The Role of Intellectual Capital in Knowledge Transfer I. INTRODUCTION (Insufficient Researched Areas) Intellectual Capital Issues in interfirm collab

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1 TECH 646 Analysis of Research in Industry and Technology Discussion Note The Role of Intellectual Capital in Knowledge Transfer, Chung-Jen Chen, His-An Shih, and Su-Yueh Yang, IEEE Transactions on Engineering Management,, Vol. 56, No. 3, pp , 411, August Paul I. Lin, Professor of ECET Purdue University M.S. Technology: Industrial Technology/Manufacturing and IT and Advanced Computer Applications Tracks Indiana University- Purdue University Fort Wayne 1 The Role of Intellectual Capital in Knowledge Transfer Abstract The purpose of the study Research method used Regression analysis Highlight results and findings Contribution of this study Brief on management implications Index terms Human capital, intellectual capital, knowledge transfer performance, organizational capital, relational capital 3 The Role of Intellectual Capital in Knowledge Transfer Abstract I. INTRODUCTION II. RESEARCH BACKGROUND AND HYPOTHESES III. RESEARCH METHODOLOGY IV. ANALYSIS AND RESULTS V. DISCUSSION AND CONCLUSION APPENDIX I. MEASUREMENT ITEMS REFERENCES 2 The Role of Intellectual Capital in Knowledge Transfer I. INTRODUCTION (Research Conducted & Reported) Knowledge Transfer as a critical resource for supporting firm s competitive advantage [16], [31], [50], [62], [64] In-house knowledge development & external knowledge => copes rapid technological changes [9], [33], [44], [57] Strategic Alliance (adequate but challenging way) a vehicle for developing internal competency [3]. [17], [59], [60] Discussion on how the determinants such Alliance Characteristics and Partner Interaction affect the alliances 4 1

2 The Role of Intellectual Capital in Knowledge Transfer I. INTRODUCTION (Insufficient Researched Areas) Intellectual Capital Issues in interfirm collaboration contexts Intellectual Capital effects on organizational outcomes in the topics of humane resources [75] Innovation [12], [54], [61] High-tech entrepreneurship [25], [27], [76] Little research on examining the role of (Intellectual Capital) => through (Strategic Alliance) => (Knowledge Transfer) I. INTRODUCTION Knowledge Transfer (KT) - operational definition A process that requires commitment of resources, managerial time, attentions, and effects [9], [49] How to make it effective (better outcomes) Human Capital (HC) & Organizational Capital (OC) Valuable assets and contexts In the creation and acquisition of knowledge Found in previous studies as the determinants of the Dependent Variables [11],[27],[51],[61],[74],[76] 5 7 The Role of Intellectual Capital in Knowledge Transfer I. INTRODUCTION (Focus of this Study) Address this issues (IC => SA => KT) Investigate different aspect of IC (Human Capital, Organization Capital, Relational Capital) => Impact => the performance of Knowledge Transfer in the context of interfirm cooperation I. INTRODUCTION Relational Capital (RC) Good relationships with partners in terms of mutual trust, respect, friendship Enabling, assisting factor for KT The authors argue this KT performance would be Regulated by RC RC or Innovation Capital was treated as mediator between HC&OC and Dependent Variable [11], [76] 6 8 2

3 I. Introduction Resource-based framework The Firm is viewed as a nexus of resources and capabilities that are not freely bought and sold in the spot market [35], [55], [68] Resources and Capabilities have been labeled Distinctive Competence [52],[58] Core competence [48] Firm specific competences [45] This Study Focuses on The mediating effects of RC between HC & OC and KT Proposed Figure 1. Research Model and Hypotheses A. Intellectual Capital B. Human Capital & Relational Capital C. Organizational Capital & Relational Capital D. Relational Capital and Knowledge Transfer Performance E. Mediating Role of Relational Capital in Knowledge Transfer 9 11 Figure 1. Research Model and the Hypotheses A. Intellectual Capital (IC) The importance of IC to the competitive advantages of firms in the rapid changing knowledge-based economy Competency-base perspective Describe how firm-specific resources and capabilities enable the organizations to acquire and assimilate knowledge from their partners in the KT period Literature review on previous studies and finding/results

