Intellectual Capital Management Practices: The Case of Malaysian Private Hospitals

Intellectual capital has emerged as an indispensable element for enhanced productivity and sustained victory of organizations in this knowledge-based economy. In the healthcare industry, intellectual capital forms the basis for continuing innovation and subsequent performance. Hence, the management of hospitals needs a sound intellectual capital management in order to ensure their sustainability in a long run. Moreover, the activities of hospitals are generally depend more on intangible resources such as clinical skills, knowledge, expertise, experiences, competencies, doctor-patient relation, doctors' and hospital's reputation rather than physical resources like physical assets. For this study, Malaysian private hospitals were selected to investigate how hospitals are extracting the value of their intangible capital in order to sustain and be competitive. This study aims at providing empirical evidence on the intellectual capital management practices in Malaysian private hospitals. Data was collected from a series of interviews of five private hospitals in Malaysia. Cross-case study analysis was carried out in analysing the data collected to develop patterns found in the evidence. The study reveals that the intellectual capital management in hospital industry is quite unique especially in the human capital management and the relational capital management. For human capital management, clinical staffs' competencies are crucial. Interestingly, physicians are often do not direct employees of the hospitals. This leads to a unique relationship between the hospital and the physicians. Meanwhile for the relational capital management, this study also reveals that there is a unique relationship between the physicians and patients. This relationship will lead to the structural capital of the hospitals. It carries the hospitals' reputations and good names.