INFLUENCE OF INTELLECTUAL CAPITAL, CRTITICAL SUCCESS

FACTORS OF KNOWLEDGE MANAGEMENT AND INNOVATION ON

ORGANIZATIONAL PERFORMANCE IN MALAYSIA PUBLIC
UNIVERSITIES (PUs)

By:
Mushirah Tharek
Supervisor:
Assoc. Prof . Dr . Saudah Sofian
 PRESENTATION OUTLINE:
 Background of the Study

 Problem Statement

 Research Questions

 Research Objectives

 Significance of the Study

 Literature Review

 Research Framework

 Research Methodology
 BACKGROUND OF THE STUDY
• Importance of education in Universities:

– Critical component of human development worldwide

– Provides high-level skills and training
– Create individuals who develop the capacity and
analytical skills
– University graduates:
• Drive local economies
• Support civil society
• Teach children
• Lead effective governments
• Make important decisions which affects the entire societies.
BACKGROUND OF THE STUDY (cont’d)
PUBLIC UNIVERSITIES IN MALAYSIA

Focused University
Research University
UUM, UPSI, UTHM, UTeM, Comprehensive University
UM, USM, UKM, UPM,
UNiMAP, UMT, UMP, USIM, UiTM, UIA, UMS, UNIMAS
UTM
UNiSZA UMK, UPNM
BACKGROUND OF THE STUDY (cont’d)
 PROBLEM STATEMENT
 Currently, number of public universities (PUs) in Malaysia are rapidly increasing.
 This increase explains that the contemporary economy requires highly educated
community to meet the needs of knowledgeable and highly skilled organization.
 Organizational performance (OP) is important for a successful university.
 OP in universities are evaluated.
 Example:
 Previously, UTM was the 5th among other research university (RU) in Malaysia.
 However, to date, UTM is the highest ranked university in Malaysia which is
coincided with its mission; innovative, entrepreneurial and global. Thus, shows that
implementation of innovation aids in enhanced OP.
 In view of the fact that IC and CsFs of KM have been reported as essential factors in
OP, therefore, improvement of IC and CsFs of KM via innovation is crucial for
enhancing OP.
 Since studies on IC and CsFs of KM via innovation in PUs are scarce, this study will
focus on the impact of innovation of IC and CsFs of KM to improve OP in Malaysia
PUs as the selected organization.
 RESEARCH QUESTIONS
 Does IC and CsFs of KM influence the organizational performance
among the PUs?

 Which of the IC components and CsFs of KM has a strongest effect

on organizational performance among the PUs?

 Does innovation influence the organizational performance among

PUs?

 Is there any relationship between IC, CsFs of KM and innovation

among PUs?

 Which of the IC component and CsFs of KM has the strongest

positive relationship with innovation among PUs?

 Is innovation a mediator between IC components, CsFs of KM and

organizational performance among PUs?
 RESEARCH OBJECTIVES
 To identify the influence of IC and CsFs of KM on organizational
performance among PUs.

 To determine which of the IC components and CsFs of KM has the

highest relationship with innovation among PUs.

 To examine the influence of innovation on organizational performance

among PUs.

 To investigate the relationship between IC, CsFs of KM and

innovation among PUs.

 To determine which of the IC components and CsFs of KM has the

highest relationship with innovation among PUs.

 To examine the mediating role of innovation between IC components,

CsFs of KM and organizational performance among PUs.
 SIGNIFICANCE OF STUDY
 IC and CsFs of KM are important to study because it can make an organization
more efficient and competitive.

 Operation with innovative IC and CsFs of KM can help improve OP through the
ability to generate ideas and use them as stepping stones to manufacture products,
services and better work processes.

 This study can contribute to related parties including public and private universities,
as well as academic and non-academic staff.

 The university management could make this study as a source of reference and
information in designing university activities more effectively and productively,
thus will assist the university in identifying IC and KM in improving the performance of
universities in Malaysia.

 The university management could make this study as a guide in preparing the
policy makers that is more structured and detailed.
 LITERATURE REVIEW

Intellectual
CsFs of KM
Capital

IC KM
Definition
IC Components Innovation Definition CsFs of KM

Innovation Innovation
Relationship between IC and Definition Dimensions Relationship between CsFs of KM
Innovation and Innovation

