Intellectual Capital and Organizational Performance in a Competitive Business Environment: A Review

Abstract

This paper aims at determining the imperative of intellectual capital on organizational performance. The paper reviewed empirical studies to confirm the effect of intellectual capital on organizational performance. The paper gathered information through journals, conference papers, books, thesis and working paper. Findings from several empirical studies indicate that intellectual capital has significant influence on organizational performance. Furthermore, it was discovered that human capital, structural capital, and relational capital are the three significant dimensions of intellectual capital that drives organizational performance. The paper concludes that intellectual capital plays a pivotal role in the pursuit and achievement of organizational performance, and that the synergy among the three dimensions of intellectual capital is instrumental to this organizational performance. The paper therefore suggests that Managers should use intellectual capital as a strategic approach in the pursuit and achievement of their organizational performance in a competitive business environment, and that they should ensure balance among human capital, structural capital, and relational capital.