Investigating the role of intellectual capital on the market orientation of private insurance companies

Dissertation for Master's Degree

Abstract

The purpose of this research is to investigate the effects of intellectual capital dimensions on increasing the market orientation of private insurance companies in Isfahan province. The method of conducting the present research was descriptive-correlation, and hypothesis testing was done with correlation method and SPSS version 19 software.  The scope of this research is the private insurance companies and agencies of Isfahan province during the spring and summer of 2012, and according to the size of the population of 600 people, 255 subjects were selected by stratified random method to perform statistical analysis. The validity and reliability of the intellectual capital evaluation questionnaire, which was created by Bontis, and the market orientation questionnaire, which was presented by Naror and Slater, were both confirmed.

The results of the research were presented in two sections of descriptive and inferential statistics, in the descriptive statistics section, the members of the statistical sample were mentioned in detail according to age, gender, education level, service history, and type of company, and in the inferential statistics section, the research results were presented using the Spearman correlation coefficient test. showed that there is a direct relationship between different dimensions of intellectual capital and the market orientation of insurance companies, and Friedman's variance analysis tests showed that the customer dimension of intellectual capital has a higher average than other dimensions of intellectual capital. And finally, based on the results of the aforementioned statistical tests, suggestions were made to the private insurance companies of Isfahan province and other similar organizations.

Key words: intellectual capital, market orientation, human dimension, customer dimension, structural dimension

Chapter 1

General

1-1 - Introduction:

In today's world, where the business environment is more competitive and unpredictable than in the past, companies need to survive and achieving business goals are forced to use superior approaches and develop their competencies and capabilities in the face of uncertainty. Market orientation, which is an operational approach to the marketing point of view in the company's operations and activities. In the last 2 decades, it has been widely welcomed among marketing researchers and thinkers, marketing thinkers and company managers, and in different researches, its relationship with intellectual and human capital has been examined with the presence or absence of mediating variables. But based on a non-academic definition; A market-oriented company is a company that organizes its activities and services according to the needs and requirements of its customers. In contrast to such companies, a product-oriented company produces interesting and exciting products and seeks to stimulate the interest and attention of the supply and demand cycle for these products and services.  Although, there is a possibility of success in each of these two trends, but with product orientation being the only success in each of these two trends, this product orientation being the only success becomes more difficult. On the other hand, today's intellectual capital (IC) [1]. It is considered a key factor in market orientation and profitability of companies. Two important factors that have increased the performance of market oriented companies in the past two decades; Globalization and increasing changes in technology. In such an environment, intellectual capital and intangible assets are important success factors. In the new economic competition, knowledge-based assets provide an inherent competitive advantage. The present research tries to introduce the dimensions of market orientation and intellectual capital to examine their relationship among private insurance companies.    

The progress and development of insurance is symmetrical with the economic development of countries. Improving the economic situation, increasing exchanges, improving the level of living standards is effective for the economic progress and development of countries, and if the economy of a country does not rely on insurance and the provision resulting from it, it will definitely be exposed to the threat of countless risks. Commercial activities and effective assistance in the relative distribution of costs are known. In today's world, insurance has reached such a position that it can play a key role in social and economic development by creating confidence in the economic activities of countries, (General Relations of the Central Insurance Organization of Iran 2017).

Insurance industry in Iran with more than seventy years of service has gradually been able to expand the scope of its presence and activity in different regions of the country and in different economic sectors.Every year, the number of insurers increases, and every day many insurers or injured parties refer to the centers and branches of insurance companies to receive damages (public relations of the Central Insurance Organization of Iran 2017).  Some of them leave insurance companies with satisfaction and some with dissatisfaction. Failure to pay attention to intellectual capital and, as a result, failure to use the merits of force and intellectual capital, can lead to friction and slowness in the development of the industry, and on the other hand, stepping into the competitive and market-oriented conditions of the organization requires the use of intellectual capital (Srivihok, 2008). challenged and reveals the need for empirical investigation of these concepts. Therefore, we are going to empirically examine the role of intellectual capital on market orientation in private insurance companies of Isfahan province that have consistent approaches to product, price, distribution and promotion. Considering its cultural importance among the high level employees of the company who play a key role in the design and production of products, and then we examine the relationship between different levels of market orientation in the company on the other hand. By doing this, it is possible to use the results of this research along with other research conducted in developing countries and developed countries. 3-1- Importance and necessity of research: By knowing the nature, components, models and measurement methods of measuring and valuing intellectual capital, the possibility of planning and optimization, control and continuous monitoring of it in companies is provided. With the concept of the value of intellectual capital, it can be claimed that a huge part of the difference between the market value and the book value of companies and the extent of their market orientation and success in the market sector will be explained by the value of their intellectual capital. One of the most valuable industries of every society is the insurance industry, which somehow causes the increasing social and economic development of the society (Tayles, Pike and Sofian, 2007).  Today, all development-oriented societies consider insurance as an important factor in the development of the country because they believe that insurance plays a prominent role in the growth of various economic sectors, and by covering the losses caused by the economic and development activities of the society, it also increases investment incentives. Therefore, it seems that it is important to examine the factors that can somehow affect the level of market orientation of insurance companies.

Given that the technology used in the service sector for final customers is not at such a high level, one of the solutions for Iran's entry into the global markets is to rely and focus on this sector and develop marketing skills and capabilities and human resources needed in this industry. After joining the World Trade Organization, parts of the national economy can compete and respond to market pressures. The insurance industry is one of the major global service industries that has not yet found its real place in Iran, therefore, in this research, by examining the relationship between market orientation and intellectual capital, in fact, we highlight the direction of targeted and market-oriented movements (Woodruff, 1997). The need to pay attention to capacity building in the national economy as the fuel of the driving wheel of development has become more apparent. One of the prerequisites for the development and reduction of risk related to investment and business environment is the use of related insurance services. In this passage, examining the relationship between market orientation (relying on the concept of attention to the customer, attention to competitors, and inter-sector coordination) and intellectual capital can be a beacon for insurance companies to become more market-oriented and, as a result, obtain more acceptable functions and ultimately more longevity and development of their services. By identifying the importance of intellectual capital, it is possible to introduce scientific and executive officials and decision-makers to the effective and vital issue of intellectual capital (human, structural, relational, technical, etc.) and its role in increasing the degree of market orientation of the organization and providing more services to the people, and use it more. There is a significant relationship between the private insurance companies of Isfahan province.