Organizational knowledge assets

and innovation capability

Evidence from Spanish manufacturing rms
Miriam Delgado-Verde, Gregorio Mart n-de Castro and
Jose Emilio Navas-Lopez
Departamento de Organizacion de Empresas,
Facultad de Ciencias Economicas y Empresariales,
Universidad Complutense de Madrid, Madrid, Spain
Abstract
Purpose Organizational knowledge assets are key organizational factors responsible for rm
innovation, as well as effective management. Traditionally, a good piece of research takes the
innovation processes from an external perspective, leaving aside the internal complexity that
characterizes innovation dynamics. Nevertheless, the innovation capability of a certain rm depends
very closely on the intellectual assets and organizational knowledge that it possesses, as well as on its
ability to deploy them. In this sense, this paper aims to test empirically the relationships between
organizational knowledge assets and the innovation capability of the rm.
Design/methodology/approach The data collection was carried out through a questionnaire on a
sample of 251 Spanish high and medium-high manufacturing rms. Exploratory and conrmatory
factor analyses and multiple linear regressions were also used.
Findings Based on the literature review, this work explores the nature and measurement of
organizational capital as well as its role on innovation performance in high and medium-high
manufacturing rms.
Practical implications This paper proposes a theoretical and empirical model of technological
innovation that, based on organizational knowledge assets, highlights the importance of culture and
CEO commitment towards innovation, as well as the role played by communication and information
technologies (CITs) applied to management on product innovation capability within high and
medium-high manufacturing rms.
Originality/value The scarcity of empirical works analyzing the innovation phenomena from an
internal point of view adds value to the current academic literature, specically from an intellectual
capital-based view.
Keywords Organizations, Knowledge management, Assets, Intellectual capital, Product innovation
Paper type Research paper
1. Introduction
During the last years, research about the role of knowledge in rm activities and value
creation has been one of the most fruitful topics within the business management eld.
The knowledge-based view has highlighted the relevance of knowledge as a key
organizational factor (Zack, 1999; Darroch, 2005), considering it as one of the main
determinants for the existence of the rm.
Nevertheless, previous approaches such as the resource-based view (Wernerfelt,
1984; Barney, 1991, 2001; Peteraf, 1993) or parallel research streams as the dynamic
capabilities approach (Teece et al., 1997) have also emphasized the role that intangible
The current issue and full text archive of this journal is available at
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Knowledge
assets and
innovation
5
Journal of Intellectual Capital
Vol. 12 No. 1, 2011
pp. 5-19
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691931111097890
resources and organizational capabilities, which are based on knowledge, play in
building robust competitive advantages.
As Galende and De la Fuente (2003) point out, a good piece of research takes the
innovation processes from an external perspective, leaving aside the internal
complexity that characterizes innovation dynamics (Du Plessis, 2007). Besides, it can
be said that the innovative capability of the rm depends very closely on the
intellectual assets and knowledge that it possesses, as well as on its ability to deploy
them (Alegre and Lapiedra, 2005; Chang and Lee, 2008; Subramaniam and Youndt,
2005).
Nevertheless, these approaches pose certain problems (Priem and Butler, 2001) like
the lack of a clear denition for the notion of competitive advantage, or the challenges
and difculties for the identication and measurement of resources and capabilities
that become critical for that competitive advantage. This kind of problems hinders
empirical testing, making difcult to advance towards a consolidated theory. In this
sense, and following the recommendations outlined by Reed et al. (2006), a feasible and
pragmatic solution is to use the so-called intellectual capital-based view.
