Intellectual capital and innovation on organizational performance

Abstract

Intellectual capital is recognized as a key asset for organizational performance. It is also the key driver of competitive advantage in today’s knowledge based economy. However, intellectual capital can only create value to organizations when knowledge embedded in it is exploited. Many researchers have stated that management of intellectual capital is about managing and leveraging knowledge embedded in the assets. Proper management of intellectual capital is critical in enhancing organizational performance because it creates value. Today, innovation is considered as a necessity for every organization due to the terminating competition in market, globalization and rapid development. Many researchers stated that intellectual capital and innovation is a vital asset that helps organizations to create value in present economic syndrome and enables the organizations to be innovative. The purpose of this paper is to research the impact between intellectual capital and innovation on organizational performance. The main contribution of this study is to investigate the impact of intellectual capital and innovation on organizational performance of universities in Malaysia.