Intellectual Capital and Organizational Performance

In the knowledge-based economy, intellectual capital (IC) is considered an essential intangible resource for business success, and it is seen as the primary source of sustainable competitive advantage for both for-profit and nonprofit enterprises (Dumay et al., 2020). According to Inkinen (2015), the stream of research regarding the influence of IC on firm performance began to grow in the early 2000s and mainly focused on firms operating in the for-profit sector. However, as suggested by Dumay et al. (2020), IC studies should embrace a multifaceted perspective by proposing research covering subjects such as nonprofit organizations (Kong, 2010), IC utilization in practice (Dumay, 2013), innovation (Lerro et al., 2014), sustainability (Matos & Vairinhos, 2017), education (Secundo et al., 2018), and innovations in IC disclosure (Lombardi and Dumay, 2017).

This chapter concerns the role and characteristics of social enterprises (SEs), within nonprofit organizations, and it describes their legal evolution as well as their main dimensions (i.e., entrepreneurial, social, and inclusive ownership governance). Social cooperative enterprises (SCEs), as the most adopted legal form for SEs, represent one example of hybrid organizations that blur the boundaries between the non-profit and for-profit sectors by adopting social missions while generating profit to sustainably accomplish that missions. Therefore, the development of SCEs, both internationally and in Italy, has been highlighted; as well as their evolution in the literature on economics and management studies has been presented.

This chapter introduces the reader to the topic of the book. It starts by describing the pivotal role of intellectual capital (IC) in the knowledge-based economy. Many authors have contributed to enrich the economic and management literature on intellectual capital by providing numerous definitions, measurement methods, and guidelines for its reporting. However, most of the studies focused their attention on companies operating in the for-profit sector. Therefore, there is a need to unveil what are the components and effects of IC in terms of human, relational, and structural capital can have on nonprofit organizations, especially with regard to SCEs’ multidimensional performance. To this purpose, the chapter provides a descriptive literature review by investigating the concepts of IC in the nonprofit sector to highlight the strategic role of IC for social cooperative enterprises. Finally, it also provides an innovative multidimensional measuring system of IC for SCEs by the development of a set of key performance indicators (KPIs) able to capture the value generated by human, relational and structural capital.

This chapter addresses the relationship between intellectual capital and firms’ performance, with a focus on hybrid organizations. For these enterprises, the concept of performance overcomes the traditional one, as “profit maximization.” In fact, organizational performance is defined as multidimensional considering that these hybrid organizations adopt a social mission while generating profit to sustainably accomplish this mission. Therefore, the performance can be divided into social or mission) and economic dimensions. Hence, drawing on the literature, the chapter offers an overview of the studies regarding the relationship between IC and the performance of hybrid organizations as well as the hypotheses development, devoted to testing the influence of human, relational, and structural capital on SCEs’ performance.

This chapter involves an extensive overview of the various methodological aspects of the study. It provides insights into the adopted mixed-method by illustrating the questionnaire design, as the most common tool used in social sciences, especially when it used, in an exploratory way, to measure attitudes and/or behavior of a population or a sample; and the statistical analysis tools (principal component analysis and ordinary least squares model) utilized to identify the main components of IC for SCEs and to investigate the influence of human, relational, and structural capital on SCEs performance. Thereby, it has been provided a detailed and empirical elaboration of data.

This chapter presents the discussion of the results that emerged from the analyses developed in the previous chapter. In particular, the main components of IC subdimensions and of the network’s provided services have been described; as well as the IC KPIs influencing SCEs’ mission and economic performance. Finally, the chapter provides both theoretical and practical implications, addresses the main limitations, and sets up the foundations for various avenues for future research.

The importance of knowledge-based resources, such as intellectual capital, in the nonprofit sector cannot be understated, considering that it has been recognized as a key factor in the success of organizational performance and value creation processes. Despite this, too little research has been conducted within the context of social enterprises and, thereby, in social cooperative enterprises.