This theoretical-pragmatic approach is a narrowly focused or specialization of the
resource-based view around those resources or factors with intangible nature that may
become the main responsible for rm success. Starting from practitioners
contributions in the 1990s (Brooking, 1996; Edvinsson and Malone, 1997; CIC, 2003)
distinguishes different blocks of intellectual capital or types of organizational
knowledge stocks. There is some general agreement when depicting the following
main kinds of intellectual capital:
.
human capital, or the knowledge, abilities, experiences and attitudes possessed
by the organizational members (CIC, 2003; Subramaniam and Youndt, 2005);
.
structural capital, which includes those pieces of knowledge that provide
coherence and guidance for the whole organization (Edvinsson and Malone,
1997); and
.
relational capital, emphasizing relationship processes that the rm maintains
with the external agents that surround it (CIC, 2003; Reed et al., 2006).
This work tries to bring some more light on the relations between organizational
knowledge stocks and the processes of rm innovation. To carry out this task, in a rst
section a review of some of the main works that have tried to link intellectual capital or
knowledge and technological innovation is carried out, taking into account that in this
research technological innovation is understood as the successful development of new
products. Later on, based on the literature review, the research hypotheses are
discussed, addressing their empirical test in the results section. Conclusions,
limitations and future research suggestions complete the structure of the paper.
2. Organizational knowledge assets and intellectual and organizational
capitals of the rm
Several denitions of intellectual capital can be found in the literature, but while to
some extent there is certain convergence among these denitions, we can also nd
substantial differences (Hayton, 2005). In general, intellectual capital is a broad-based
term considered synonymous with rm knowledge assets (Tseng and Goo, 2005).
Nevertheless, taking into account that intangible resources and rm capabilities have a
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common essence because they are based on knowledge, or they are simply a form of
knowledge, intellectual capital constitutes a representation of the endowment, domain
or stocks of rm knowledge.
Therefore, if according to the resource-based view these are the ultimate responsible
for the competitive advantage of the rm, analyzing knowledge stocks or intellectual
capital should allow us to determine the possibilities of the organization to generate a
sustainable competitive advantage.
Both academics and practitioners have embraced the intellectual capital perspective
as a useful framework for describing knowledge stocks, and its relation with value
creation. The intellectual capital perspective focuses on how to obtain the maximum
value from intangible assets endowment, so this perspective provides an interesting
bridge between resources and corporate value (Tseng and Goo, 2005), which makes
operative the resource-based view for the case of intangible assets.
To be able to better cope with the challenge of measuring and valuing intellectual
capital, the most comprehensive approaches are models based on a structured
differentiation (Leitner, 2005). Although several taxonomies of intangibles have been
suggested over the past decade, considering the internationally proposed metrics for
intellectual capital, we have found some consensus in the use of intangible assets
classications based on the social character of knowledge (Brown and Duguid, 1991).
This way, intellectual capital is usually classied in three basic components (Hermans
and Kauranen, 2005): human capital, organizational or structural capital, and relational
capital, which represent the most commonly, accepted categories of intangibles (Pike
et al., 2005).
The knowledge tied to the people within the rm is critical for business activities. In
fact, people are hired and red according to the assessment of their knowledge and its
usefulness for the rm tasks. The main characteristic of human capital is the
impossibility of separating this kind of intangible assets from the people that develop
them. When speaking about human capital we are considering an individual capital
that comes to the rm and remains at it by means of employment contracts, which link
the employees with the organization.
The second block of intangible elements presented in the general classication of
intellectual capital is named organizational capital. Most organizations form a
conglomerate of different communities of practice or overlapped and interdependent
work groups (Brown and Duguid, 1991). The relationships among these groups that
integrate the organization make possible the development, starting from independent
and partial contributions, of a series of knowledge based assets or intangible elements
that present an outstanding systemic, integrative, synthetic and synergistic character.
This way, structural capital knits jointly the technical dexterity of the organizational
members (Edvinsson and Malone, 1997), and it includes all the intangible assets that
shape the real rm structure, culture, as well as its internal organizing principles. This
kind of intellectual capital fosters the knowledge ow, and it brings a relevant
improvement in organizational effectiveness through coordination, because it
integrates, in an appropriate way, the different functions of the rm.
