Studying the impact of intellectual capital as a knowledge management tool on the financial performance of the banking industry

Dissertation for receiving the master's degree "M.A."

Abstract:

The purpose of this research is to investigate the relationship between intellectual capital management and financial performance in Parsian Bank.  For this purpose, after reviewing the research literature, 4 hypotheses including one main hypothesis and three sub-hypotheses were formulated. To test the research hypotheses, a questionnaire distributed among the statistical community was used. The statistical population of this research consists of all the employees and managers of Parsian Bank, Gharb Tehran branch, whose number is 472 people, of which 450 people were selected as a sample. In this research, the random cluster method has been used. In this research, descriptive statistics techniques have been used to investigate and analyze demographic variables and the Kolmogorov-Smirnov test of normality and non-normality of the variables. Also, Spearman's correlation test and multiple regression analysis were used to analyze the hypotheses. The results show that the correlation between intellectual capital and financial performance with knowledge management is 0.557 and this correlation is at a high level. Also, the coefficient of change indicates that 31% of the changes in the dependent variable of financial performance are covered by the independent variable of intellectual capital, and the beta obtained in the regression for the variable of human capital is 0.448, for structural capital is -0.227, and for customer capital is 0.556, and except for structural capital, the rest of the hypotheses are significant since their level of significance is less than 0.05. According to Fisher's F test, except for capital There is a linear relationship between other variables and financial performance because their significance level is less than 5%. Keywords: intellectual capital, financial performance, human capital, structural capital, customer capital, knowledge management. Organizations are entering the knowledge-based economy, an economy in which knowledge and intangible assets are recognized as the most important competitive advantage of organizations. One of the components of intangible assets is intellectual capital, which has an important impact on the organization's performance and strategic implementation, therefore, the identification, measurement and management of intellectual capital is of particular importance and leads to the observation of the true value of organizations (Vatani, 2019). Drucker [1] (1993), a famous management thinker, says: "We are entering a knowledge society in which the main economic interests are more capital, more natural resources and more labor and so on. is not The 21st century is the century of the knowledge economy. In the knowledge economy, knowledge or intellectual capital is more preferred as a factor of wealth production compared to other tangible physical assets. In this economy, intellectual assets, especially human capital, are among the most important assets of the organization, and the potential success of organizations is rooted in their intellectual activities rather than tangible assets (Sedghi Goldi, 2016). Today, the way of using intangible assets has a very important effect on the position and survival of organizations. So that this issue has created a new field of study and research in management. In a simple classification, intangible assets are divided into two categories, one of the most important components of which is intellectual capital, which has an important effect on the performance and implementation of organizational strategies, therefore, the identification, measurement and management of intellectual capital is of particular importance (Goldi Sedki, 2016). This research is an effort by the researcher to measure the impact of intellectual capital and its three components on the financial performance of banks (for example, Parsian Bank). Its importance and the goals of the research that the researcher is considering are presented so that the reader's mind is on a clear path regarding the research and the main framework is established in the reader's mind. 2-1) Statement of the research problem In the 20th century, the economy was based on industry. In this century, every company and every country that had more physical assets and material capitals produced more wealth. But the 21st century economy is based on knowledge. For example, Sataraman [2] and his colleagues, citing Kendrick, one of the American economists, state that in 1925, the ratio of intangible assets to tangible assets was 30 to 70. But in the 1990s, it increased from 63 to 37. Stewart [3] considers human capital as the most important asset of the organization. Therefore, companies with higher intellectual and human capital are expected to have higher financial performance.

Intellectual capital is a capital beyond physical assets and tangible assets.Today, the contribution of intellectual capital due to the production of knowledge and information and as a result of the production of wealth in the knowledge-based economy can play an important role in creating added value and gross domestic product. For this reason, at the level of economic enterprises, the financial performance of companies can be affected by intellectual assets and human capital. During the industrial age, it was the cost of assets, factories, equipment and raw materials that were necessary for the success of a business, but in the information age, it is the effective use of intellectual capital that is usually effective in the success or failure of a company. Therefore, managers need to be able to measure the effect of management efforts on the performance of their organization. Most of the practical indicators of knowledge management are focused on measuring knowledge assets or intellectual capital and assume that the output of knowledge management is effective on the amount of investment of the organization. Intellectual capital is knowledge that can be turned into profit and is known as hidden assets. Therefore, its use increases the company's competitiveness and future profitability. Intellectual capital is an intangible and intangible capital, and it is difficult to measure quantitatively. But on the other hand, it should be noted that the presentation of written indicators and even as few as possible can justify the use of intellectual capital in the organization for managers. This statement of Lord Kelvin can be true here and shows the importance of developing indicators and measures to measure knowledge management and intellectual capital: "When you can express and measure what you are talking about quantitatively and numerically, you can get a proper understanding of it. But on the other hand, when you cannot express what you mean quantitatively and numerically, you cannot actually get a proper understanding and understanding of it." It is undeniable that it plays an important role, so it is necessary to identify its contribution in financial statements (Madison[4] 2011).

In other words, the industrial economy gave way to a knowledge-based economy. In the industrial economy, the main factors of economic wealth production are physical and tangible assets such as land, labor, money and machinery. and it is the combination of these factors that ultimately leads to the production of wealth. In this type of economy, knowledge plays an insignificant role as the key factor in creating value and wealth. In the knowledge-based economy[5], knowledge and intellectual capital[6] are assigned a more important place as the main factor of wealth production compared to other tangible and physical assets. In the current competitive markets where the goal of organizations is to gain more market share by creating competitive advantages, the success of an organization depends on the use and management of the element of knowledge[7] and intellectual capital in all organizational dimensions. It will replace tools, capital, raw materials and physical labor in business activities. In other words, the relative advantage of an economic organization is no longer dependent on the amount of physical capital such as land, equipment or production facilities, and value creation in organizations is achieved through intangible assets, which we call intellectual capital. Discovering and managing the intellectual capital of a country or an economic organization requires the creation of a system based on variable factors that helps to reveal and identify intangible capital. The philosophy of existence of organizations and social institutions, especially official organizations, is to achieve the goals that have been established for this purpose. Organizations are a tool to respond to the needs of the society, therefore, they are in a sensitive situation according to the expectations that are expected from them. It should be noted that the emphasis on human capital leads to a better understanding of the hidden values ??of individuals, companies, institutions and societies now and even in the future for better use of intellectual capital. What will create economic value in the future world is not oil and gas and things like them, but the wise children of scientists and knowledge lovers of every nation