Intellectual Capital Impact on Organizations’ Performance

The abundance of traditional financial evaluation methods reflects historical performances. It is necessary to consider such elements which add value off-balance sheet towards growth. It is argued that there is the difference between book value and market value of a firm, and that difference could be explained by intellectual capital profile. The study is proposed to investigate the impact of six intellectual capital elements human capital, structural capital, customer capital, technology capital, social capital and spiritual capital on the overall performance of the firms. The impactis diagnosed. A developed questionnaire is used to conduct the study. Correlation analysis depicts the data, OLS is used to conduct the analysis.


INTRODUCTION
In the current century, people will tend to do more brainwork,and the tendency of physical activities will reduce. The process of economic growth will be more driven by knowledge and information rather than the production process. The knowledge and information referred to intellectual capital never appears on financial reports but have a significant impact on firms' performance as compare to physical assets (Akpinar & Akdemir, 1999). The globalization phenomenon has increased the interaction of individuals for their common benefits and the quest for better living standards . Sharia screening process in a country like Pakistan having similarities and differences with other counties (Waris, Hassan, Abbas, Mohsin, & Waqar, 2018).Financial Deficit has widened the importance of equity capital raising ) .In the current scenario, intangible resources,knowledge-based economies,and various competencies have become crucial elements in the growth and progress of firms (Wang, Wang, & Liang, 2014). According to , to meet the growing financial challenges in the current atmosphere, credit risk analysis along with remodeling of current practices and advancement of procedures have become pivotal for sustained progress. Intellectual Capital is one of the key determinants of financial performance of banking sector of Pakistan (Shehzadi, Abbas, & Hassan, 2018). Economic development has seen different phases in which, Developing country like Pakistan is being engaged in the formulation of different tools to boost the economy (Hassan, Abbas, & Shehzadi, 2008). Even investment avenues which pool the short investment and makes an idle sector of economy active are becoming part of the economy of Pakistan(Abbas S. , 2017). According to Hashim, Adeyemi, & Alhabshi,(2018), intellectual capital refers to knowledge and expertise which adds value to the performance of the organization. The definition also referred to the knowledge management process is intellectual capital. , validated through their research findings that cognitive, emotional and behavioral determinants affect consumer approach. Similarly, intellectual capital indulgence significantly approaches the stakeholder's interest towards the organization. Bayburina & Golovko(2009), explained intellectual capital consists of human capital, network capital, process capital, innovation capital and client capital. All these characteristics lead to the development of competitive advantage within the organization. The induction of innovation in the current practices surely helps to achieve competitive advantage (Abbas S. K. In the current economic structure, the quality human capital structure favors to become a developed nation and to maintain that status is everyone priority (Berzkalne & Zelgalve, 2014). Furthermore, the competitiveness can be increased if the available workforce is knowledgeable, proficient and adaptable. Therefore, many nations are continuously making efforts to develop human capital and enhancing mental skills and intellectual capacity of the people(Hashim, Adeyemi, & Alhabshi, 2018).

II.
LITERATURE REVIEW Wang & Liang (2014), explained intellectual capital is a sum of knowledge competencies which help organizations to achieve growth and sustainable competitive advantage. Steward (1994), explained the intellectual capital concept was introduced to differentiate firms' book value and market value. While defining the concept of intellectual capital, there is a great deal of convergence in opinion. Meanwhile, most scholars generally agree that intellectual capital contributes towards value creation and value extraction of organizations through knowledge not only held by employees but also stored within organizations database, systems, processes and relationships ( Roos(2017) , contended the process through which a firm creates, develop and manage its knowledge resources and intellectual capital is critical for the attainment of competitive performance. Chen & Wang(2018) found that the role of knowledge management and intellectual capital has become crucial in the information technology sector. Likewise, Kianto (Baron, 2011).
The customer capital is organizations' relationships with customers, suppliers,and other people and structural capital consists of organizations' processes, methods, concepts, and overall system owned by the organization (Akpinar & Akdemir, 1999). The extended use of information technology, innovation, research and development in organization termed as technological capital whereas, social capital consists of norms and relationships resulted from organizational behavior which shapes the quality of social interactions among stakeholders contributing to the growth of the economy(Hashim, Adeyemi, & Alhabshi, 2018). Spiritual capital emerges from ethical, spiritual and religious practices individuals adhere tothe workplace. Marques (2008), found spiritual behavior within organizational conduct leads to better corporate performance. Subsequently, the study is focusedon determining the impact of human capital, structural capital, social capital, customer capital, technological capital and spiritual capital on the overall performance of firms .

III.
RESEARCH METHODOLOGY Study adhere to a nature in which primary data was required,so primary data collected through developed questionnaire.
The questionnairewas adopted from (

IV.
CONCLUSION Intellectual Capital importance has raised with the performance evaluation for organizations in today's era. Furthermore, the low-income level has become the reason to develop the importance of intellectual capital, especially in underdeveloped nations (Abbas S. K., . It also has seen that Human capital relationship with organization performance is not only the key determinants of performance. As, Quality Education in Pakistan has become a challenging part ever(Maryam, Amen, Safdar, Shehzadi, & Abbas, 2018).So, Human Capital impacts but not much significant. Moreover, Information sharing effects broadly to employees working behavior(Hassan, Asif, Waqar, Khalid, & Abbas, 2018) and employee engagement based on services environment of an organization . It has seen that green consumption is much important now in Pakistan (Hassan H. , Abbas, Zainab, Waqar, & Hashmi, 2018). So study comprehend that Structural Capital, and technological capital having a significant impact at organization performance more than Human capital but still this effect not much stronger. The Strongest effect upon Organizational performance measured in the model is of customer, social and spiritual capital. Results are consistent with (Bontis, Chua Chong Keow, & Richardson, 2000)in the nature of variables. Intellectual Capital is a very important and emerging area of research. The study is implying top management of organizations and regularity authorities mainly. Future researchers could check the effect of intellectual capital with mediating role of motivation or dissatisfaction upon organizational performance. Even they