Lastly, relational capital gathers those intangible assets that the rm obtains when
it maintains successful relationships with agents of its environment as clients,
suppliers or allies.
Knowledge
assets and
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7
It is widely recognized, in particular from the Resource-based view, that intellectual
capital affects organizational performance and competitive advantage (Wu et al., 2006).
Nonetheless, whereas in management literature, rm value is often explained by
intellectual capital, empirical contributions on these matters are scarce (Hermans and
Kauranen, 2005). Thus, an improved understanding of how intellectual capital
provides sustained competitive advantage is required, deepen into the black box
between intellectual capital, and especially organizational capital, and corporate value
(Tseng and Goo, 2005).
Specically, within organizational capital, this research will be focused in those
intangible factors that could play an important role in achieving innovations. In this
sense, we pay attention to culture and CEO commitment towards innovation as well as
CITs applied to management.
3. Innovation capability
Although the value of tangible assets is generally recognized, managers need to know
how their investments in intangible assets are associated to rm returns (Wu et al.,
2006). The challenge for the users of intellectual capital, whatever it will be managers
or investors, is to make this kind of assets meaningful, connecting them to corporate
goals in order to understand their impacts on nancial returns (Leitner, 2005). Here is
where our model tries to provide the missing link between intellectual capital and value
creation, taking into account rm innovation.
This way, the second part of the model is referred to innovation, which has been a
frequently addressed topic for specialized scientic literature, due to its relevance for
rm survival and success. However, the analysis and understanding of this
phenomenon continues raising debates (Subramaniam and Youndt, 2005). According
to these authors, innovation can be dened as the identication and seizure of
opportunities to create new products, services or processes.
Although the literature (Tushman and Nadler, 1986; Van de Ven, 1986; Hill and
Rothaermel, 2003; Stieglitz and Heine, 2007, among others) recognizes a wide range of
innovation types within the rm (product/process, radical/incremental,
technological/managerial, market pull/technology push, or competence-enhancing/
competence-destroying), most of the empirical works use the product-process typology
of innovation. This research will also employ this kind of typology that classies
innovation types according to the results or outputs of the innovation process, focusing
specically on product innovation, since is one of the most promising areas in the eld
of knowledge management (Corso et al., 2001). This way, according to Nieto (2001),
when new technological knowledge is materialized in the development of new products
or in the improvement of those already existent we are talking about a product
innovation.
4. Hypotheses
The role that organizational knowledge stocks play on the rm capabilities to innovate
through its products constitutes the main argument of this paper. In this sense, once
the theoretical background has been presented, it is necessary to move towards a
specic model. This model is shaped by three basic hypotheses to be tested that will be
commented along this section. Later on, the variables and measurement tools employed
are included, as well as the research resume of the empirical research.
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As has been pointed out previously, from a theoretical point of view there is a very
close relation between knowledge stocks and ows, and the innovation process (Nonaka
and Takeuchi, 1995; D az et al., 2006). Nevertheless, from an empirical point of view, and
excepting pieces of research like that of Subramaniam and Youndt (2005), Darroch (2005)
or Smith and Sharif (2007), the works that have addressed this topic from the
knowledge-based view and the intellectual capital-based view are quite scarce.
Having a brilliant, motivated and experienced human capital should be the base of
all innovation process in the company. Thus, this kind of intellectual capital provides
the main source for developing new ideas and knowledge (Snell and Dean, 1992).
Highly motivated and trained employees workers may question the already
established organizational routines, so this kind of human capital become critical to
push the rm into its technological limits, constituting the best incentive towards
obtaining new knowledge and innovations (Nonaka and Takeuchi, 1995; Hill and
Rothaermel, 2003).
Beyond human capital, or individual knowledge, an important part of the
knowledge, abilities, experiences and behaviors required for the successful
development of new products and services lie inside the own organization. As Van
de Ven (1986) points out, the innovation process in general terms is a collective
achievement of the organizational members, where organizational support becomes a
key element. Institutionalization acts as a mean for preserving organizational
knowledge and routines, which in turn fosters the accumulation, preservation and
improvement of collective knowledge.
