Relationship between innovation capability and intellectual capital towards firm performance in electrical and electronics manufacturing firm in Malaysia

In both manufacturing and service industry, innovation is very important because company forced deal of unpredictability and rivalry when to market new product. The condition cause firm have to put organizational success as objective and make an effort to innovate, competitive and able to adapt oneself ). Innovation in the industrial sector seems unpredictable and unmanaged. Related with it, that innovative products failed to be successfully introduced on the market. Another situation about 10,000 people in Malaysia have been retrenched as of July 2015, according to the Malaysian Employers\u27 Federation (Malaysian Insider, 2016). Related to this situation, Bontis (1998) stated that if an organization has poor systems and procedures by which to track its actions, the overall intellectual capital will not reach its fullest potential. In this paper, researcher want to examine the relationship between innovation capability and firm performance and also to examine the relationship between intellectual capital and firm performance. Using Partial Least Square (PLS) as tool to analyze the relationship with. No of respondents 287 among E & E manufacturing firm in Malaysia found that both relationships have T-Statistic value between innovation capability is 4.967 with firm performance and T-Statistic value between intellectual capital is 2.219 respectively. With standard beta for innovation capability is 0.273 and intellectual capital is 0.118 accordingly. It can conclude that both variables have positive relationship towards firm performance and the relationships are supported