Effectiveness of Social Enterprise in Managing Intellectual Capital

Abstract

In order to successfully accomplish the social and business mission, social enterprises need to identify the appropriate elements of resources that affect their performance since the management of resources is important to ensure the effectiveness of social enterprise. Thus, this study aims to examine the role of intellectual capital, in terms of human capital, structural capital and relational capital on the effectiveness of social enterprise which is represented by the financial viability. Information on the financial viability and intellectual capital were obtained from the content analysis of the annual reports of 210 social enterprises registered under the Registry of Societies (ROS) in Malaysia for the financial period 2010. The results from the statistical analysis revealed that on average, most of the social enterprises in Malaysia would be able to financially sustain in the future. Based on the multivariate analysis, the results highlighted that human capital has a significant positive influence on the financial viability of social enterprise while structural capital and relational capital do not have significant positive relationship with the financial viability of social enterprise. Overall, the findings concluded that human capital was the most influential factor in enabling the effectiveness of social enterprise.