Following Tseng and Goo (2005), good organizational capital or organizational
knowledge assets will translate the human dimension innovation into company
property (Pitt and MacVaugh, 2008). For doing so, rms must support and nurture the
brightest individuals to share their innovation, knowledge, and abilities through
organization learning. Tacit issues like managerial commitment, a common identity
and shared vision or a climate of openness and experimentation compose the learning
capability of the rm (Akgun et al., 2007). Nevertheless, although organized
information cannot substitute tacit knowledge, it can signicantly enhance it to ll
existing knowledge gaps, so information technologies can support the transformation
of information into organizational knowledge (Adamides and Karacapilidis, 2006). In
this vein, an effective knowledge management towards product innovation needs take
into account the elicitation and exchange of tacit knowledge as well as explicit and
codied information. Thus, operational processes, information systems, organization
culture, internal organization structure and administrative systems, will have a
positive inuence on the innovative capabilities of the rm. Thus, having databases,
proceeding manuals, effective information systems, or cultural values devoted to
innovation promotion can constitute important sources for innovative success. This
relation appears in the following hypotheses:
H1. The higher organizational capital endowment in the rm, the stronger will be
its product innovation capability.
H1a. Culture and CEO commitment towards innovation within the rm results in
higher product innovation capability.
H1b. The higher utilization of CITs applied to management within the rm, the
higher will be the product innovation capability.
Knowledge
assets and
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9
5. Research design
5.1 Measuring variables
Bearing in mind the purpose of identifying and measuring the different issues of
organizational capital, as well as capturing technological innovation, a literature
review was carried out. As a result, a series of items were designed, and they were used
as the basis for the elaboration of a questionnaire with Likert 1-7 scale, which were
employed for gathering primary data.
This way, organizational capital is the platform or supporting knowledge structure
that allows the coordinated execution of tasks inside the rm. From the literature
review, and taking into account that this study is focused on technological innovation,
we paid attention to two dimensions: on the one hand, culture and CEO commitment
towards innovation (Carmeli and Tishler, 2004; Chen et al., 2004; Subramaniam and
Youndt, 2005; Prajogo and Ahmed, 2006; Akgun et al., 2007; Egbetokun et al., 2009;
among others), and, on the other hand, CITs applied to management (Smith et al., 1994;
Chen et al., 2004; Subramaniam and Youndt, 2005; Akgun et al., 2007; among others).
Innovation outcomes were measured through three items. The rst was devoted to
the number of product innovations implemented by a rm in a certain time (Tsai and
Ghosal, 1998; Souitaris, 2002; among others) because this was the most direct way of
knowing the success of the innovation efforts carried out by the rm. The second item
was based on the percentage of sales with respect to new products against total sales
(Chandy and Tellis, 1998; Souitaris, 2002; Chen et al., 2004; among others). The third
item is related to the number of new products with respect to the rm product portfolio,
with the aim of assessing the product innovation capability of a rm.
Finally, due to the fact that rm size and age, as well as the industry may inuence
rm innovation development, size, age and industry are considered as control variables
(based on Subramaniam and Youndt, 2005; Reed et al., 2006; among others). Size was
measured by means of employees who belong to the rm; age was measured from the
rms establishment; and regarding industry, they were taken into account, on the one
hand, high technology manufacturing rms, and, on the other and, medium-high
technology manufacturing rms.
5.2 Population, sample and information sources
Taking into account the hypotheses arose from the literature review, they were
empirically tested in a set of rms where the intangible resources represent an
important determinant of business competitiveness. In this sense, high and
medium-high technology manufacturing rms of Spain found on the SABI database
were chosen for the eldwork, following the classication system provided by
CNAE-93 codes[1]. This kind of rms has a strong dependence on intellectual capital,
since they are based on knowledge ( Johnson et al., 2002; Leitner, 2005), and they belong
to a homogeneous industry to avoid different effects derived to environmental
characteristics (Rouse and Daellenbach, 1999; King and Zeithaml, 2003). Finally, only
those rms with at least 50 employees were selected to assure the existence of the
different types of intellectual capital, due to the fact that for very small businesses the
different capitals may not clearly be distinguished.
