Organizational Culture Effect on Association Between Intellectual Capital and Cost Characteristics

Purpose: In line with the knowledge-based economy development, their intellectual capitals play a vital role in achieving a sustainable competitive advantage. In the context of developing economy, cost management is taken into consideration as one of the most important strategies to attain financial success and organizational performance within the competitive market. Since intellectual capital and cost characteristics management are among the factors leading to improvement of financial performance indicators among companies, and considering the fact that these terms can function as improving the efficiency and effectiveness in assumed organizations along with perceiving that organizational culture is one of the fundamental fields of organizational change and transform, the present study was developed to examine the association between intellectual capital and cost characteristics with a focus on mediating effect of organizational culture among the companies listed in Tehran Stock Exchange and over the counter. Design/methodology/approach: To this end, the information pertinent to 168 companies for 8 years through 2010 to 2017 were used. Findings: To test the research hypotheses, the present study made use of multivariate regression method based on mixed data. The results indicated that there was a positive and significant relationship between intellectual capital and organizational culture as well as cost characteristics. In addition, it was concluded that there was a positive and significant relationship between organizational culture and cost characteristics. Ultimately, it was found that the effect of organizational culture (as the mediator variable) in the relationship between intellectual capital and cost characteristics was significant. Originality/value: Organizational culture models play a key role in increased managers’ awareness and organizational practitioners. It is necessary that organizational managers, particularly in developing countries pave the way for increased efficiency and organizational effectiveness through referring o mixed models and develop strategic studies with respect to the conformation of these models.


Introduction
Despite the fact that there are a variety of definitions regarding the term intellectual capital, there is also a consensus over the economic-oriented and knowledge-oriented approaches so that a considerable number of researchers have identified human capital, structural capital and client capital as the potential comments of the intellectual capital. The intellectual capital offers a number of advantages such as profit-making, improving the strategic position, increasing the market share, innovation and exclusive technology, developing the standard and recognizing the trademark, increasing organizational fame, reducing the expenses, increasing client loyalty and improving the productivity. One of the benefits of intellectual capital for the organization is the reduction of costs. The cost reduction is performed through the management of costs. Cost management involves the efficiency and optimal use of the organization resources in order to create the values, norms and social behaviors which have an impact on the behavior and attitudes of individuals within the organization. Generally speaking, culture is said to be supportive of knowledge management when it creates value for the knowledge and encourages it sharing, creation, and application. Thus, developing a comprehensive definition of organizational culture and knowledge management is a key step towards the development of intellectual capitals.
Edwinson considers the cultural and organizational values as the outcomes of firm's human capitals. The researchers believe that culture shapes various cultures and makes them related to one another. Affecting all dimensions of organization, organizational culture is of such a significance that the management scientists take into consideration the main task of leaders as change and assigning proper cultural values. In general, the organization culture has impacts on organizational improvement more than the environmental factors. Hajiha and Kharatzade(2015) in a study was carried out to compare the organizational culture and its dimensions among the companies which make use of the management accounting innovations and those who avoid using them. There was found to be a significant difference between the organizational culture of the companies which make use of the management accounting innovations and companies which refrain from using them. Therefore, one can state that organizational culture has an effect on the use of management accounting innovations such as the cost management, and one can draw the attention towards examining the association between the organizational culture and cost characteristics. In addition, considering the effect of intellectual capital and cost management on the financial performance of firms, one can investigate the effect of intellectual capital in cost characteristics. Also, since the culture is considered as the strategic touchstone for a successful company, one can explore the influence of intellectual capital on organizational culture, accordingly. Thus, the purpose of the present study is to examine the effect of intellectual capital on cost characteristics with respect to the role of organizational culture as the mediator variable.

Intellectual capital
Today, management of intellectual capital would lead the organizations towards higher levels of success across competitive markets. The first attempts dealing with the concepts of intellectual capital were achieved by the studies of Fritz Machlupin 1962; however, the invention of the intellectual capital term is attributed to Galbrais. In recent decades, companies (firms) have devoted their attention towards measuring the intellectual capital for offering reports for the beneficiary parties where they attempt to find out methods for assessing the local intangible assets and extracting the intangible values across organizations (Heydari,Qaderi and Kafami,2016) The intellectual capital offers a new comprehensive model for observing the real values of organizations through the use of which one can evaluate the future values of the company. Most of the experts consider the intellectual capital as involving client capital, human capital and structural capital. The intellectual capital can be defined as the set of all knowledge which is employed by the employees of companies, which also creates competitive advantage.
Putting into other words, the intellectual capital is defined as the intellect axis including the knowledge, information, assets and intellectual analysis through the use of which companies can benefit from the advantage towards the generation of wealth (Heydari et al ,2016)

