The impact of intellectual capital-enhancing HR practices and culture on innovativeness—mediating role of knowledge management processes

Abstract

PurposeThe study examines the effect of human and social capital-supporting human resource (HR) practices and structural capital-supporting culture on innovativeness and the mediating role of knowledge management (KM) processes in the knowledge-intensive Indian IT sector.Design/methodology/approachUsing a quantitative approach, the authors collected data from 387 employees in 30 IT organizations via a questionnaire survey. The authors analyzed data using structural equational modeling using AMOS 26.FindingsThe results indicate complete mediation of KM processes between human capital-HR (HCHRP), social capital HR (SCHRP), bureaucratic culture (BOC) space and innovativeness. KM processes partially mediated the effect of innovative-competitive culture (IOC) on innovativeness. KM processes have a robust predictive capacity for innovativeness, suggesting that human capital-supporting HR and innovative-competitive culture significantly contribute to KM Processes and innovativeness, respectively.Practical implicationsThis study provides practical insights to HR and knowledge managers to leverage their HR practices and organizational culture for improving innovation performance in KISO.Originality/valueThe paper adds to the intellectual capital and KM literature by exploring the mediating role of the KM process in the underlying mechanism suggesting that intellectual capital can enhance HR and culture, leveraging a firm's knowledge resources for innovativeness. It fills a research gap by providing original evidence based on primary data collected from India's IT sector.