Share:


Exploring dynamic capabilities, intellectual capital and innovation performance relationship: evidence from the garment manufacturing

Abstract

The notions of dynamic capabilities, intellectual capital, and innovation performance have been examined in many competitive advantage scholarly papers. However, there have been small numbers of management studies that consider the link of dynamic capabilities and intellectual capital in respect of innovation performance. Previous studies tend to argue that dynamic capabilities played a mediator or moderator role on intellectual capital and innovation performance linkage. Therefore, this study seeks to propose a new perspective that dynamic capabilities are the antecedents of intellectual capital leading to innovation performance. Thus, the rationale for this study is to propose a conceptual model and to provide empirical support on the mediator role of intellectual capital in dynamic capabilities and innovation performance linkage. By using accidental and snowballs sampling techniques, this study distributed questionnaires to 297 small and medium enterprises of the garment manufacturing in Indonesia. Partial least square offers the main statistics methodology for data analysis. Results show that dynamic capabilities had a significant influence on intellectual capital and innovation performance. Moreover, intellectual capital partially mediated dynamic capabilities’ influence on innovation performance. Therefore, it is expected that organisations should grow, implement and maintain their dynamic capabilities in order to improve their intellectual capital and innovation outcomes. Lastly, some future studies are suggested.

Keyword : competitive advantage, dynamic capabilities, garment manufacturing, innovation performance, intellectual capital, partial least square, small and medium enterprises

How to Cite
Wendra, W., Sule, E. T., Joeliaty, J., & Azis, Y. (2019). Exploring dynamic capabilities, intellectual capital and innovation performance relationship: evidence from the garment manufacturing. Business: Theory and Practice, 20, 123-136. https://doi.org/10.3846/btp.2019.12
Published in Issue
Mar 15, 2019
Abstract Views
2045
PDF Downloads
1287
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Agostini L, Nosella A, Filippini R (2017) Does intellectual capital allow improving innovation performance? A quantitative analysis in the sme context. Journal of Intellectual Capital18 (2): 400-418. http://doi.org/10.1108/JIC-05-2016-0056

Alcaide-Marzal J, Tortajada-Esparza E (2007) Innovation as-sessment in traditional industries. A proposal of aesthetic innovation indicators. Scientometrics72 (1): 33-57. http://doi.org/10.1007/s11192-007-1708-x

Amabile TM (1997) Motivating creativity in organizations: on doing what you love and loving what you do. California Mana-gement Review40 (1): 39-58. http://doi.org/10.2307/41165921

Ambrosini V, Bowman C (2009) What are dynamic capabilities and are they a useful construct in strategic management? International Journal of Management Reviews11 (1): 29-49. http://doi.org/10.1111/j.1468-2370.2008.00251.x

Anand N, Gardner HK, Morris T (2007) Knowledge-based innovation: emergence and embedding of new practice areas in management consulting firms. Academy of Ma-nagement Journal50 (2): 406-428. http://doi.org/10.5465/amj.2007.24634457

Anderson N, Potočnik K, Zhou J (2014) Innovation and creativity in organizations: a state-of-the-science re-view, prospective commentary, and guiding framework. Journal of Management40 (5): 1297-1333. http://doi.org/10.1177/0149206314527128

Ansari R, Barati A, Sharabiani AAA (2016) The role of dynamic capability in intellectual capital and innovative performance. International Journal of Innovation and Learning20 (1): 47-67. http://doi.org/10.1504/IJIL.2016.076671

Azis Y, Darun MR, Kartini D, Bernik M, Harsanto B (2017) A model of managing innovation of smes in Indonesian creative industries. International Journal of Business and Society18 (2): 391-408. http://www.ijbs.unimas.my/images/repository/pdf/Vol18-S2-paper10.pdf

Azis Y, Kartini D, Bernik M, Harsanto B (2014) Managing innovation in creative industries for increasing competiti-veness: case study of companies at Bandung – Indonesia. International Journal of Innovative Research in Science, Engineering and Technology (3): 11. http://doi.org/10.15680/IJIRSET.2014.0311064

Babelytė-Labanauskė K, Nedzinskas Š (2017) Dynamic capabili-ties and their impact on research organizations’ R&D and in-novation performance. Journal of Modelling in Management12 (4): 603-630. http://doi.org/10.1108/jm2-05-2015-0025

