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PROJECT TOPIC: EFFECT OF INTELLECTUAL CAPITAL ON THE PERFORMANCE OF NIGERIA BANKS

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

With the gradual shift of global business world into the knowledge economy, it is becoming increasingly important and obvious to business organisations that to survive in business in this complex and dynamic world, adequate attention must be paid to the intellectual capital base of the firm. Gone are the days when firms focus only on their physical capital with little or no attention to their intellectual capitals and still post huge profits.

Competition in business today has become so intense that managers utilize every resource at their disposal to edge others out of business. Intellectual capital has also become an important business resource that organisations can leverage on to gain competitive advantage. Bornemann et al. (1999) discover that enterprises, which have managed their intellectual capital better, had achieved stronger competitive advantage than the other enterprises. Iswati and Anshori (2007) opine that human being has become the central attention in the twentieth century hence intellectual capital research now is not only paramount but also timely. Furthermore, according to OECD (2001) human capital, which is an integral part of intellectual capital, has been recognized as one of the key determinants of growth  in any business enterprise.

 

According to Bornemann et al. (1999) companies which  strengthen their own intellectual capital management as compared to  others  performs better. Intellectual capital is one of the main factors related to the performance and long-term profitability of knowledge-based economy (Huu and Fang, 2008).


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