The role of intellectual capital on entrepreneurial opportunity recognition among SMEs in the Sultanate of Oman
| DOI | https://doi.org/10.1108/JIC-05-2020-0177 |
| Published date | 25 February 2021 |
| Date | 25 February 2021 |
| Pages | 816-839 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Syed Abidur Rahman,Golam Mostafa Khan,Salem AlAbri,Seyedeh Khadijeh Taghizadeh |
The role of intellectual capital on
entrepreneurial opportunity
recognition among SMEs in the
Sultanate of Oman
Syed Abidur Rahman, Golam Mostafa Khan, Salem AlAbri and
Seyedeh Khadijeh Taghizadeh
College of Economics and Political Science, Sultan Qaboos University, Muscat, Oman
Abstract
Purpose –This study aims to investigate the role of the components of intellectual capital (IC) on
entrepreneurial opportunity recognition among small and medium enterprises (SMEs) in the Sultanate of
Oman. The interrelationships of these components are also examined.
Design/methodology/approach–The study used quantitative research methods. Data were collected using
structured questionnaires from a sample of 347 respondents from SMEs operating in Oman. Structural
equation modeling was employed to examine the hypotheses using partial least square technique.
Findings –The analysis results demonstrate that structural capital, relational capital and spiritual capital
have significant relationships with entrepreneurial opportunity recognition. Meanwhile, human capital has no
relationship with either entrepreneurial opportunity recognition or spiritual capital. Intriguingly, significant
interrelationships are observed among IC’s components.
Practical implications –This study offers useful managerial implications for the related parties: firms,
public institutions and other stakeholders. The findings could be a guideline for SME managers/owners to
recognize the right entrepreneurial opportunity.
Originality/value–To the best of our knowledge, this study is the first to reveal the relationships between the
tripartite model of IC and entrepreneurial opportunity recognition. This study is also the first to test the
interrelationship of spiritual capital on other intellectual components.
Keywords Intellectual capital, Human capital, Structural capital, Relational capital, Spiritual capital,
Entrepreneurial opportunity recognition, SMEs, Oman
Paper type Research paper
1. Introduction
The shift towards a knowledge-based economy has prompted the predominance of
intellectual capital (IC) as a key resource for any type of firm across global boundaries (Bontis,
2001;Marr et al., 2003;Mart
ın-de-Castro et al., 2011;Khalique et al., 2020). Consequently, IC
has gained much attention among researchers and has become a vibrant research topic in
the business and management field in recent times (Bontis et al., 2018;Demartini and
Beretta, 2020).
IC explains the intangible resources possessed by a firm. IC comprises several capitals,
like human capital, structural capital, relational capital and spiritual capital (Ahmed et al.,
2019;Bontis, 2001;Demartini and Beretta, 2020;Mart
ın-de-Castro et al., 2011).
Several studies reveal IC’s instrumental role in a firm’s performance, for example, Firer
and Williams (2003),Clarke et al. (2011),Bontis et al. (2018),Mart
ın-de Castro et al. (2019) and
Demartini and Beretta (2020). Few scholars have also noted a significant association between
IC and specific aspects of entrepreneurship or entrepreneurial activities, where IC or its
JIC
23,4
816
Funding: This research is funded by Sultan Qaboos University. Project Grant number: IG/EPS/MNGT/
19/01.
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 29 May 2020
Revised 5 August 2020
9 October 2020
27 November 2020
7 January 2021
27 January 2021
Accepted 8 February 2021
Journal of Intellectual Capital
Vol. 23 No. 4, 2022
pp. 816-839
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-05-2020-0177
dimensions are considered as strategic resources of firms (Crupi et al., 2020). However, the role
of entrepreneurial opportunity recognition, specifically for small and medium enterprises
(SMEs), is also a significant issue that requires deeper attention (Sambasivan et al., 2009).
In this respect, identifying opportunities is an essential prerequisite for entrepreneurial
actions (Ramos-Rodriguez et al., 2010).
Entrepreneurial opportunity recognition is a vital constituent of foundational
entrepreneurship research and has become a key topic in the modern entrepreneurship
literature (George et al., 2016). According to Eckhardt and Shane (2003), entrepreneurship
encompasses trailing an opportunity irrespective of the resources or capabilities (like IC)
presently at hand. Shane (2000) also argued that prior knowledge is a decisive factor for
recognizing opportunities. Past literature suggests that understanding when, why and
how opportunities come into existence is a fundamental research outcome in
entrepreneurship (Shane and Venkataraman, 2000). Plummer et al. (2007) hinted that the
sources of opportunity have always been a pertinent line of enquiry for scholars.
Nevertheless, scholars are yet to know acutely why some individuals can recognize
opportunities, while others cannot (George et al., 2016).Along these lines, Sir mon and Hitt
(2003) and M€
uller and Korsgaard (2018) argued that the possession and combination of
right resources (tangible and intangible) would enable individuals to recognize
entrepreneurial opportunities. Based on these theoretical notions, this study asserts
that intangible resources, like IC, play an important role in entrepreneurial opportunity
recognition among SMEs.
SMEs are widely recognized as the backbone of any country’s economy. SMEs play a vital
role in socio-economic development (Hooi et al., 2016;Rahman et al., 2015). Despite SMEs’
importance in the economy, little attention has been given to SMEs by IC scholars (Demartini
and Beretta, 2020). A recent meta-analysis indicates that the contribution of IC to
entrepreneurship is still being investigated (Crupi et al., 2020). In the field of IC, Bontis (2001)
theorized the interrelationship among IC’s components. However, such an important
proposition has neither been quantified nor validated yet in a comprehensive manner. Earlier
studies suggest that IC can have a fragile structure and the elements of IC, for example,
human capital, structural capital and relational capital, are independent but interrelated
(Chen et al., 2004). However, there is a lack of evidence on how these IC dimensions might be
influenced by other intangible resources, like spiritual capital, which are possessed by
individuals.
In several studies, spiritual capital has been considered as a dimension of IC (Khalique
et al., 2020;Abdullah and Sofian, 2012;Hashim et al., 2015). As a theology, spiritual capital
plays a significant role in shaping business activities (Khalique et al., 2020). In some
economies, where institutional infrastructure for business activities is at the development
stage, entrepreneurs tend to rely on values, norms and beliefs to conduct business
transactions (Webb et al., 2009), which in turn come from spiritual capital (Berger and
Redding, 2010). Spiritual capital is potentially important. However, the dynamics of spiritual
capital and its influence on entrepreneurial activities remain obscure. Therefore, scholars
have called for the expansion of research on how spiritual beliefs may be associated with
other intangible resources in the organization (Miller, 2015).
However, little is known about the IC in the Gulf region, particularly in the Sultanate of
Oman, where religious belief is an integral part of social and economic activities. Oman was
mostly dependent on oil. Further, the citizens used to enjoy the benefits of having a Petro-
dollar. Like other nations in the Gulf Cooperation Council (GCC), Oman has also been
adversely affected by the fall in oil prices over the past several years. In such a continuing
situation, Oman has taken up initiatives to diversify the economy and realign its focus with a
greater thrust towards entrepreneurship development. The country has decided to transform
its economy into a knowledge-based economy from a petroleum-based economy. The
Entrepreneurial
opportunity
recognition in
Oman
817
To continue reading
Request your trial