The strategic importance of intellectual capital in the non‐profit sector

Abstract

Abstract Purpose – This paper aims to examine five key strategic management concepts: industrial organisation (I/O), resource‐based view (RBV), knowledge‐based view (KBV), balanced scorecard (BSC) and intellectual capital (IC) within the non‐profit context and to determine which is most applicable in the non‐profit sector. Design/methodology/approach – This paper reviews the above concepts in the light of the unique non‐profit environment. Findings – The IC concept is more effective compared with other strategic management concepts within the non‐profit context. IC is an important resource that non‐profit organisations need to develop in order to gain sustained strategic advantage. Research limitations/implications – This paper helps to build a nascent body of literature suggesting that the concept of IC is the most effective strategic management concept in NPOs. The increased awareness of the IC concept in the sector, as a result of this paper, is likely to generate further research from both non‐profit practitioners and scholars. Originality/value – Very little systematic research has reviewed the applicability of strategic management concepts within the non‐profit context. The paper acts as the first attempt to fill this gap.