INTELLECTUAL CAPITAL DRIVEN PERFORMANCE: ROLE OF INNOVATIVE PERFORMANCE AND BUSINESS PROCESS CAPABILITIES

CITATION

Rehman, W., Ahmad, A., Bashir, F., & Azeem, S. (2017). INTELLECTUAL CAPITAL DRIVEN PERFORMANCE: ROLE OF INNOVATIVE PERFORMANCE AND BUSINESS PROCESS CAPABILITIES. Pakistan Economic and Social Review, 55(1), 223–246

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ABSTRACT
Theory of resource based view (RBV) postulates intangible resources as strategic resources which tend to provide sustainable competitive positioning for a firm to survive in a fast-paced highly dynamic market place. This study attempts to demonstrate the impact of intangible resources i.e. intellectual capital (IC) resources on firms’ performance. Further, the paper also aims at specifying the optimal mediating mechanism for IC driven performance in the presence of business process capability and innovative performance as intermediate measures. Using the key informant approach a survey was conducted and a valid sample of 660 middle and senior level employees was considered for analysis. Convergent and discriminant validity is examined by observing the values of loadings and average variance extraction (AVE) before proceeding for further model estimation. However, fitness of the model is examined through observing the values of absolute, incremental and parsimonious fit measures using confirmatory factor analysis (CFA). The results of the study imply that IC’s components not only directly affect the performance but it also indirectly influences the performance through business process capability and innovative performance. Based on the findings of the study, this piece of effort suggests that managers need to explore more intellectual resources in order to align the business process capability and innovative performance for superior performance outcomes.


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