With the aim of collecting data, we designed a questionnaire (seven-point Likert
scale) because secondary sources do not provide enough information about the
valuable and unique competences of a rm, being probably irrelevant (Penrose, 1959).
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Therefore, starting from a literature review related to intangible factors and
innovation, we followed the next steps:
(1) Different questions were collected from several works that used questionnaire
(see section 5.1).
(2) The selected questions were presented to academic experts of our topics in
order to improve them.
(3) A pre-test of 20 rms was carried out to identify mistakes, which did not
appear.
(4) We contacted with top managers by telephone, because they have a wider
vision of their rms, to obtain data.
Thus, at June 2009, we obtained a sample of 251 rms, 43 high technology
manufacturing rms and 208 medium-high technology manufacturing rms, with a
response rate of 17.07 percent and a sampling error of /2 5.5 percent for a 95 percent
of condence level (see Table I).
6. Results
The gathered information was processed through two stages. In the rst one,
exploratory and conrmatory factor analyses were carried out in order to determine
the basic components that can be found in the rms sample regarding organizational
capital and product innovation capability. Next, on a second stage, a multiple
regression model was designed to test the effects of the different assets of
organizational capital on the rm product innovation capabilities.
With the aim of testing the main dimensions included in organizational capital, an
exploratory factor analysis was carried out, using SPSS 17.0. This technique allows us
to synthesize the information contained in wide data set into a limited number of
components that will represent the original variables with a minimum information
loss; nding two factors referred to the two dimensions theoretically considered and
obtaining a 70.109 percent of accumulated variance (see Table II). These results were
obtained by means of varimax orthogonal rotation.
Before carrying out this exploratory factor analysis for organizational capital scale,
the preliminary tests were run: determinant of the matrix, KMO test, and Bartlett test.
Research aim Intellectual capital and innovation
Criteria dening rm population High and medium-high technology manufacturing rms:
Included in the SABI database
Located in Spain
Within 24, 29, 30, 31, 32, 33, 34, 35 CNAE-93 codes
With at least 50 employees
Population 1,270 rms
Sample and response rate 251 rms (17.07 percent)
Method for gathering data Survey (questionnaire)
Answered by top managers
Used statistical software SPSS 13.0 and AMOS 7.0
Table I.
Research resume
Knowledge
assets and
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11
The results of these diagnostic tests can be found in Table II, and they advice to carry
out the factor analysis according to Hair et al. (2004).
This way, the rst component of organizational capital includes six questionnaire
items regarding culture and CEO commitment towards innovation (CCI), which were
quite coherent among them; because they address the way of working and
understanding within the organization with respect to achieve innovations, as well as
its core values. In this sense, issues like the efforts of the employees and managers for
solving problems, the incentives designed for innovative employees, or the sense of
commitment and adhesion to the core values of the rm, explain a 43.710 percent of the
variance.
The second component of organizational capital is focused around CITs applied to
management (CIT) of the rm; including a set of three items referred to IT
competences, which are show through the frequent use of information technologies,
and the level that the rm has reached in its use. This component represents 26.399
percent of the explained variance.
Then, reliability tests for the components of the organizational capital scale are
performed through the Cronbachs alpha coefcients, showing 0.908 and 0.804 for CCI
and CIT, respectively. So, they fulll the reliability analysis of the measurement scale
(Hair et al., 2004).
