Leveraging Strategic Innovation and Process Capabilities for Intellectual Capital Initiative Performance of Higher Education Institutes (HEIs): A Knowledge-Based Perspective

This study attempts to investigate the “dynamic IC transformation process” namely “knowledge inputs” → “processors” → “knowledge outputs” (I →P →O) model within the context of higher education institutes (HEIs) in Pakistan. In this knowledge era, HEIs are considered repositories of “knowledge” that are continuously reconfiguring and nurturing themselves with existing knowledge assets. Therefore, this study proposes a “dynamic IC transformation” (I →P →O) model to analyze the relationship between intellectual capital (IC) initiatives as “knowledge inputs” (I), “strategic innovation” and “process capabilities” as “processors” (P), and the performance of HEIs as “knowledge-outputs” (O). To test the model, we conducted a survey (questionnaire) involving 258 usable responses from teaching and non-teaching staff working in public and private HEIs in Pakistan. In this sense, we employed a parallel mediation analysis through process macro to evaluate the indirect effects of “processors” between “knowledge inputs” and “knowledge output.” The study identifies that “knowledge inputs” significantly influence the performance of HEIs in terms of “knowledge output.” However, the explanatory power of human capital as an essential element of IC initiatives is more detrimental than that of structural and relational capital initiatives. Further, results indicate that “processors,” i.e., “strategic innovation” and “process capabilities,” partially mediate the relationship between “knowledge inputs” and “knowledge output.” Thus, this study contributes to ongoing academic debates about how the “dynamic IC transformation model” works in producing “knowledge outputs” by leveraging “strategic innovation” and “process capabilities” of HEIs. Further, this study also offers fruitful implications for academicians that may turn the IC initiatives as “knowledge inputs” into the development of viable opportunities for HEIs as “entrepreneurial” or “stakeholder” universities by valuing their knowledge assets.