Integrating knowledge management with intellectual capital to drive strategy: a focus on Italian SMEs

This study aims to provide empirical evidence on the linkage between knowledge management, intellectual capital and planning effectiveness in Italian SMEs. Survey data from 172 Italian SMEs was collected through an online questionnaire and analysed using structural equation modelling (PLS). Results show that KM practices have a positive direct impact on each IC component which influences planning effectiveness. Finally, structural capital and planning effectiveness have a positive direct impact a firm’s ability to innovate. For researchers, this paper fills an important gap in the academic literature by conceptualizing and empirically testing the link between intellectual capital and planning effectiveness. The main practical implication of this study is that developing intangible resources is of particular importance for strategic decision-making in SMEs. The focus on Italian SMEs limits the generalizability of results. This study provides empirical evidence on how KM and IC interact and mutually drive planning effectiveness. Second, results shed light on the importance of intellectual capital to enhance a firm’s planning effectiveness. Finally, the focus on SMEs enriches the extant literature on the field confirming the vital role of knowledge management and intellectual capital in managerial decision-making.