The next step was to carry out a conrmatory factor analysis using AMOS 7.0, and
the results suggested that the organizational capital model provided a good t for the
Questionnaire items F1 F2
OC2: A common system of values, beliefs and objectives exists in my company,
directed towards innovation 0.864
OC3: My company promotes experimentation and innovation as ways to
enhance processes 0.831
OC5: In my company, managers support and lead the innovation process 0.804
OC1: My company encourages creativity, innovation and/or the development of
new ideas 0.778
OC4: Often, managers involve employees in important decision-making
processes 0.730
OC6: Managers share similar beliefs about the future management of this rm 0.715
OC9: My company prefers to use CIT for communication, co-ordination and
information diffusion 0.910
OC8: My company uses CIT, which allows it to learn from past situations, thus
improving employees learning and experience 0.857
OC7: Much of the rms knowledge of processes, systems and structures is
contained in databases, the intranet, electronic les, etc. 0.632
% of standard deviation 43.710 26.399
Accumulated % 43.710 70.109
Notes: Determinant of the correlation matrix 0.003; Kaiser-Meyer-Olkin index 0.865; Bartlett test
(Chi-squared, gf) 1,441.438 (36); Signication level 0.000
Table II.
Exploratory factor
analysis of organizational
capital
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data, since chi-squares/degrees of freedom ratio was less than 3 (x2=df 2:600);
Goodness of Fit Index (GFI), Adjusted Goodness of Fit Index (AGFI), Incremental Fit
Index (IFI), as well as Comparative Fit Index (CFI) were close to 0.95 (Hu and Bentler,
2000), obtaining GFI 0:950; AGFI 0:906; IFI 0:973; and CFI 0:973; and Root
Mean Square Error of Approximation (RMSEA) was less than 0.08 (Browne and
Cudeck, 1993), obtaining RMSEA 0:075.
Finally, the dependent variable of the model was measured through the scale
devoted to innovation outcomes, which included three items. From another exploratory
factor analysis we can argue the existence of a sole component which was labeled it as
product innovation capability (PIC). The determinant of the matrix, KMO test, and
Bartlett test showed that the exploratory factor analysis was pertinent, and a 91.009
percent of accumulated variance was obtained (see Table III). Also, it shows a
Cronbachs Alpha of 0.951, demonstrating the reliability of the measurement tool.
Once the different dimensions of rm organizational capital have been obtained,
and trying to answer the second question that guides this research, multiple lineal
regressions are carried out in order to analyze the inuence of organizational capital, as
well as its dimensions, on the innovative capabilities of the rm (see Table IV).
As can be seen in the regression model resume and in the variance analysis, both
Durbin-Watson coefcient and Snedecors F show values above the critical values, so
we can conclude that the proposed models are statistically signicant as a whole.
In a more detailed comment, the empirical test of H1a (model 2) shows that CCI
(b 0:486, p , 0:01) has a positive and signicant inuence on product innovation
capability, so such hypothesis is supported. In addition, this model presents an
adjusted R
2
coefcient of 0.229, explaining an important portion of variance in
variable PIC. In the same way, the model 3 shows that H1b is supported, since TICs
(b 0:276, p , 0:01) positively and signicantly inuences product innovation
capability, but obtaining a lower adjusted R
2
coefcient (0.067) than the one of CCI.
With respect to organizational capital as a whole, the model 4, in which are
considered both dimensions of organizational capital, shows that this capital has a
positive and signicant inuence on product innovation capability as well; explaining
a 30.1 percent of the dependent variable variance. Moreover, as it can be seen, the
dimension CCI (b 0:486, p , 0:01) is more important than dimension TICs
(b 0:275, p , 0:01).
Questionnaire items F1
PIC1: In the last three years, the number of product innovations developed by my
company is higher than my competitors 0.958
PIC2: The percentage of sales with respect to new products, against total sales, is
higher than my competitors 0.954
PIC3: In the last three years, the number of new products with respect to my product
portfolio is higher than that of my competitors 0.950
% of standard deviation 91.009
Notes: Signication level 0.000; Determinant of the correlation matrix 0.049; Kaiser-Meyer-Olkin
index 0.775; Bartlett test (Chi-squared, gf) 747.101 (3)
Table III.
