Role of Intellectual Capital in Women Entrepreneurs' Business Performance

Role of Intellectual Capital in Women Entrepreneurs' Business Performance

Sakinah Mat Zin, Khamisah Abd Manaf
DOI: 10.4018/978-1-5225-7479-8.ch011
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This chapter presents an in-depth analysis on the relationship between intellectual capital and business performance in view to highlight gaps in the knowledge of women entrepreneurship in Malaysian small and medium enterprises (SMEs). The creation of intellectual capital is crucial to cope with organizational competitive issues in the present dynamics of globalized economics. A conceptual model is developed linking different dimensions of intellectual capital to business performance. In doing so, the sample of 167 respondents from women SME entrepreneurs in Kelantan was utilized. The survey data were analyzed using SPSS version 22. The results of the study reveal that intellectual capital significantly influences business performance. This enables entrepreneurs and scholars to make appropriate decisions that can foster business progress. Moreover, the empirical study presented in this chapter is the first of its kind over women SMEs from multiple sectors operating in Kelantan state located at the east coast of Peninsular Malaysia.
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European and Euro Asian women have profited from entrepreneurship as means of survival and employability (UNECE, 2004). They have been operating actively in numerous organizations and contributing to national economies (United Nations, 2006). The situation is similar to Malaysia, whereby women entrepreneurs have increased in numbers and promoted the economy for the past three decades (Teo & Chong, 2007). Malaysian women entrepreneurs can be categorized into employers, freelance individuals and self-employed persons (Jamilah, 1992). Setting aside the classification of employment, the business performance of women entrepreneurs has become a vital expanse of current policy and academic discussion. Notwithstanding this matter, little thorough study has been embarked specifically to address the issues pertaining to women entrepreneurs’ business performance in Malaysia.

Jamak, Ali and Ghazali (2014) highlighted that high competition, lack of business networks and lack of management skills are the main problems facing the Malay entrepreneurs, particularly women. Their inability to build good business network creates major barrier to develop their business, gain visibility and achieve competitiveness (Abidin, Harun, & Rahman, 2014). SME entrepreneurs are having troubles in getting skilled or unskilled workers, besides facing high workers turnover (Tapsir, Abu Kasim, Mohd. Hafizudin, Mohd. Syauqi, & Rosnani, 2012). As affirmed by Mohd Johari Baharom, Deputy Minister of Agriculture and Agro-based industry in the Agro-based Industry Entrepreneurs Seminar 2010, TEKUN (Entrepreneurship Group Economic Fund) borrowers lack basic business skills, thus, are more likely to be exposed to the risks of failing in business venture. (BH, 2 June 2010). It is clear that women SME entrepreneurs depend solely on the tangible asset (financial capital) and often ignore intangible resource like intellectual capital. In fact, most studies on SME performance are focusing more on technology but lacking in term of resources especially intellectual capital (Ngah, Abd Wahab & Salleh, 2015).

Moreover, it is of utmost importance for women entrepreneurs to realize the internal resources that the enterprise possesses and controls coherent with the orientation of management of a firm, especially while they are competing in this puzzling globalized business ground. In line with resource-based view (RBV) theory, an institution or organization shall attain perpetual competitive advantages by executing strategies that exploit their internal strengths (Barney, 2001), specifically intellectual capital.

Key Terms in this Chapter

Intellectual Capital: Is non-monitory invisible asset (not revealed on the balance sheet), knowledge, and capabilities of a company that have been formalized and leveraged; significantly contribute to the provision of the organizational strategy and competitive advantage.

Business performance: Is a set of analytic processes that enables the management of an organization's performance to achieve pre-selected goals.

SMEs: Are businesses or independent firms which employ fewer than a given number of employees.

Women Entrepreneurs: Are women running their own businesses.

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