Impact of IC on OP Impact of Innovation Impact of CsFs of KM

on OP on OP

Organizational Performance

OP
Definition

Innovation as a mediator between IC and CsFs of KM on OP

 LITERATURE REVIEW
Focused Statement Author/s (Year)
Definition Intellectual capital is everything that has been known
of IC and given by individuals to the organization, which is Steward (1997)
supposed to organizational competitive advantage.
Intellectual capital or intangible assets which are Bontis et al. (2000),
Component of IC Sullivan (2002),
Human Capital, Structural Capital, Relational Capital, Ismail (2005), Salina and Wan
and Spiritual Capital. Fazilah (2011)
Strategies and processes of identifying, capturing and
Definition of KM leveraging knowledge in order to aid the organization Yasar et al. (2010)
to compete.
The managerial and organizational factors that need to
be effectively addressed in order to increase the
Theriou et al. (2010),
CsFs of KM profitability of successful KM implementation which
Shahizan and Al-Hakim (2011)
are Human Resource Management, IT, Leadership, Al-Hakim and Shahizan (2012)
Organizational Learning, Organizational Strategy,
Organizational Structure, Organizational Culture.
The process whereby new and improved products,
Definition White and Bruton (2007)
process, materials and services are developed and
Innovation
transferred to market where they are appropriate

Scholars proposed different dimensions for OECD (2005), Niehoff et al.

innovation: Product (Service) or Process; Individual or (2001), Kang and Snell (2009),
Dimensions O’ O’Reilly and Tushman
Organizational; Radical or Incremental; Vertical or (2004), Grancia and Zilibotti
Innovation
Horizontal; and Marketing, Process, Product/Service, (2005)
organizational innovation.
 LITERATURE REVIEW

Focused Statement Author/s (Year)

Karchegani et al. (2013),

Abdullah et al. (2010),
IC influences of organizational performance as
Influence of IC on Bontis et al. (2000),
a key factor for the success in knowledge-
OP Edvinson (1997), Ismail
intensive organizations.
(2005), Roos et al. (2004),
Sullivan 1999)

Theriou et al. (2010),

CsFs of KM influences of organizational Shahizan and Al-Hakim
Influence of CsFs performance as a key factor for the success in (2011), Al-Hakim and
of KM on OP knowledge-intensive organizations. Shahizan (2012)u et al.
(2010Theriou et al. (2010)

Several studies have been confirmed the Aas and Pedersen

influence of different dimensions of innovation (2011), Bowen et al.
Influence of
(radical, incremental, process, product, (2010), Chen and Wang
Innovation and OP
horizontal, vertical) on the organizational (2010), Gunday et al.
performance. (2011), Wang and Wang
(2012)
 LITERATURE REVIEW

Focused Statement Author/s (Year)

Brown (2009), Bontis

The focal point of the studies on IC is disclose of
and Serenko (2009),
Relationship between the characteristics of intangible assets that foster
Laforet (2011),
IC and Innovation and develop innovation and creativity in the
Yitmen (2011)
organizations.

Relationship between The focal point of the studies on CsFs of KM is Theriou et al. (2010),
CsFs of KM and disclose of the factors that critical and develop Shahizan and
Innovation innovation and creativity in the organizations. Al-Hakim (2011)

Edvinson et al.
The major studies on the innovation field, have (2004),
been shifted to analyze how various types of Gracia0Alvarez et al.
Influence of IC on OP
innovation boost organizational performance (2011), Ismail
mediated by Innovation
through human, structural and relational capital (2005), Zschockelt
as three components of IC (2009)

The major studies on the innovation field, have

been shifted to analyze how various types of
Influence of CsFs of KM innovation boost organizational performance Theriou et al. (2010)
on OP mediated by through human resource management, Shahizan and
Innovation information technology, leadership, Al-Hakim (2011)
organizational learning, organizational strategy,
organizational structure and organizational
culture as CsFs of KM
METHODOLOGY

 Research Framework
 Research Design
 Research Hypothesis
 Measurement Variables
 Questionnaire Design
 Data Analysis
 METHODOLOGY

RESEARCH FRAMEWORK
Independent Variables Mediating Variable Dependent Variables

IC:
 Human Capital
Structural Capital
Relational Capital
Spiritual Capital
Innovation: Organizational
Performance
Process
Service Customer
CsFs of KM:
Organizational Internal Business
 HRM Learning and Growth
 Information technology
 Leadership
 Organizational Strategy
 RESEARCH DESIGN
Classification Explanation

Approach Mixed Method

20 PUs:
Population and UTM, UKM, USM, UM, UPM, UITM, UIAM, UMS,
sampling UNIMAS, UUM, UTeM, UTHM, UMT, UMP, UMK,
UDM, USIM, UPSI, UNiMAP and UPNM

Unit of analysis PUs in Malaysia

Deputy Vice Chancellor (R & I)

The respondents Management Lines:
(Staff of HRM, IT, RMC, Bursa and Researchers)

 Distribution of questionnaires to the respondents

Data collection
will be hand to hand or via email
procedures
 Interview will be performed face to face
 METHODOLOGY

