The Impact of Service Quality as a Mediator Variable on the Relationship between Intellectual Capital and Organizational Performance (An Applied Research on the Egyptian Mobile Telecommunications Companies)

Abstract

Achieving and sustaining superior organizational performance, especially in a rapidly changing and severely competing mobile telecommunications setting, has become an urgent necessity. The determinants of superior organizational performance underlying intellectual capital and service quality in the mobile telecommunications market are still unclear. The aim of this research is to develop a conceptual model that describes the impact of intellectual capital (IC) on organizational performance (OP) via the improvement of service quality (SQ) in the Egyptian mobile telecommunications companies. Data were collected using a questionnaire survey approach from 384 top, middle and supervisory managers of the three Egyptian mobile telecommunications companies (A, B and C) (given names). The data were analyzed and the hypotheses were tested by using regression analysis. Structural equation modeling was used to validate the measurement model and to test the mediating effect. The results of the empirical study showed that the Egyptian mobile telecommunications companies got high evaluations of IC, SQ and OP. “Structural capital” got the highest evaluation among IC dimensions, followed by “relational capital” and finally “human capital”. “Tangibles” got the highest evaluation among SQ dimensions, followed by “convenience”, “reliability”, “empathy”, “assurance”, “responsiveness” and finally “network aspect”. On the other hand, “customer performance” got the highest evaluation among OP dimensions, followed by “learning and growth performance”, then “business process performance” and finally “financial performance”. The results showed that IC has a strong positive effect on OP and SQ and structural capital was found the only IC dimension affecting OP; while structural and relational capitals were found affecting SQ. Also, the results demonstrated that SQ has a strong positive effect on OP with all SQ dimensions except ‘empathy’ found affecting OP. Finally, the results revealed that SQ fully mediates the relationship between IC and OP. This could be one of the contributions to knowledge and industry for this is the first research to analyze the impact of SQ as a mediator variable on the relationship between IC and OP. It also provides some theoretical contributions to the knowledge of measuring and managing the research variables and their interrelations. The research concluded that for organization to have a superior and sustainable performance, managers must best utilize the IC to enhance and improve their SQ.