literaturereview of retail bank.docVIP

2. Literature Review 2.1. Exploration unique combination of resources According to Meritum model (2001), human, structural and relational capital is three major elements of the intellectual capital, and is also known as the knowledge of the retail banking. Technology has become the major expenditure area, and developed the capacity to react quickly for the retail bank. (McGanghey, 1999, p. 7) Therefore, Nerdrum and Erikson (2001) suggest that organisation’s combined capability to employ their more or less unique resources, their intangible and tangible assets can create value to the company. In other words, combination of these resources can effectively improve the performance of the retail bank. 2.1.1 Human capital Human capital is the knowledge owned by the individuals, which includes the competencies, skills, experience and ability of people. () This means the quality of both management and employee is an essential element in human capital, as it will reflect to the company’s decision making and general day-to-day operation; therefore affect the organisational performance. For example, Bank of Ireland management team made deals on sale and leaseback 36 of its branch buildings in October 2006, which raised 240 million for the bank. (www.thepost.ie) This 240 million provides the extra fund available for the bank to increase its lending ability without taking more deposits, and also solved financing issues. In the meantime, there is no interest payment required on these funds. The cost of financing is obviously lower than raising the same amount of money from taking various small deposits. Therefore, as suggested by Losey (1999) retail bank needs to seek human capital development through structured crew development programme, classroom courses, e- learning, and work place learning and employee competencies improvement to allow the better performance under various business needs. On the other hand, people are the carriers of organisational knowledge and dri