD-Orientation,
therefore this study contributes to understand SD-orientation and the necessary resources to operationalize it,
including the links to financial performance.
Keywords Intellectual capital,SD-Orientation, Service orientation, Performance, Relational capital, Structural
capital, Human capital
Paper type Research paper
Introduction
According to Service-Dominant logic (SDL), introduced by Vargo and Lusch (2004), value co-
creation is the result of resource integration and service exchange carried out by actors within
service ecosystems facilitated by institutions and institutional arrangements (Vargo and
Lusch, 2016,2017). All actors exchange service for service [with service defined as the
application of resources (competences, skills and knowledge) to make changes that have
value for another (Spohrer and Maglio, 2008, p. 7)], such that competences, organizations,
money, products and networks are mere intermediaries in these processes (Vargo and Lusch,
2008b). In this line of thinking, all economies are service economies, because exchanges in all
of them are specialized competences.
Karpen et al. (2011), in an attempt to connect SD-Logic developed by Vargo and Lusch
(2004,2006,2008c) to practice, developed a framework and a scale to measure it entitled S-D
Orientation, which according to them represents “a set of strategic capabilities that enable an
Intellectual
capital and
SD-Orientation
57
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 14 November 2019
Revised 14 February 2020
Accepted 23 March 2020
Journal of Intellectual Capital
Vol. 22 No. 1, 2021
pp. 57-75
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-11-2019-0262
organization to concrete value in service exchanges”(Karpen et al., 2011, p. 1). According to
the FP7, which proposes that “Actors cannot deliver value but can participate in the creation
and offering of value propositions (Vargo and Lusch, 2016, p. 10), firms need to be Service
Dominant (SD) oriented (Karpen et al., 2011) in order to be able to propose value propositions.
However, in order to achieve the capabilities needed for a firm to become SD-Oriented, the
firm is dependent on its own and others’resources (Lusch and Vargo, 2014;Vargo et al., 2017).
These resources are generally classified as operand (i.e. tangible, static resources that require
some action on them to become valuable, such as physical objects) or operant (i.e. usually
intangible, dynamic resources that can create value, such as physical and mental capacities,
energy or knowledge) (Arnould et al., 2006;Constantin and Lusch, 1994;Vargo and Lusch,
2008b). Operant resources are not exhaustible but rather are scalable, re-useable, renewable
and creatable, which means competition is a question of creating knowledge and applying it
in support of the service supply (Lusch et al., 2007). Thus, operant resources, those capable of
acting upon other resources, such as knowledge and skills, became the foundation stone for
competitive advantage (nowadays designated as strategic benefit (Vargo and Lusch, 2016).
However, a resource does not have value in itself. It depends on human appraisal and the
availability of other resources that can be combined to have or generate value (Lusch and
Vargo, 2014;Vargo et al., 2008a;Zaim et al., 2019). According to Zigan et al. (2008), a firm can
coordinate, orchestrate and deploy its knowledge resources to create value through its
intellectual capital (IC).
IC equals the sum of human capital (HC) (knowledge, education, creativity, etc.),
organizational capital (OC) (culture, structure, organizational learning, etc.) and relational
capital (RC) (relationships between firms) (Pedro et al., 2018) and represents the sum of all
intangible assets (knowledge, capabilities, skills, etc.), which combined with tangible capital
contributes to organizations’success (Mart
ı, 2007), generates value-added and improves
performance (Marr,2004).
Therefore, we propose that IC influences SD-Orientation, which influences firms’
performance. Calls for empirical studies on service orientation, firm processes and the
resulting performance outcomes are a service research priority (Ostrom et al., 2015).
Chou, Huang and Lin (2018) and Buenechea-Elberdin et al. (2018) found that HC was
related to frontline service employee innovative behaviour, and Kianto et al. (2010)
found that service-oriented firms possess more HC. Madhavaram and Hunt (2017) also
found that HC makes firms more capable of and effective in customizing their offerings.
However, so far no other studies have analysed the interdependences between IC, SD-
Orientation and firm performance. This empirical study focuses on this knowledge gap,
thus contributing to the ongoing discussions on the future of service research and the
drivers of firm performance.
The aim of this study is to extend understanding of the antecedents of service
orientation and its consequences, more specifically explain firms’service-oriented
capabilities and financial performance (FP). In particular, we add to the study by Karpen
et al. (2011,2015), which only studied the relationship between service orientation and
performance by introducing the IC construct as an antecedent of service orientation. We
contribute to S-D Logic research, showing empirically that IC is needed to enable business
actors (firms) to access and use resources in order to co-create value for themselves and
others Carrillo et al. (2019). The paper also contributes to the emerging field of IC research
by explaining how IC enables the realization of certain capabilities in practice, including
firms’FP. The paper also contributes with lines for further research on service-dominant
orientation.
The rest of the paper is structured as follows: first, a review of the research on service
orientation and IC is carried out, as the basis for formulating hypotheses; second, methods for
the empirical study; third, the results of the empirical analysis and fourth, the research
JIC
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