Bagozzi RP, Yi Y, Phillips LW (1991) Assessing construct validity in organizational research. Administrative Science Quarterly 421-458. http://doi.org/10.2307/2393203

Baron RM, Kenny DA (1986) The moderator–mediator variable distinction in social psychological research: conceptual, stra-tegic, and statistical considerations. Journal of personality and social psychology51 (6): 1173. http://doi.org/10.1037/0022-3514.51.6.1173

Barreto I (2010) Dynamic capabilities: a review of past research and an agenda for the future. Journal of Management36 (1): 256-280. http://doi.org/10.1177/0149206309350776

Battisti M, Deakins D (2017) The relationship between dynamic capabilities, the firm’s resource base and performance in a post-disaster environment. International Small Business Jour-nal35 (1): 78-98. http://doi.org/10.1177/0266242615611471

Breznik L, Hisrich RD (2014) Dynamic capabilities vs innovation capability: are they related? Journal of Small Business and En-terprise Development21 (3): 368-384. http://doi.org/10.1108/jsbed-02-2014-0018

Bruce M, Daly L, Towers N (2004) Lean or agile: a solu-tion for supply chain management in the textiles and clothing industry? International Journal of Operations & Production Management24 (2): 151-170. http://doi.org/10.1108/01443570410514867

Buenechea-Elberdin M (2017) Structured literature review about intellectual capital and innovation. Journal of Intellectual Capital18 (2): 262-285. http://doi.org/10.1108/jic-07-2016-0069

Bueno E, Paz Salmador M, Rodríguez Ó (2004) The role of social capital in today’s economy: empirical eviden-ce and proposal of a new model of intellectual capital. Journal of Intellectual Capital5 (4): 556-574. http://doi.org/10.1108/14691930410567013

Cabrita MDR, Bontis N (2008) Intellectual capital and business performance in the Portuguese banking industry. Internatio-nal Journal of Technology Management43 (1-3): 212-237. http://doi.org/10.1504/ijtm.2008.019416

Cao L (2011) Dynamic capabilities in a turbulent market envi-ronment: empirical evidence from international retailers in China. Journal of Strategic Marketing19 (5): 455-469. http://doi.org/10.1080/0965254X.2011.565883

Castro GM-d, Delgado-Verde M, Amores-Salvadó J, Navas-López JE (2013) Linking human, technological, and relational as-sets to technological innovation: exploring a new approach. Knowledge Management Research & Practice11 (2): 123-132. http://doi.org/10.1057/kmrp.2013.8

Chen M-C, Cheng S-J, Hwang Y (2005) An empirical inves-tigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital6 (2): 159-176. http://doi.org/10.1108/14691930510592771

Chien SY, Tsai CH (2012) Dynamic capability, knowledge, learning, and firm performance. Journal of Organizatio-nal Change Management25 (3): 434-444. http://doi.org/10.1108/09534811211228148

Chin WW (1998) The partial least squares approach to structural equation modeling. In: Marcoulides GA (Ed) Modern met-hods for business research. Mahwah, NJ: Lawrence Erlbaum Associates, 295-336.

Chin WW (2010) How to write up and report PLS analysis. In: Vinzi VE, Chin WW, Henseler J, Wang H (Eds) Handbook of partial least squares: Concepts, methods and applications. Heidelberg, Berlin: Springer-Verlag, 655-690. http://link.springer.com/chapter/10.1007%2F978-3-540-32827-8_29

Collis DJ (1994) Research note: how valuable are organizational capabilities? Strategic Management Journal15 (S1): 143-152. http://doi.org/10.1002/smj.4250150910

Cooper DR, Schindler PS (2014) Business research methods (12 ed). New York: McGraw-Hill International Edition.

