Exploring Multidimensional View of Intellectual Capital and Business Ethics on Organizational Performance by Using Bootstrapping Method: Evidence from Pakistani Pharmaceutical Industry

Abstract

The objective of this research is to examine the effect of business ethics (BE) and intellectual capital (IC) on the organizational performance (OP). In order to run this study, a conceptual model was designed based on the literature review, and the employees of the knowledge-based organization in pharmaceutical sector were surveyed using a closed-ended questionnaire. Modern successful and thriving organizations are those that create IC and convert it into applicable methods to improve their activities and performance within the boundaries of BE. This research is exploratory and quantitative in nature: 400 responses were directly gathered from the employees of the pharmaceutical industry through five-scaled questionnaire. This research examined the direct and indirect effect of BE and IC on the OP. Structural equation modeling (SEM), descriptive statistics, correlation, multiple regression techniques were used to analyze the impact of IC and BE on the performance. Bootstrapping method is employed in order to test the mediating effect of variables. Two-step SEM was used to the models to regress the cause and effect relation. The findings depicted that there is a very significant effect on BE and IC in the performance of pharmaceutical organizations. General BE, ethics in finance, ethics in human resource management, and ethics in sales and marketing have direct and significant impact on the OP. Human capital, structural capital and relational capital have significant indirect (mediating) effect on the performance of the pharmaceutical industry. Finally, it has been concluded from the results of the research study that IC is the major contributor of the OP as a mediating variable with defined set of principles of BE in the pharmaceutical sector of Pakistan. JEL classification:M20

Application of the Theory of Planned Behaviour Model for Examining Customers’ Intentions towards Islamic Hire Purchase Financing

“…According to Anderson & Gerbing (1988), the collected data should follow the normality pattern, and it is a prerequisite for structural equation modelling and other SEM based multivariate statistical techniques. Thus, we converted all the responses into Z score, and the results of descriptive statistics showed that kurtosis values lay between ±3, and skewness and standard deviation values were in the rage of ±1.5, thus, this further proved that our data was following the normality pattern (Ahmed et al, 2017).…”

“…The values of Cronbach's Alpha and composite reliabilities, which are over 0.65 and just approach 0.70 for all the factors, showed that the reliabilities meet the minimum criterion of threshold, i.e., 0.60. Moreover, the results of factor loading for all constructs range between 0.50-0.85, satisfying the minimum criteria of discriminant validity (Ahmed et al, 2017). Further, the values of the average variance extracted (AVE) are more than 0.50, thus, a condition of convergent validity is also satisfied (Fornell & Larcker, 1981).…”

“…We examined and validated the dimensions of Islamic hire purchase through standard factor loading using AMOS 21. In the confirmatory factor analysis, we incorporated 26 items to the best fix the sample data between observed and unobserved measures (Ahmed et al, 2017). The outcomes exhibited that overall measurement model was acceptable (ranging between 0.55-0.95), and the CFA analysis showed that factor loading for every item was greater than the value of 0.50 that substantiated the construct and convergent validities of the hypothesized model.…”

“…According to Ahmed et al (2016), probability sampling has its own limitation and it would not represent the targeted population because every individual does not use IHP financing. It is also evident that the large sample, which was collected from either purposive or random technique that has the same characteristics of normality pattern and follows the central limit theorem, enables us to proceed with the same parametric statistical approach (Ahmed et al, 2017).…”

“…Factor analysis technique has the capability to contract a large amount of sample data into a reduced form. The technique of factor analysis may help the researcher to examine the possessions of the variables (Ahmed et al, 2017). The undertaken study employed the principal component rotated matrix to authenticate the construct validity of items and factors.…”