Cost management
Rapid and astonishing development of technology along with the increased competition in global markets have encouraged the economic managers to produce high-quality products, offering optimal services to clients and reducing the final cost of products and services. Companies which have adopted the cost management strategy will be able to increase their market share through suggesting lower costs for production and sale. In general, cost management system emphasizes minimizing the production costs and excluding any activity without added economic value as well as progressing towards high-quality products (Khashei and khasti,2007). Cost management is based on the attitude that costs are not generated by themselves; rather, it is the all reducing costs or embarking on product services as well as management decisions that are based on the use of limited organizational resources. The attitude of cost management plays a vital role in shaping the managers' decisions towards creating value for all beneficiary parties (stakeholders, clients, employees, and society) and endeavors to offer a balanced and creative level among different beneficiary parties.

Organizational culture
Organizational culture s a term which has been newly developed in the field of management knowledge and organismal behaviors. Following the new theories and studies in the context of management, the organizational culture has captured the attention and is regarded as one of the concerns within the field of management (Tosi,1994). In fact, the organizational culture has been realized in the belief system of organization and is defined frequently by the language, symbols, traditional and customer which reflect the behavior derived from the belief system. Defections of organizational culture have to do with explaining the quality of behavior or people's thinking styles. In an attempt to achieve a useful and comprehensive definition, some of the researchers such as Gerioz, Walter ad Dabsen have considered the cultural performances while some others such as Bawer and Gonzalez have developed a brief definition in this regard. Thus, considering the importance of definitions offered concerning the term organizational culture, a number of definitions are demonstrated in this section. Shain (2003) related the organizational culture to an iceberg, the overall image of which is latent and a tiny part of it is observable. From Hafsted's (1986) point of view, organizational culture is a collective planning in within the mind. Mind planning is not the same as that of the computer. Considering the effect of intellectual capital and cost management on the financial performance of companies, one can examine the impact of intellectual capital on cost characteristics. Since culture is regarded as a strategic touchstone for a successful company, one can address the effect of intellectual capital on organizational culture.
Based on the results obtained from the research hypotheses, one can say there is a significant difference between the organizational culture of companies which make use of this innovation and those which refrain from using it. Generally speaking, one can argue that organizational culture has an effect on the application of management accounting innovation such as the cost management and one can examine the association between organizational culture and cost characteristics. Alame,Abomasodi,Sheikh(2016)have examined the intellectual capital effect on cultural capital, knowledge management actions and organizational performance among the employees working in Isfahan gas Company. In this study, the human and structural capital were found to have an effect on the organizational performance. In addition, this component had an effect on the organizational performance indirectly with the mediator variable role of cultural capital and KM actions.

Previous Researches
Siti Zahela Abdul Rasid, Che Ruhana Isa and Wan Ismail (2014) have examined the linkages between management accounting systems (MAS), enterprise risk management (ERM) and organizational performance by examining MAS information characteristics that match ERM implementation and joint effects of MAS and ERM on organizational performance. Fakhari and Mohamadi(2017) in a study was developed to addresses the effect of organizational culture on the quality of information disclosure. The results indicated that some of the organizational culture components (adaptation and missionary) had an effect on the disclosure of information among companies. However, no significant relationship was found between the organization culture based on the job involvement and adaptation to the disclosure quality as well as its expression. Such results ca be useful for implementing the method of response responsibility, leading to increased information disclosure clarity within the companies.Wahid ElKelish and Kamal Hassan (2014)showed in their study regarding the organizational culture ad disclosure of risk among large companies that hierarchical organizational culture had a positive and significant effect on the level of risk disclosure of United Arabic Emirates companies rich level. The researchers examine the organizational culture based on the cultural dimesons model of Mozhen and its association with employing management accounting innovations among the companies listed in Tehran Stock Exchanges. Considered management accounting innovations of this research included: activity-based costing, activity-based management, balanced evaluation, goalbased costing, standard costing, quality costing and Kaizen costing. The organizational culture dimensions were found to be supporting tendencies, innovation, rule-based tendencies and goalbased tendencies. Based on the findings, there was a significant difference between the Electronic copy available at: https://ssrn.com/abstract=3270420 companies which make use of the management accounting innovations and those which refrain from using them. Fakhari and Mohamadi(2017) concluded in their study that removing of added value, enhancement of fixed expenses in line with the incomes, reduction of non-fixed costs and improvement of main activities within the economic sectors are in correlation with the financial performance of institute. The results of the study Sanchez,Munoz,Miguel and Guzman (2007) manifested that organizational culture is considered as the main component within demonstrated models with respect to the evaluation of intellectual capital, and there is a strong relationship between culture and components of intellectual capital.