Danneels E (2002) The dynamics of product innovation and competences. Journal of Strategic Management23 (12): 1095-1121. http://doi.org/10.1002/smj.275

Danneels E (2008) Organizational antecedents of second-order competences. Strategic Management Journal29 (5): 519-543. http://doi.org/10.1002/smj.684

Danneels E (2011) Trying to become a different type of company: dynamic capability at Smith Corona. Strategic Management Journal32 (1): 1-31. http://doi.org/10.1002/smj.863

Dost M, Badir YF, Ali Z, Tariq A (2016) The impact of intellectual capital on innovation generation and adoption. Journal of Intellectual Capital17 (4): 675-695. http://doi.org/10.1108/JIC-04-2016-0047

du Plessis M (2007) The role of knowledge management in in-novation. Journal of Knowledge Management11 (4): 20-29. http://doi.org/10.1108/13673270710762684

Edvinsson L, Malone M (1997) Intellectual capital: realizing your company’s true value by finding its hidden brainpower. New York: Harper Business.

Eisenhardt KM, Martin JA (2000) Dynamic capabilities: what are they? Strategic Management Journal 21 (10-11): 1105-1121. https://doi.org/10.1002/1097-0266%28200010/11%2921%3A10/11<1105%3A%3AAID-SMJ133>3.0.CO%3B2-E

Engelman RM, Fracasso EM, Schmidt S, Zen AC (2017) Intel-lectual capital, absorptive capacity and product innovation. Management Decision55 (3): 474-490. http://doi.org/10.1108/md-05-2016-0315

Fleming L, Sorenson O (2004) Science as a map in technological search. Strategic Management Journal25 (8‐9): 909-928. http://doi.org/10.1002/smj.384

Fornell C, Larcker DF (1981) Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 39-50. http://doi.org/10.2307/3151312

Fumi A, Pepe A, Scarabotti L, Schiraldi MM (2013) Fourier analy-sis for demand forecasting in a fashion company. International Journal of Engineering Business Management5: 30. http://doi.org/10.5772/56839

Giniuniene J, Jurksiene L (2015) Dynamic capabilities, innovation and organizational learning: Interrelations and impact on firm performance. Procedia – Social and Behavioral Sciences213: 985-991. http://doi.org/10.1016/j.sbspro.2015.11.515

Gupta AK, Tesluk PE, Taylor MS (2007) Innovation at and across multiple levels of analysis. Organization Science18 (6): 885-897. http://doi.org/10.1287/orsc.1070.0337

Hair JF, Black WC, Babin BJ, Anderson RE (2010) Multivariate Data Analysis (7th ed). New Jersey: Pearson Prentice Hall.

Hair Jr JF, Hult GTM, Ringle C, Sarstedt M (2016) A primer on partial least squares structural equation modeling (PLS-SEM). Sage Publications.

Han Y, Li D (2015) Effects of intellectual capital on innovative performance: the role of knowledge-based dynamic capability. Management Decision53 (1): 40-56. http://doi.org/10.1108/md-08-2013-0411

Hargadon A (2003) How breakthroughs happen: the surprising truth about how companies innovate. Boston, MA: Harvard Business Press.

Helfat CE, Finkelstein S, Mitchell W, Peteraf MA, Singh H, Teece DJ, Winter SG (2007) Dynamic capabilities: understanding strategic change in organizations. Malden, MA: Blackwell Publishing.

Helfat CE, Peteraf MA (2003) The dynamic resource‐based view: capability lifecycles. Strategic Management Journal24 (10): 997-1010. http://doi.org/10.1002/smj.332

Helfat CE, Winter SG (2011) Untangling dynamic and opera-tional capabilities: strategy for the (N)ever‐changing world. Strategic Management Journal32 (11): 1243-1250. http://doi.org/10.1002/smj.955

Hsu I-C, Sabherwal R (2012) Relationship between intellectual capital and knowledge management: an empirical investiga-tion. Decision Sciences43 (3). http://doi.org/10.1111/j.1540-5915.2012.00357.x

Hsu L-C, Wang C-H (2012) Clarifying the effect of intellectual capital on performance: the mediating role of dynamic capa-bility. British Journal of Management23 (2): 179-205. http://doi.org/10.1111/j.1467-8551.2010.00718.x

Hussinki H, Ritala P, Vanhala M, Kianto A (2017) Intellectual capital, knowledge management practices and firm perfor-mance. Journal of Intellectual Capital18 (4): 904-922. http://doi.org/doi:10.1108/JIC-11-2016-0116