4 A. Intellectual Capital (some common practices) 1. HC and OC were commonly uses as the determinants of the Dependent Variables (Knowledge Transfer outcomes or performance) 2. Relational l Capital or Innovation Capital was treated t as Mediators between HC and OC and the Dependent Variables 3. Resource-based view was commonly used to explain the hypotheses in the prior studies B. Human Capital and Relational Capital Human Capital (HC) Refers to the tacit knowledge and skills resides in the minds of the managers and employees [7], [24], [41], [61], [73] Relational Capital (RC) Refers to the level of mutual trust, respect, and friendship that arises out of close interaction between the employees and their partners involved in the knowledge transfer project [13], [32] Hypothesis 1: The greater the human capital embedded in the employees of the firms, the greater is the relational capital with the partners during the knowledge transfer period A. Intellectual Capital (IC) This Study Focuses on Examining the role of IC in KT through interfirm cooperation projects The mediating effects of RC between HC & OC and KT Competence-based perspective was used to describe how firm-specific resources and capabilities enable the organizations to acquire and assimilate knowledge from their partners in the knowledge transfer period 14 C. Organizational Capital and Relational Capital Organizational Capital (OC) Refers to the levels of institutionalized knowledge and codified embodied in the organizational-level level repository, such as information system and organizational structure, which can support employees in doing their work [67], [74] Hypothesis 2: The greater the organizational capital embodied in the organizational repository of the firms, the greater is the relational capital with the partners during the knowledge transfer period. 16 4

5 D. Relational Capital and Knowledge Transfer Performance Hypothesis 3: The greater the relational capital with the partners, the greater is the degree of knowledge transfer performance achieved. A. Data Collection and Sample Questionnaire survey approach to collect data Test the validity of the model and research hypotheses Four Variables (in questionnaire) Human Capital Organizational Capital Relational capital Knowledge transfer performance E. Mediating Role of Relational Capital in Knowledge Transfer Hypothesis 4: Relational Capital positively medias the linkage of human capital and knowledge transfer performance. Hypothesis 5 Relational Capital positively mediates the linkage of organizational capital and knowledge transfer performance. A. Data Collection and Sample 5-point Likert-style response (Level of agreement) 1-Strongly disagree, 2-Disagree, 3-Neither agree nor disagree, 4-Agree, 5-Strongly agree 1-Strongly unfavorable, 2-Somewhat unfavorable, 3- Undecided, 4-Somewhat favorable, 5-Strongly favorable 7-point Likert-style response (Level of agreement) 1-Strongly disagree, 2-Disagree, 3-Somewhat disagree, 4-Neither agree nor disagree, 5-Somewhat agree, 6- Agree, 7-Strongly agree

6 A. Data Collection and Sample Population of Study 5000 Taiwanese Firms listed in the Year book - China Credit Information Service Incorporation China Credit Information Service, Ltd. (CCIS), Professional Publishing: Top 5000 (2009) - The Largest Corporations in Taiwan ($230), Sampling Methods Stratified Random Sampling Select 100 firms in each of the five 1000 levels 500 questionnaires were distributed To be completed by mangers who are familiar with the topics of this study 21 A. Data Collection and Sample Survey Bias Analysis Non-response Bias Test Comparing the characteristics of the respondents to those of the original population The calculated t-statistics of the number of Employees (t = -1.77, p = 0.08) and Revenue (t = , p = 0.46) are all statistically insignificant Suggesting there are no significant differences between the respondent and non-respondent groups 23 A. Data Collection and Sample After two weeks Follow-up letters & phone calls Completed Surveys 103 retuned questionnaires, 6-incomplete 97 valid surveys used for the Quantitative Analysis 19.4% response rate A. Data Collection and Sample Survey Bias Analysis Common method bias Common method variance tested using Harman s one factor test Principal Component Factor Analysis on the questionnaires measurement yields Six factors with eigenvalues greater than 1.0 that account for 71.88% of the total variance The first factor accounts for 21.46% of the variance Common method bias is unlikely to be a serious problem in the data [46]

7 B. Measures Three Variables to be Measured Dependent Variable, Independent Variables, Control variables Dependent Variable (KT Performance) with Four-item scale was developed to measure the degree to which the acquired knowledge contributes to the firm s innovativeness in terms of Strengthen Innovative Capabilities Shortening Innovation Processes Inducing Innovative Activities Accomplishing Satisfied Results Cronbach s alpha coefficient (α = 0.92) Was computed to assess the internal consistency reliability of the measure, which is above the suggested value of 0.72 [21] B. Measures Independent Variable Organizational Capital (Independent Variable) Based on prior studies [11], [61] 12-items were developed to measure the extent to which the organization s knowledge and codified experience stored in Corporate Culture Organizational Structure Operation Process, and Information System Cronbach s alpha coefficient (α = 0.95) B. Measures Independent Variable Human Capital (Independent Variable) Based on Carmeli and Tishler s study [7] 12 items were developed to measure the extent to which the employees posses the intangible asserts in terms of Education Work Experience Competence Cronbach s alpha coefficient (α = 0.83) B. Measures Relational Capital (Independent Variable) Based on prior study [32] A 5-item scale were developed to measure the extent to which the respondents interact with their partners in terms of during the knowledge transfer period. Close Interaction Mutual Respect Mutual Trust Personal Friendship Reciprocity Cronbach s alpha coefficient (α = 0.93)