Exploratory factor
analysis of product
innovation capability
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13
Regarding control variables, they do not have signicant effects on PIC, only age of the
rm within models 2 and 4.
7. Conclusions
As Hayton (2005) points out, there has been limited research into intellectual capital
and its outcomes. The main contribution of the empirical ndings of this research is
precisely providing evidence that supports that organizational capital is one of the
main sources for rm innovation. Although our results corroborate those of previous
works, there are also some differentiated and valuable characteristics.
First, the theoretical framework adopted is the intellectual capital-based view (Reed
et al., 2006), which until the present date has little empirical support for its main
arguments. In this sense, as the intellectual capital-based view proposes intangible
assets as the source of sustainable competitive advantage, several specic kinds of
competitive advantage have been considered by the previous literature, as corporate
value (Tseng and Goo, 2005), anticipated future sales (Hermans and Kauranen, 2005),
corporate entrepreneurship (Hayton, 2005), or directly rm performance (Wu et al.,
2006). In our case, the competitive advantage has been considered in the shape of
innovation outcomes. Thus, we have tried to provide additional empirical evidence in
testing this research stream, moving from resource-based view of the innovation
process (Pike et al., 2005) towards an intellectual capital-based view of innovation.
Second, exploratory and conrmatory factor analyses show the existence of
different dimensions of organizational knowledge assets or organizational capital. This
issue has received some attention from scholars; however, this research is focused on
those intangible factors, within organizational capital, that could be considered of the
most relevance in order to achieve innovations, considering them within high and
medium-high manufacturing industries.
Product innovation capability
Model 1 Model 2 Model 3 Model 4
Variables (Control variables) (H1a) (H1b) (H1)
CCI 0.486
* *
0.486
* *
(8.708) (9.139)
CITs 0.276
* *
0.275
* *
(4.448) (5.131)
SizeLog 20.017 20.060 20.019 20.062
(20.268) (21.070) (20.314) (21.164)
Age 0.065 0.094
*
0.065 0.093
*
(1.027) (1.682) (1.054) (1.754)
Industry 0.059 0.063 0.013 0.017
(0.931) (1.134) (0.216) (0.325)
Model resume
Adjusted R
2
20.004 0.229 0.067 0.301
T. mistake 1.0022 0.87797 0.96610 0.835599
Durbin-Watson 2.075 2.019 2.074 2.013
F 20.639 19.581
* *
5.463
* *
22.542
* *
Note: Signicance level
*
p , 0:10 (t);
* *
p , 0:01
Table IV.
Results of regression
analyses on product
innovation capability
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Third, the regression analysis provides support for the main thesis of this research
for the selected sample. Thus, as expected, ndings show a statistically positive and
signicant inuence of organizational capital assets on product innovation capability.
In this sense, taking into account the routines and processes of the teams belonging
to a rm, and according to Leiponen (2006), team knowledge is an important source of
competitive advantage because individual competences, which are probably
complementary, allow increasing their value, the achievement of new knowledge
due to their combination. In this way, and following arguments of Akgun et al. (2007),
knowledge transfer among employees, considering communication, interactions,
conversations or discussions, lead to attain product innovations. So, in order to
promote those actions, which are related to CIT because nowadays employees are
usually linked by these technologies, it is important the existence of innovative culture
within the rm (Prajogo and Ahmed, 2006).
However, contrary to Prajogo and Ahmed (2006), who did not nd that incentives
towards innovation results had a direct effect with product innovation, our ndings
show the importance of culture and CEO commitment towards innovation (CCI) in
order to attain product innovations. Therefore, according to Damanpour (1991), who
paid attention to the managerial attitude toward change, it seems necessary the rm
encourages human resources with a proactive attitude to reach this innovation aim.
