Intellectual Capital and Sustainable Organizational Performance in Banking Sector of Pakistan: Examine the Mediating Role of Organizational Innovation

Abstract

Purpose: 21st century witnesses a great shift from production-oriented businesses to knowledge oriented and technology-driven businesses, where intangible resources play a pivotal role in value creation for the organizations. In this dynamic intellectual capital   and competitive environment, global economy is shifting from a tangible resource economy to an intangible resource economy. The aim of this study was to investigate how the intellectual capital components and organizational innovation influence sustainable organizational performance. Design/Methodology/Approach: A survey was conducted to collect data from the banking sector professionals working in Pakistan. Simple random technique was employed, 329 responses were collected. The data was analyzed through SmartPLS. Findings: Results reveals that intellectual capital components have positive and significant association with organizational innovation and sustainable organizational performance. Current study also demonstrates the partial mediation of organizational innovation between the association of intellectual capital components and sustainable organizational performance. Implications/Originality/Value: It is concluded that intellectual capital and its components help the organizations to enhance their organizational innovation, which would ultimately boost sustainable organizational performance. Current study findings would provide useful insights for researchers, managers, and practitioners.