Intellectual Capital

With the rise of the “new economy”, knowledge became a most valuable resource. Accepting knowledge as a resource suggests that knowledge can be acquired, transferred, combined and used, and it may be a potential source of sustainable competitive advantage. In this context, knowing how an organization creates value, based on its potential of knowledge, became a central question in management research. Under a strategic perspective, knowledge that creates value is defined as intellectual capital, the application of which will give organisations sustainable competitive advantage. Therefore, identifying, measuring and managing intellectual capital is crucial for corporate innovation and competitiveness. The purpose of our study is to examine the interrelationships and the effects of interaction between intellectual capital components and organisational performance, and defines how knowledge creates value. The study is developed in the context of Portuguese banks, an industry where differentiation of products and services almost exclusively hinges on the continuous rejuvenation of the underlying knowledge base. Empirical findings from this study support the propositions that intellectual capital is a key driver of organisational performance and that a knowledge-based perspective holds a more holistic model of organisations’ value creation.