RESEARCH HYPOTHESES
No. Hypotheses

H1 IC has a positive and significant impact on OP among PUs

H1a Human capital has a positive and significant impact on OP among PUs

H1b Structural capital has a positive and significant impact on among PUs

H1c Relational capital has a positive and significant impact on among PUs

H1d Spiritual capital has a positive and significant impact on among PUs

H2 CsFs of KM has a positive and significant impact on OP among PUs

H2a HRM has a positive and significant impact on OP among PUs

H2b IT has a positive and significant impact on OP among PUs

H2c Leadership has a positive and significant impact on OP among PUs

H2d Organizational Strategy has a positive and significant impact on OP among PUs

H3 Innovation has positive significant impact on OP among PUs

H4 There is a positive significant relationship between IC and innovation among PUs

H5 There is a positive significant relationship between CsFs of KM and innovation among PUs

H6 Innovation mediates the influence of IC on OP among PUs

H7 Innovation mediates the influence of CsFs of KM on OP among PUs

 METHODOLOGY

MEASUREMENT VARIABLES
Intellectual No. Source of
Measurement Items Adaption
Capital

Human Level of competency, knowledge, experiences and skills of

7
Capital employees

The degree of organization reproduced, shared technologies,

Structural number of inventions in process, number of publications,
7
Capital quality of strategy, types of culture, types of structures, quality
Bontis,
of systems, quality of organizational routines and procedures
(1998)

The value of franchise, brand, customer loyalty, extent of Ismail

Relational (2005)
networking, quality and the extent of on going relationships 7
Capital with the stakeholders

Spiritual The level of faith, loyalty, courage, motivation, belief and

Capital emotion embedded in the minds and hearts of organization’s 7
employees
 METHODOLOGY

MEASUREMENT VARIABLES
Critical Success No. Source of
Measurement
Factors of KM Items Adaption

Level of provided training and motivation, job rotation,

Human Choi
authority empowerment (trust and freedom to make
Resource 7 (2002),
decision), reward and punishment given by the
Management organization.
Wong
Level of support on IT, communication, searching and Aspinwall
Information
accessing information, systematic storing, knowledge 7 (2005),
Technology sharing and future expansion.
Hsieh
Contribution of top management towards commitment, (2007),
Leadership mission, vision, strategic plan, and dedication in lead and 5
support. Chong et al.
(2009)
5
Organizational Formulation of strategic plan, mission and vision statement
Strategy and program organized.
 METHODOLOGY

MEASUREMENT VARIABLES
No. Source of
Innovation Measurement
Items Adaption

The extent of a organization’s value of non-value adding

activities in delivery related processes, cost, value of variable
Process
cost, speed of delivery in delivery related logistics processes, 3
Innovation quality of output in services processes, type of techniques,
type of machinery and software.

OECD
The existence of new services with technical specifications,
(2005),
Service level of customer satisfaction, the new services developed,
3
Innovation value of reduced service cost, quality in components and
materials of current services. Gunday
et al.
(2011)
The existence of new organization structure to facilitate
project type organization, the new in-firm management
Organizational
information system and information sharing practice and the 3
Innovation new organizational structure to facilitate strategic
partnerships and long-term business.
 METHODOLOGY

MEASUREMENT VARIABLES
Organizational No. Source of
Measurement
Performance Items Adaption

The expectation of customers satisfaction, the

expectations of funding agencies, the quality of services,
Customer
the number of services offered, the type of improved 3
Perspective services, the increase in number of people that the firm
serves, level of satisfaction of various needs and quality.

Blackmon
Level of improved planning processes, programming
quality, control processes quality, service delivery (2008)
Internal
processes quality, following program quality protocols,
Business 3
quality of operational efficiency, level of reduction of Owen et al.
Perspective customers complaint, experience and skills in getting to (2001)
targeted customers.

Degree of relationship between employees’ job satisfaction

and the mission of the organization, level of employees’ job
Learning and
satisfaction, sufficiency of information to perform
Growth 3
employee's tasks, amount of information of employee's
Perspective optimal decisions and the frequency of task-related
trainings to its employees.
 METHODOLOGY

QUESTIONNAIRE DESIGN
 The variables will be measured by a structured questionnaire which
contains 5 parts:
 Part 1: Particulars of Respondent’s and Institution
 Part 2: Components of IC
 Part 3: CsFs of KM
 Part 4: Innovation
 Part 5: OP

DATA ANALYSIS
 To achieve the research objectives, Structural Equation Modeling
(SEM) will be used for data analysis using Partial Least Squares
(PLS)
 Descriptive statistics such as frequency, mean, standard deviation,
range and percentage will be used to show demographic data using
Statistical Package for the Social Sciences (SPSS)
THANK YOU