Abstract:
The main aim of the study was to determine the moderating effect of intellectual capital on
the relationship between ERM risk structure practices and organizational performance of
state corporations in Kenya. This study was guided by dynamic capabilities theory which
attempts to explain the perspective of how intellectual capital and ERM practices affect
organizational performance.
Design/methodology/approach:
The study used explanatory cross sectional survey design. Primary data on ERM risk
structure practices, intellectual capital and organizational performance was collected from
structured questionnaires. A survey was carried out on 218 state corporations in Kenya. The
research hypothesis was tested using hierarchical regression analysis.
Finding:
The study found that intellectual capital had an enhancing and significant moderation effect
on the relationship between ERM structure practice and organizational performance (β
=.314, ρ< .05).
Originality/value:
This study contributes to theory by centering intellectual capital on the empirical testing of
theory as well as the influence of intellectual assets on the relationship between enterprise
risk management practices and organizational performance. In addition, the study supports
the theory of Enterprise Risk Management (ERM) that emphasizes on holistic and
company-wide approach of managing risks. The study further suggests that future research
could build on this study by examining enterprise risk management practices in different
sectors and industries using both financial and non-financial measures of performance.