8 B. Measures Control Variables Firm Size and Firm Age may influence knowledge transfer performance Firms in Different Industries may behave differently in the process of KT Firm Size Measured as the amount of annual sales in NT dollars Firm Age The number of years from the founding date Industry Type (dummy variable) 0 Service Industry 1 Manufacturing Industry IV. Analysis and Results Table I Means, Standard Deviations, and Correlations The values of Variance Inflation Factor associated with each of the predictors range from to which fall within acceptance limits [21] Suggesting no need for concern with respect to multicollinearity IV. Analysis and Results Table I (Relationship among HC, OC, RC and KT Performance ) Correlation Matrix Means Standard Deviations Correlations for all measured variables 1. Firm Size 2. Age 3. Industry Type 4. Human Capital (HC) 5. Organizational Capital (OC) 6. Relational Capital (RC) 7. Knowledge Transfer Performance IV. Analysis and Results Table 2 Results of Regression Analysis Predicting Relational Capital, and Knowledge Transfer Performance Model 1: Capture the direct effects: HC => KTP Model 2: HC & OC => KTP Model 3: RC => KTP Model 4: HC & OC are no longer significant when RC is added

9 IV. Analysis and Results Model Statistics R-square The coefficient of determination Adjusted R-square A modification of R2 that adjusts for the number of explanatory terms in a model F (F-test) The F Statistics for analysis of variance F = Explained Variance/Unexplained Variance OR F = Between-Group Variability/Within-Group Variability N used sample V. Discussion and Conclusion The contribution of this study 1) The findings of this study contribute to the theoretical development of a conceptual model for explaining the interrelationships among three aspects of intellectual capital and knowledge performance. 2) Second, based on process-oriented oriented view,.. Our results join prior research ([11], [76]) suggesting that relational capital serve as the necessary conduits to enhance organizational performance and to highlight the critical role of relational capital for the firms involved in the knowledge transfer activities. 3) The third contribution is this study is the derivation of empirical support for the model s prediction by using data from actual partnerships... The empirical evidence of this study will fill the gap in the literature that is lack of empirical examination of the roles in intellectual capital in the knowledge transfer contexts V. Discussion and Conclusion The findings/results provide support for the arguments that IC facilitates KTP The three dimensions of IC (OC, HC, and RC) have significant effects, directly or indirectly, on KTP More specifically it proves the proposed the research model, in Figure 1: OC/HC => RC => KTP The implication of the findings is that firms involved in KT projects need to Actively manage their Organizational capital and Human Capital To stimulate Relational Capital with the partners Please answer the following questions based on the situations when your company executed the knowledge transfer project. 1) Knowledge transfer performance (4 items, α = 0.92) a) The transferred knowledge can strengthen the innovative capabilities of our company. b) The transferred knowledge can shorten the innovation processes of our company. c) The transferred knowledge can induce innovation activities at our company. d) The transferred knowledge can achieve satisfied innovation results at our company

10 2) Human Capital (12 items, α = 0.83) a) Employees have suitable education to fulfill their jobs. b) Employees are well trained. c) Employees hold suitable work experience for accomplishing their job successfully. d) Employees are well-skilled professionally to accomplish their job successfully. e) No one knows this job better than our employees. 2) Human Capital (12 items, α = 0.83) j) Considering the time spent on the job, employees feel thoroughly familiar with their tasks. k) Employees understand that doing this job well is a reward in itself. l) Mastering their jobs means a lot to our employees ) Human Capital (12 items, α = 0.83) f) Problems here are easy to solve once the employees understand the various consequences of their actions, a skill they have acquired. g) Employees do not know why, but sometimes when they are supposed to be in control they feel they are being manipulated. h) If anyone here can find the answer, it is our employees. i) Employees go home the same way they arrived in the morning, feeling they have not accomplished much. Note: * represents reverse item 3) Organizational Capital (12 items, α = a) Employees realize the relationships among authority, responsibility, and benefit. b) Employees effectively construct information system. c) Employees effectively utilize information system. d) Employees know well about the contents of company s culture. e) Employees recognize clearly about the company s perspective. f) Employees can implement a valid controlling system

11 3) Organizational Capital (12 items, α = g) Employees can operate an efficient business process. h) Employees can operate a high-quality production. i) Employees can achieve high operation efficiency. j) Employees can contribute mutual support and cooperation. k) Employees can conveniently access to enterprise information. l) Employees can effectively share their knowledge with each other. 5) Background Information a) What year was our firm established? b) What were the annual sales for our firm? c) What industry type does our firm belong to? Manufacturing Service ) Relational Capital (5 items, α = 0.93) a) Employees have close interaction with the partners. b) Employees have mutual respect with the partners. c) Employees have mutual trust with the partners. d) Employees have personal friendship with the partners. e) Employees have high reciprocity with the partners