Investigating the mediating role of intellectual capital in the relationship between transformational leadership and employee perception of business performance

The challenge of measuring the effects of intellectual capital on sustainable financial performance, in particular the rate of return and profitability of a company, is a research issue that needs to be dealt with more deeply, since, according to evidence, the knowledge available in this area is very limited. Also, although the strategic role of these assets has been well accepted, there is little knowledge about how their interaction affects organization and its performance. This paper expands the literature of intellectual capital by enriching research on the interrelationships between the various dimensions of intellectual capital. There are limited studies that consider human capital as the driving force behind of the other intellectual capital. Contrary to previous studies, we focus on intellectual capital in terms of informational, structural, relational, and human capital, and explore the relationship between these four types of intellectual capital. On the other hand, the existence of transformational leadership can be a key factor in the creation and development of intellectual capital for the long-term success of an organization. Hence, the purpose of this study is explaining the nature of the components of intellectual capital in small and medium enterprises and to explain their mediating role in the relationship between transformational leadership style and performance.

THEORETICAL FRAMEWORK

Intellectual capital can be defined as a set of knowledge, experience, intellectual property, and specific knowledge capabilities that a company can use to generate wealth or to gain competitive advantage. According to the resource – advantage theory, argued that competitive advantage was based on intangible resources, and in particular, it includes human, relational, structural and informational capital. To better understand the interaction between these components of intellectual capital, several researchers have attempted to identify the nature of relationships that exist between them. They found that human capital might have a positive impact on relational capital and these two components, in turn, may have a significant impact on structural capital. It is also shown that information capital indirectly and through structural capital, affects on relational capital and ultimately affects on business performance.on the other hand, transformational leaders, by providing an area of ​​autonomy and participation of employees in decision making, create the field of promoting innovative behaviors in human capital. these innovative behaviors increase the effectiveness of human capital in terms of return on investment. hence, these leaders support the professional development of their employees in pursuit of the benefits of human capital.

This research is applied in terms of purpose and in terms of data collection, is a descriptive and correlation research based on the covariance-oriented of structural equations modeling . this research was conducted at the level of individual analysis and its population consists of senior managers of small and medium enterprises active in the food industry throughout the country in 2016. based on the morgan table, 400 people were selected as samples. finally, from a total of 450 distributed questionnaires to participants, 368 questionnaires (81.7%) were returned. the main instrument for collecting data in this research is a questionnare by likert scale. the face validity of the questionnaire was reviewed and confirmed by the experts and cronbach's alpha coefficient was used to determine the reliability of the questionnaire. finally, data analysis was performed using spss 19 and lisrel 8.5 software.

Statistical analysis indicated that the transformational leadership style had a significant and direct effect on human capital (with an intensity of 0.55). further, evidence suggests that human capital has a significant impact on informational capital. in addition, the findings suggests a significant impact of informational capital on structural capital (with an intensity of 0.45), and the weaker impact of structural capital on relational capital with an intensity impact of (0.18). finally, findings in this regarding that how intellectual capital impact on business performance, show that relational capital is the only component that has the potential to have a direct impact on performance.

CONCLUSIONS & SUGGESTIONS

According to the findings of this study, managers of selected companies should adopt a transformational leadership style in their management priority. also, the transformational leaders of these businesses must realize the harmonious and balanced development of intellectual capital dimentions so that their organizations can use their entire knowledge base. strengthening of informational and structural capitals can play an important role in avoiding the companies from the red ocean of competition. also to improve relational capital, managers must be committed to customer-orientation, create more profitable distribution channels, increase their market share and improve their brand image.