The effect of intellectual capital on the performance of bank branches in Gilan province

Academic Thesis for Master's Degree

Field: Business Management Major: Transformation Management

Abstract

The present research was conducted with the aim of investigating the effect of intellectual capital on the performance of bank branches in Gilan province. The method of carrying out a descriptive research is of the correlational descriptive type, and in this regard, hypotheses were developed as follows:

main hypothesis:

there is a significant relationship between intellectual capital and the performance of bank branches in Gilan province. There is a significant relationship between structural capital and bank branch performance in Gilan province.

2. There is a significant relationship between human capital and the performance of bank branches in Gilan province.

3. There is a significant relationship between customer (relational) capital and the performance of bank branches in Gilan province.

The statistical population of this research includes all bank branches in Gilan province, a sample of 150 branches was selected and analyzed according to Cochran's formula, and the results of correlation analysis and structural equation model between research variables showed that there is a relationship between intellectual capital (structural capital, human capital and customer (relational) capital) and the performance of bank branches in the province. Guilan, there is a significant relationship.

Key words: human capital, customer (relational) capital, structural capital, performance

Chapter 1

Generalities of the research

1 1) Introduction

By reviewing the past, it can be acknowledged that 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. As an example, Sataraman[1] et al. (2002) quoting Kendrick, an American economist, states 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 [2] (1997) 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. The effects of human capital on business unit performance in service companies are considered very important because these companies rely more on intangible capacities and resources (Mansion and Bentis[3], 2013).  On the other hand, during the last two decades, the increase in business competition and the emergence of new information technologies have led to the importance of intangible assets becoming more prominent as the most important factor in the valuation of companies (Lu[4], 2001). The measurement and reporting of intangible assets is one of the attractive topics for accounting researchers, and this attraction has increased with the increase in the difference between the book value and the market value of companies (Biati [5], 2005). Concerns about the non-recognition of intangible assets are increasing. This concern stems from the conservative nature of asset recognition criteria and concerns about the reliability of recent accounting standards (Oliviera et al., 2010). Therefore, high levels of uncertainty limit the ability to identify some intangible assets in business units that invest in intangible assets, and this issue causes that correct information is not transferred to external parties. This problem is more apparent for companies that rely on knowledge. However, it can be said that human capital information has informational content. The information that is published about the competence and competence of the employees has a positive and significant relationship with the value of the company. The disclosure of this information does not lead to short-term changes in the market value (Gammerschlag[7], 2013). Intellectual capital is a capital beyond physical assets and tangible assets. Today, the contribution of intellectual capital can play an important role in creating added value and gross domestic product due to knowledge and information and as a result of wealth production in the knowledge-based economy. For this reason, at the level of economic enterprises, the performance of companies can be influenced by intellectual assets and human capital. With these interpretations, in this chapter, it was mentioned to give an introduction about the research topic. In the rest of the chapter, discussions about the statement of the main and fundamental problem of the research, the importance and necessity of the research, and the objectives of the researcher are mentioned, and the hypotheses and theoretical framework of the research are explained in detail, and finally, the conceptual and operational definitions of the research variables and the scope of the research are described.

1 2) Statement of the problem

In the last two decades, its performance and strategic management has become one of the interesting and interesting topics, in this regard, performance management is a continuous and comprehensive action in the field of interaction of training, evaluation and performance in which the following three management philosophies are applied: management philosophy based on work results; Collaborative management philosophy; Philosophy of total quality management. In line with the application of these three management philosophies, paying attention to individual development, group and team development, and organizational development, both in the concept of organizational growth and economic performance of the organization, also pays attention to the importance of various jobs in the organization, and because this process is constantly evolving, it leads to the continuous and sustainable development of human resources and intellectual capital in organizations and ultimately the development of national human resources. Undoubtedly, if the philosophy of performance management is effectively applied in the organization, it will lead to the sustainable development of human resources, and the sustainability of human resources development will also help in the regular implementation and improvement of the process (Mojtahedzadeh et al., 2009). In the meantime, the performance is the correct and effective direction to the effective and influencing factors on the performance of each organization (human resources, organizational processes, managers, customers) in order to influence the current policy or program path in order to achieve those goals and share and mediate the performance results in persuading those goals (Mansion and Bentis [8], 2013). On the other hand, all management approaches have goals in their implementation, which is usually the most basic goal of achieving the desired results based on the previous plans of the planners in the organization and their performance. According to the reports of the National Productivity Organization at the end of 2011, factors such as customer satisfaction, employee satisfaction, effective strategic planning, smoothing processes, and the work performance of managers are factors that have strongly influenced the performance of Iranian organizations and have caused them to emphasize more on performance improvement. To put it better, it is a process based on a series of activities and it is built in a way that should be designed by guaranteeing the continuous improvement of the performance of individuals and work groups in the direction of strategic goals and organizational effectiveness (Habibi, 2013). According to the reports of the International Monetary Fund and the Central Bank of the Islamic Republic of Iran at the end of September 2013, Iranian banks are not functioning efficiently due to the low competition among employees, the impossibility of applying management due to predetermined conditions and variables, the fixed rate of granted facilities and the existence of inflation beyond that, the problems in granting facilities and the lack of a process of simplifying the provision of facilities within the framework of the usury-free banking law, the payment of mandatory facilities and the lack of capital increase of banks by the government. In other words, banks cannot have the maximum output by using existing inputs (Mahboubi, 2013), and the banks of Gilan province (the statistical population of this research) are not exempt from this rule. The results of many researches about the role and importance of intellectual capital in the growth and development of organizations and sometimes the growth of human societies emphasize the point that no society has developed unless it has developed its intellectual capital. Today, researchers have realized that intellectual capital is an undeniable necessity of any organization and is an endless capital for the growth and development of organizations and countries, so that during the past half century, a significant part of the progress of developed countries has been due to the development of their intellectual capital. If in the past labor, capital and land were considered the main factors of production, today changes in technologies, human power factors and improvement of the level of intellectual capital are considered as growth factors (Norouzi, 2014). Meanwhile, intellectual capital consists of all knowledge-based resources that produce value for the organization but are not included in financial statements and includes dimensions such as structural, human and customer capital (Salehinjad, 2012). In addition, valuable experiences of successful and leading organizations about the value of intellectual capital show its importance in organizations.