Intellectual Capital: The Current Affluence of Organizations in Malaysian Banking Industry.

Abstract

This article discusses on the importance of Intellectual Capital in organization. In this new millennium, the dependence on intellectual capital has an indispensable rise on the economy from industrialization into knowledge-based economy. The main motivation behind this study is to educate that intangible asset is recognized as the key driver of efficiency and economic growth. Moreover, the competitive business environment is compulsory for firm to apply an innovative method to conduct business. Therefore, Intellectual Capital is needed to protect the organizations against the demand of innovation and competitive business environment in today's knowledge-oriented economy. Nowadays, sources of economic value and wealth encompasses not only the goods manufactured by organizations but also their intangible assets. Hence, intellectual capital will attribute to additional role in generating values. In the knowledge based socio-economic period where intellectual capital has become one of the production factors, performance measurements for organization may not be viable with traditional accounting practices any longer as many people value intellectual somewhat than physical resources. The main idea of exploring Intellectual Capital in banking industry is because of the nature of banking industry as a knowledge intensive industry. Moreover, countries economy and growth highly dependent on monetary and financial stability, thus banking industry plays a crucial role in the development of financial systems.

Intellectual Capital and Organisational Performance of the Financial Sector: Evidence from Nigeria

“…The industry regulator is the Pension Commission of Nigeria (PENCOM). According to data obtained from the Commission website, the structure of the sector as of June 2021 are Pension Fund Administrators (22), Pension Fund Custodians (4), and Closed Pension Fund Administrators (6). As data for individual companies in the Pension Sector is not publicly available, this study will focus on banking and insurance sectors of the Nigeria economy.…”

“…Mckinsey [9] examined the top 10 banks from 2010 to 2019 and concluded that while earnings have increased, actual growth has been significantly lower. On the economy front, the real GDP rate on a year-to-year basis declined from 2.7% in 2015 to 2.0% in 2019 [6].…”

“…For organisations to survive in the new global competitive environment, they should operate on conditions of strong performance and assessing the performance of organisations has thus engage the attention of management and researchers [6]. The main problem of organisational performance is the low degree of performance.…”