Intellectual capital, competitive advantage and the ambidexterity liaison

Abstract

In today's uncertain and ambiguous business reality, both business enterprises and other societal human organizations strive for competitive advantage. To attain it, they develop the capability to pursue innovation, while exploiting other existing capabilities pertinent to their organizational 'ambidexterity'. This article investigates the role that organizational ambidexterity plays in the relation between intellectual capital (IC) and competitive advantage (CA). Tested is a set of research hypotheses, using sample data gleaned from 233 textile firms in Pakistan. Partial least squares structural equation modeling (PLS-SEM) unconceals a significant mediately effect that organizational ambidexterity interposes between intellectual capital and competitive advantage, i.e., IC helps firms become ambidextrous in attaining competitiveness. Noted too are the significant effects of all three IC components on competitive advantage, whereby the highest effect is attributed to human-development capital (HDC), followed by structural capital (SC) and relational capital (RC). These results contribute to much-needed comprehensive-strategy designs that, based on both intellectual capital and ambidexterity, yield a sustainable competitive advantage. Despite the study's limitations and small sample size, the article offers both future-research directions and policymaking recommendations.

Balancing innovation and exploitation in the fourth industrial revolution: Role of intellectual capital and technology absorptive capacity

“…For the success of an organization, it is vital for it to develop and acquire tacit resources and knowledge ( Hitt et al., 2001 ; Hitt et al., 1998 ), leading to a shift from physical resources to intangible (imitable) resources, and for gaining both ambidexterity and competitiveness ( Ashton and Morton, 2005 ; Wong and Aspinwall, 2005 ). Thus, management of knowledge-based resources has become a key driver for better performance and sustainable competitive advantage ( Grant, 1996 ; Mubarik et al., 2019 ; Sharkie, 2003 ; Teece, 2012 ). The literature on IC contains attention-grabbing opinions about the technique in which organizations adjust exploration and exploitation activities.…”

“…The literature on IC contains attention-grabbing opinions about the technique in which organizations adjust exploration and exploitation activities. In the same vein, HC, structural capital (SC) and relational capital (RC) represent different knowledge stocks at different organizational levels ( Mubarik et al., 2019 ; Mubarik, 2015 ). These IC dimensions will interact across different organizational levels, playing distinct roles when creating ambidextrous capabilities (Fernández-Pérez et al., 2017; Kang and Snell, 2009 ) and leading to superior organizational performance ( Andrews, 2010 ; Liu and Chen, 2009 ).…”

“…Researchers (e.g., Eisenhardt and Sull, 2001 ; Kang et al., 2007 ; Mom et al., 2015 ; Mubarik et al., 2016 ) explain relational or social capital as being a blend of different relationships such as market relationships, power relationships and cooperation. RC encompasses trust, stronger understanding, collaboration and the relationship among the strategic partners in this regard, and it characterizes interactions, connection stocks, closeness, linkages, loyalty, and goodwill between an organization and downstream clients, upstream suppliers, external stakeholders, and strategic partners ( Lazzarotti et al., 2017 ; Mubarik et al., 2019a , Naghavi and Mubarak, 2019 ). It is also called external capital that comprises customers, brands, and the reputation of the company business collaboration; and channels of distribution, licensing agreements and customer satisfaction.…”

“…The resource-based view ( Wernerfelt 1984 ) claimed that competitive advantage of corporation are rooted through organizations that have VRIN resources ( valuable, rare, inimitable and non-substitutable ) ( Kor and Mahoney, 2004 ). VRIN can be acquired through human capital (HC), relationships and processes collectively termed as IC ( Lev and Zambon 2003 ; Chu et al., 2006 ; Mubarik et al., 2019 ). By developing IC, a firm can attain OA— a fit between its firm's innovation and exploitation activities ( Barney, 2001 ; ; Russo and Fouts, 1997 ).…”

“… Ashton and Morton 2005 ; Barathi 2007 ; Arenas, and Lavanderos, 2008 ; Hsu and Fang 2009 ; Asiaei, and Jusoh, 2015 ) examine the role of OA in the association between IC and firm performance. However the scholastics work examining the role of TAC in IC- OA is missing ( Mubarik et al., 2019 Carte, 2005 ; Mouritsen, 1998 , 2005 ; Seleim and Khalil, 2011 ; Alvarez and Barney, 2001 ; Nonaka and Konno, 1998 ). Against this backdrop, examining how TAC intervenes in the interplay of IC—OA is essential for devising strategies for IC led ambidexterity.…”