Inkinen H, Kianto A, Vanhala M, Ritala P (2017) Structure of in-tellectual capital – an international comparison. Accounting, Auditing & Accountability Journal30 (5): 1160-1183. http://doi.org/10.1108/AAAJ-11-2015-2291

Iturrioz C, Aragón C, Narvaiza L (2015) How to foster shared innovation within SMEs’ networks: Social capital and the role of intermediaries. European Management Journal33: 104-115. http://doi.org/10.1016/j.emj.2014.09.003

Joeliaty J (2012) The influence of intellectual capital and know-ledge management to competitive advantage and its impact on the performance of study program (A study on state uni-versities in Bandung). PhD’s Thesis, Indonesia: Universitas Padjadjaran.

Kapelko M, Oude Lansink A (2014) Examining the relation between intangible assets and technical efficiency in the in-ternational textile and clothing industry. The Journal of The Textile Institute105 (5): 491-501. http://doi.org/10.1080/00405000.2013.826417

Khalique M, Bontis N, Nassir bin Shaari JA, Isa AHM (2015) Intellectual capital in small and medium enterprises in Pa-kistan. Journal of Intellectual Capital16 (1): 224-238. http://doi.org/10.1108/jic-01-2014-0014

Kianto A, Antonio Lerro DRLD, Ritala P, Spender J-C, Vanha-la M (2014) The interaction of intellectual capital assets and knowledge management practices in organizational value creation. Journal of Intellectual Capital15 (3): 362-375. http://doi.org/10.1108/jic-05-2014-0059

Kianto A, Sáenz J, Aramburu N (2017) Knowledge-based human resource management practices, intellectual capital and in-novation. Journal of Business Research81: 11-20. http://doi.org/10.1016/j.jbusres.2017.07.018

Koryak O, Mole KF, Lockett A, Hayton JC, Ucbasaran D, Hodgkinson GP (2015) Entrepreneurial leadership, capabi-lities and firm growth. International Small Business Journal33 (1): 89-105. http://doi.org/10.1177/0266242614558315

Li D-y, Liu J (2014) Dynamic capabilities, environmental dy-namism, and competitive advantage: Evidence from China. Journal of Business Research67: 2793-2799. http://doi.org/10.1016/j.jbusres.2012.08.007

Liao J, Kickul JR, Ma H (2009) Organizational dynamic capability and innovation: an empirical examination of internet firms. Journal of Small Business Management47 (3): 263-286. http://doi.org/10.1111/j.1540-627X.2009.00271.x

Lin H-F, Su J-Q, Higgins A (2016) How dynamic capabilities affect adoption of management innovations. Journal of Business Research69 (2): 862-876. http://doi.org/10.1016/j.jbusres.2015.07.004

Mačerinskienė I, Survilaitė S (2011) Company’s value added and its intellectual capital coherence. Business: Theory and Practice12 (2): 183-192. http://doi.org/10.3846/btp.2011.19


Marzo G, Stefano Zambon D, Scarpino E (2016) Exploring intel-lectual capital management in SMES: an in-depth Italian case study. Journal of Intellectual Capital17 (1): 27-51. http://doi.org/10.1108/jic-09-2015-0075

Müller K, Rammer C, Trüby J (2009) The role of creative indus-tries in industrial innovation. Innovation11 (2): 148-168. http://doi.org/10.5172/impp.11.2.148

Nayak R, Padhye R (2015) Garment manufacturing technology. Cambridge, UK: Elsevier.Nieto MJ, Santamaría L (2010) Technological collaboration: Bridging the innovation gap between small and large firms*. Journal of Small Business Management48 (1): 44-69. http://doi.org/doi:10.1111/j.1540-627X.2009.00286.x

Nunnally JC (1967) Psychometric Theory (1st ed). New York: McGraw-Hill.OECD (2005) Oslo Manual: Guidelines For collecting and inter-preting innovation data (3rd ed). France: OECD Publishing.

