Proceedings of the 2nd Advances in Business Research International Conference by Fauziah Noordin Abdul Kadir Othman & Erne Suzila Kassim

Author:Fauziah Noordin, Abdul Kadir Othman & Erne Suzila Kassim
Language: eng
Format: epub
Publisher: Springer Singapore, Singapore

18.2.2 Intellectual Capital

Intellectual capital (IC) is reflected as the heart of a knowledge-based economy (Khalique et al. 2013). Although intellectual comes from the word intellect (which means pure intellect), the founder of IC, John Kenneth Galbraith in 1969 presumed it as a degree of intellectual action. The most widely used definition of IC is “knowledge that is of value to an organization”. The definition suggests that the management of knowledge (the sum of what is known) creates IC. The main elements of IC are human capital, structural capital, and customer capital (Bontis et al. 2000). It was found that firms with high intellectual capital inherently have strong resources, which are the sources of sustained competitive advantage, as compared to firms with low intellectual capital, or firms, which possess high intellectual capital in only human, structural, and customer capital. This is due to the fact that firms which possess all the intellectual capital components are endowed with more strength to compete in the business as compared to those which possess only a single intellectual capital resource (Amrizah and Rashidah 2013).

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