The strategic importance of intellectual capital in the non-profit sector

Abstract

Purpose – This paper aims to examine five key strategic management concepts: industrial organisation (I/O), resource-based view (RBV), knowledge-based view (KBV), balanced scorecard (BSC) and intellectual capital (IC) within the non-profit context and to determine which is most applicable in the non-profit sector. Design/methodology/approach – This paper reviews the above concepts in the light of the unique non-profit environment. Findings – The IC concept is more effective compared with other strategic management concepts within the non-profit context. IC is an important resource that non-profit organisations need to develop in order to gain sustained strategic advantage. Research limitations/implications – This paper helps to build a nascent body of literature suggesting that the concept of IC is the most effective strategic management concept in NPOs. The increased awareness of the IC concept in the sector, as a result of this paper, is likely to generate further research from both non-profit practitioners and scholars. Originality/value – Very little systematic research has reviewed the applicability of strategic management concepts within the non-profit context. The paper acts as the first attempt to fill this gap.