Pavitt K (1984) Sectoral patterns of technical change: towards a taxonomy and a theory. Research Policy13 (6): 343-373. http://doi.org/10.1016/0048-7333(84)90018-0

Pavlou PA, El Sawy OA (2011) Understanding the elusive black box of dynamic capabilities. Decision Sciences42 (1): 239-273. http://doi.org/10.1111/j.1540-5915.2010.00287.x

Penrose ET (1959) The theory of the growth of the firm. New York: Wiley.Pérez-Luño A, Cabello Medina C, Carmona Lavado A, Cuevas Rodríguez G (2011) How social capital and knowledge affect innovation. Journal of Business Research64 (12): 1369-1376. http://doi.org/10.1016/j.jbusres.2011.01.014

Peterson RA, Kim Y (2013) On the relationship between coef-ficient alpha and composite reliability. Journal of Applied Psychology98 (1): 194. http://doi.org/10.1037/a0030767

Petty R, Guthrie J (2000) Intellectual capital literature re-view: measurement, reporting and management. Jour-nal of Intellectual Capital1 (2): 155-176. https://doi.org/10.1108/14691930010348731

Popa S, Soto-Acosta P, Martinez-Conesa I (2017) Antecedents, moderators, and outcomes of innovation climate and open innovation: an empirical study in SMEs. Technological Forecasting and Social Change118: 134-142. http://doi.org/10.1016/j.techfore.2017.02.014

Protogerou A, Caloghirou Y, Lioukas S (2011) Dynamic capa-bilities and their indirect impact on firm performance. Industrial and Corporate Change21 (3): 615-647. http://doi.org/10.1093/icc/dtr049

Purwihartuti K, Sule ET, Hilmiana, Muizu WOZ (2015) Orga-nizational learning and knowledge management. Mediter-ranean Journal of Social Sciences6 (5): 136-141. http://doi.org/10.5901/mjss.2015.v6n5s5p136

Ramadan BM, Dahiyat SE, Bontis N, Al-dalahmeh MA (2017) Intellectual capital, knowledge management and social capital within the ICT sector in Jordan. Journal of Intellectual Capital18 (2): 437-462. http://doi.org/10.1108/jic-06-2016-0067

Rijsdijk SA, Langerak F, Jan Hultink E (2011) Understanding a two-sided coin: antecedents and consequences of a decom-posed product advantage. Journal of Product Innovation Management28 (1): 33-47. http://doi.org/10.1111/j.1540-5885.2010.00779.x

Rufaidah P, Sutisna (2015) Kapabilitas dinamis UMKM industri kreatif Jawa Barat. Sosiohumaniora17 (1): 60-66. http://doi.org/10.24198/sosiohumaniora.v17i1.5674

Schumpeter J (1934) The theory of economic development – an inquiry into profits, capital, credit, interest, and the business cycle. Cambridge, MA: Harvard University Press.Singh B, Rao MK (2016) Effect of intellectual capital on dynamic capabilities. Journal of Organizational Change Management29 (2): 129-149. http://doi.org/10.1108/jocm-12-2014-0225

Spender J-C (1996) Making knowledge the basis of a dynamic theory of the firm. Strategic Management Journal17 (Winter 1996): 45-63. http://doi.org/10.1002/smj.4250171106

Spender J-C, Grant RM (1996) Knowledge and the firm: overview. Strategic Management Journal17 (Winter Special Issue): 5-9. http://doi.org/10.1002/smj.4250171103

Stengg W (2001) The textile and clothing industry in the EU. European Communities, Luxembourg http://ec.europa.eu/search/?queryText=stengg&query_source=GROWTH&page=1&filter=&swlang=en&filterSource=GROWTH&more_op-tions_date=*&more_options_language=en&more_options_f_formats=*#

Subramaniam M, Youndt MA (2005) The influence of intellectual capital on the types of innovative capabilities. Academy of Management Journal48 (3): 450-463. http://doi.org/10.5465/amj.2005.17407911

Suroso E, Azis Y (2015) Defining mainstreams of innovation: a literature review. In:Proceedings of First International Conference on Economics and Banking (ICEB-15), Indone-sia, 26-27 May 2014. http://doi.org/10.2991/iceb-15.2015.55

Survilaitė S, Tamošiūnienė R, Satrevics V (2015) Intellectual capi-tal approach to modern management through the perspective of a company’s value added. Business: Theory and Practice16 (1): 31-44. http://doi.org/10.3846/btp.2015.553

Teece D (2007) Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal28 (13): 1319-1350. http://doi.org/10.1002/smj.640

Teece DJ (2009) Dynamic capabilities and strategic management: organizing for innovation and growth. Oxford: Oxford Uni-versity Press.