Research hypotheses
Hypothesis One: Intellectual capital has significant effect on organizational culture Hypothesis Two: Organizational culture has significant effect on cost characteristics.
Hypothesis Three: Intellectual capital has significant effect on cost characteristics.

Hypothesis Four:
Intellectual capital has significant effect on cost characteristics with considering the organizational culture.

Methodology
The required data were used based on the survey design and obtained from the information center of Stock Exchanges as well as financial reports of the companies listed in Stock Exchanges and over the counter companies' center. Also, the data were gathered from the Board of Directors of companies listed in Tehran Stock Exchanges ad over the counter companies.
Later, the data were analyzed after being ordered by the considered software and the statistical analysis. The sampling method is based the systematic removing method. therefore, the chosen to the production costs (overhead cost/production cost); the modules dealing with the percent of changes in production cost to the cost of sale goods (production cost/ cost of sale goods); and the modulus of the percent of changes in quality costs of the production cost (quality cost/ production cost) where he product costs, as well as the quality costs, are obtained from the financial statements and descriptive notations of the financial statements. The quality cost includes the rework cost, waste costs, machinery deficiency costs, after sale costs, guarantee costs, return from sale costs, off costs, and investigation as well as test costs, each of which is obtained from the financial statements and descriptive notations. The mean of each obtained changes percent is estimated for each company.

Mediator variable:Organizational culture (OC): to examine the organizational culture,
Parson's AGIL model was used which included the initial actions in the field of developing a Electronic copy available at: https://ssrn.com/abstract=3270420 framework for understanding the values within the cultural systems, involving the organizational culture systems. Parson's model helps to assign the takes for each social system in order to survive. These tasks are as follows; adaptation: the ability to be adapted to the environment; goal development: having processes and reaching goals; integrity: integrating the components of The control variables are as follows: financial leverage (FL): the financial leverage is defined as the ratio of sum of debts to the total asset; company size (size): company size is calculated through the logarithm of company's market value; loss rate: in case the company experiences the pure loss in one year, we enter number 1; otherwise, we enter number zero.

Descriptive statistics
Descriptive statistics of the research variables are presented in the following table.

Research hypotheses Results
Hypothesis 1: intellectual capital has an effect on organizational culture  Hypothesis 2: intellectual capital has an effect on cost characteristics with coefficients of 0.0005 and 0.0063, respectively. Also, company size has a negative and insignificant effect (with -0.0076 coefficient) on cost characteristics. is positive and significant. Financial leverage and company size with 0.0054 and 0.0025 coefficients have a positive but insignificant effect on cost characteristics.

Conclusion and suggestions
The results show that intellectual capital has a positive and significant effect on organizational culture. This indicates that in case of intellectual capital change, organizational culture will change positively, accordingly. The results of this hypothesis are in line with the ones reported (Faghfori,Porrashidi and Salajge (2014)  Electronic copy available at: https://ssrn.com/abstract=3270420 client loyalty and improvement of productivity. Based on eh results obtained from the present study, following suggestions are presented or future studies. The set of organizational culture models play a key role in increased managers' awareness and organizational practitioners. It is necessary that organizational managers, particularly in developing countries pave the way for increased efficiency and organizational effectiveness through referring o mixed models and develop strategic studies with respect to the conformation of these models. Considering the role of intellectual capital in the success of companies and its contribution to the increased productivity and organizational fame as well as strategic position of companies, it is recommended that companies realize their information truly and give considerable attention towards the affective factors of stablishing intellectual capital. Also, it is suggested that the supervisory departments pave the way for more information disclosure of intellectual capital through assigning some guidelines, and embarking on encouraging polices. Base on the results of the hypothesis testing, higher levels of information disclosure in a company results in increased organizational culture level in an organization. organizational culture would thus have an influence on cost characteristics so as to increase the profit-making, strategic position and reduce the costs. It is essential that companies draw more attention toward intellectual capital and its disclosure in their organizations, leading to profit-making, improvement of strategic positions, increased market share, innovation and exclusive technology as well as recognition of commercial trademarks, increased organizational fame, reduction of costs, increased client loyalty and improvement of productivity. Following this, the management section will make use of organizational resource expenses in an efficient and effective way in line with creating values for the clients where the profit-making and enterprise development are achieved through creating value. Clients are the basis for bringing wealth to the enterprises and organizations and it is the clients who show satisfaction and loyalty.