IMPACT OF DETERMINANTS OF THE INTELLECTUAL CAPITAL ON ORGANIZATIONAL PERFORMANCE: CASE OF MEEZAN BANK & FAYSAL BANK

Abstract

Purpose: The purpose of this research is to determine the impact of intellectual capital (Human capital, relational capital & structural capital on performance of the firm. The previous researches have clearly suggested that, there has been a direct and significant relationship between Intellectual capital and performance of the firm. Firm performance have been derived from a number of factors however, for this research the researcher has narrowed down its scope with the determinants of Intellectual capital. Methodology: Banks have been the target for this research following a quantitative research methodology. The sample size for this research includes 380 employees. The statistical test used during the course of this research are Regression analysis and Pearson moment correlation. Findings: The findings from the test suggest that all the hypotheses are accepted which measn that IC (human capital, relational capital and structural capital has significant impact on firm performance. The reason is that the Sig. P value of every variable (human capital less than 0.05), (relational capital is less than 0.05) and (structural capital is less than 0.05). The test also shows that relational capital has the stronger relationship with the firm performance as compared to others (it has the highest beta in the coefficients table) Implications: The study is useful for HRM managers and Banks policy making department like Compliance and Governance who provides reporting to SBP. The study of intellectual capital will help in strengthening the firm performance. On the other hand, they also help in defining a policy which serves for the future betterment of the bank