Teece DJ, Pisano G, Shuen A (1997) Dynamic capabi-lities and strategic management. Strategic Manage-ment Journal 18 (7). https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z

The Indonesian Central Bureau of Statistics. (2018). Manufactu-ring companies www.bps.go.id/subject/9/industri-besar-dan-sedang.html

Tiwana A (2002) The knowledge management toolkit: orchestra-ting IT strategy, and knowledge platforms (2nd ed). Upper Saddle River: Prentice-Hall.

Vera D, Crossan M (2005) Improvisation and innovative perfor-mance in teams. Organization Science16 (3): 203-224. http://doi.org/10.1287/orsc.1050.0126

Walsh JP, Ungson GR (1991) Organizational memory. Aca-demy of Management Review16 (1): 57-91. http://doi.org/10.2307/258607

Wang CL, Ahmed PK (2007) Dynamic capabilities: a review and research agenda. International Journal of Manage-ment Reviews9 (1): 31-51. http://doi.org/10.1111/j.1468-2370.2007.00201.x

Wang D, Chen S (2013) Does intellectual capital matter? High-performance work systems and bilateral innovative capabi-lities. International Journal of Manpower34 (8): 861-879. http://doi.org/10.1108/ijm-07-2013-0167

Wang H-L (2014) Theories for competitive advantage. In: Hasan H (Ed) Being practical with theory: a window into business research. Wollongong, Australia: lulu.com, 33-43.

Wang Y-S (2016) Dynamic capabilities in fashion apparel in-dustry: emergent conceptual framework. Baltic Journal of Management11 (3): 286-309. http://doi.org/10.1108/BJM-02-2015-0051

Winter SG (2003) Understanding dynamic capabilities. Strategic Management Journal24 (10): 991-995. http://doi.org/10.1002/smj.318

Wold H (1982) Soft modeling: the basic design and some exten-sions. In: Jöreskog K, Wold H (Eds) Systems under indirect observation: Part I, 2: 1-54. Amsterdam: North-Holland.

Wu I-L, Chen JL (2014) Knowledge management driven firm performance: the roles of business process capabilities and organizational learning. Journal of Knowledge Management18 (6): 1141-1164. http://doi.org/10.1108/jkm-05-2014-0192

Wu L-Y (2006) Resources, dynamic capabilities and performance in a dynamic environment: perceptions in Taiwanese IT en-terprises. Information & Management43 (4): 447-454. http://doi.org/https://doi.org/10.1016/j.im.2005.11.001

Wu SH, Lin LY, Hsu MY (2007) Intellectual capital, dynamic capabilities and innovative performance of organisations. International Journal of Technology Management39 (3/4): 279. http://doi.org/10.1504/ijtm.2007.013496

Yuan HT, Joe S-W, Ding CG, Lin C-P (2013) Modeling technolo-gical innovation performance and its determinants: an aspect of buyer–seller social capital. Technological Forecasting and Social Change80 (6): 1211-1221. http://doi.org/10.1016/j.techfore.2012.10.028

Zahra SA, George G (2002) Absorptive capacity: a review, reconceptualization and extension. Academy of Management Review27 (2): 185-203. http://doi.org/10.2307/4134351

Zahra SA, Nielsen AP, Bogner WC (1999) Corporate entrepre-neurship, knowledge, and competence development. Entre-preneurship Theory and Practice23 (3): 169-189. http://doi.org/10.1177/104225879902300310

Zahra SA, Sapienza HJ, Davidsson P (2006) Entrepreneurship and dynamic capabilities: A review, model and research agenda*. Journal of Management Studies43 (4): 917-955. http://doi.org/10.1111/j.1467-6486.2006.00616.x

Zheng S, Zhang W, Du J (2011) Knowledge‐based dynamic capa-bilities and innovation in networked environments. Journal of Knowledge Management15 (6): 1035-1051. http://doi.org/10.1108/13673271111179352

Zollo M, Winter SG (2002) Deliberate learning and the evolution of dynamic capabilities. Organization Science13 (3): 339-351. http://www.jstor.org/stable/3086025