Specically, managers play an important role in adopting technological innovations,
since they depend on support, leadership and coordination provided by those managers,
being drivers of innovative culture. Thus, in the same way as our results, Llorens et al.
(2005), Elenkov and Manev (2005) and Akgun et al. (2007), paying attention to these kind
of attitudes, found a positive relationship with innovation results.
Moreover, and according to Akgun et al. (2007) and Hegde and Shapira (2007),
shared vision, values or beliefs among employees mean the updating of individual
knowledge, due to the existence of a new ideas and viewpoints acceptance
environment, achieving better product innovation results.
Regarding control variables, only the age of the rm takes importance when
dimension CCI is studied, result that seems to be quite consistent with the nature of
culture and managerial procedures, because it is necessary a long enough period over
which to fully develop.
Finally, it seems interesting that managers pay attention to possible sources
through which can attain product innovations. In this sense, as managerial
implications, this study provides a measurement scale, focusing on the existing
needs (Kaplan and Norton, 2004), in order to make the assessment of organizational
knowledge assets easier. Furthermore, some guidelines are offered about issues related
to organizational capital, which should be taken into account in order to carry out
product innovations within high and medium-high technology manufacturing rms.
In spite of the contributions of this paper, it is necessary to point out its main limitation,
which advice taking our ndings with care, and consider them as tracks, directions or
partial evidence for the hypotheses tested. We must also take into account that the
conducted empirical research has a cross-sectional nature and it has been designed
specially for a certain industry. This implies that our ndings may not be generalized in
industrial or geographically without some caution. It makes sense to think that other kind
of industries or different countries could show other critical elements of organizational or
intellectual capitals as main determinants of the rm innovation activities.
Knowledge
assets and
innovation
15
8. Future research directions
Further research is needed in order to analyze other components of organizational
capital, and in a wider framework, intellectual capital, in other industrial settings, and
also for determining their inuence on product or service innovation. Besides,
longitudinal studies about this topic would provide a better understanding of how
organizational learning takes place, and how it is related to the innovation process.
This systematic evidence may be very useful for both academics and practitioners
interested in using an intellectual capital-based view of innovation. This way, there is
a long way to be walk, because as Park and Kim (2006) suggest, rm knowledge assets
and innovation must be combined into new terms, demonstrating empirically that
managing knowledge, organizational capital, and intellectual capital is crucial for
succeeding in the implementation of innovation based strategies (Liu et al., 2005).
Note
1. CNAE-93 is a classication of Economic Activities elaborated according to the conditions
covered in the implementation regulation of the NACE Rev.1.1. Its objective is to establish a
hierarchical set of economic activities, allowing identifying and classifying different
companies according their executed economic activities.
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About the authors
Miriam Delgado-Verde is Assistant Professor in the Business Administration Department at
Universidad Complutense de Madrid (Spain). She was Research Fellow at the Manchester
Institute of Innovation Research-The University of Manchester during 2008-2009. She is author
and co-author of several papers and books concerning resource-based view, intellectual capital
and knowledge management. Miriam Delgado-Verde is the corresponding author and can be
contacted at: miriamdv@ccee.ucm.es
Gregorio Mart n-de Castro is Associate Professor in the Business Administration Department
at Universidad Complutense de Madrid (Spain). He has several years of research experience at
CIC Spanish Knowledge Society Research Centre, he holds an Expert Diploma in Intellectual
Capital and Knowledge Management by INSEAD (France), and he was Post-Doctoral Research
Fellow at Harvard University during 2004-2005 and the University of Manchester (MI for IR)
during 2009. He is author and co-author of several papers concerning resource-based view,
intellectual capital and knowledge management.
Jose Emilio Navas-Lopez is Professor and Head of the Business Administration Department
at Universidad Complutense de Madrid (Spain). He is author and co-author of several books and
papers concerning technology management, strategy and knowledge management. He has held
the rst Knowledge Management Chair in Spain at IU Eroforum Escorial.
Knowledge
assets and
innovation
19
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