International Journal of Business and Social Science Vol. 5 No. 2; February 2014 160 The Effect of Intellectual Capital Management on Organizational Competitive Advantage in Egyptian Hospitals Dr. Eman Salman Taie, PhD. Assistant Professor of Nursing Administration Head of Nursing Administration Department Faculty of Nursing Helwan University- Egypt Abstract Aim-To test the effect of intellectual capital management on organizational competitive advantage in Egyptian hospitals. Method- This study is a cross-sectional analytical study. The study was conducted in two hospitals (El-Nozha International Hospital and El-Demerdash Hospital). Study subjects consisted of three levels of management either nurses or physicians. (36) from El Nozha and (70) from El-Demerdash hospital. Results– Structural capital and competitive advantage variables of the study were high and very high means. Also, human capital high significantly and positively correlated with competitive advantage (r = 0.79, p<.01), while it was (r = 0.73, p< .01) in structural capital and (r = 0.88, p< .01) in relational capital. Conclusion- There was strong positive and high significantly (r = 0.79, p<.01), (r = 0.73, p< .01) and (r = 0.88, p< .01) correlation between human capital, structural capital and relational capital respectively with competitive advantage. Keywords: human capital, structure capital, relational capital, intellectual capital, competitive advantages 1. Introduction In the past years, intellectual capital IC and its measurement was a subject of the researches only in developed countries, however, nowadays it is a subject of interest in all over the world (Ahagarzadeh, 2010). In today business environment with characteristics like globalization, competition and high rate of changes in technology, tangible assets such as capital, land and raw martial do not create competitive advantage for organizations and they must set intangible assets as a base for sustainable competitive advantage (Shafiezadeh, 2007). Therefore, it is necessary that key resources, performance incentives and competition in organizations to be determined by managers because increasing knowledge and application of intangible assets help companies to be efficient, profitable and creative (Namazi and Abrahimi, 2007). Intellectual capital (IC) is a key driver of innovation and competitive advantage in today’s knowledge based economy (Bontis 2004; Yu-Shan Chen 2007). Many organizations have realized the important fact that their real value is not reflected in their materialistic capital, but in their intellectual capital. Intellectual capital included human capital, structural capital and relationship capital. Human capital refers to idea capital (the manpower, employee abilities and attitude of the knowledge base) and leadership capital (the characteristics of experts and managers); structural capital refers to innovation capital (patents, trademarks, copyrights, knowledge database) and procedure capital (working procedures, trade secrets); relationship capital refers to customer relations, supplier relationships, and the relationship of network membership (Mahmood , Baratali & Somayeh 2012). The current debate on intellectual capital management is set in the context of a changing model of management and organization structures. It is said that organizations are moving from command and control to delegation, empowerment and coaching. Through this, everyone in the organization has an opportunity to shape the way it works. It is the role of management to harness and maximize that potential. It’s clear that managers who want to grow their organization’s intellectual capital must be able to expand intelligence, encourage innovation and exercise integrity (Antonio et al. 2008; Ahangar 2011).