Human capital flows in failing organizations: an integrated conceptual framework

Abstract

Purpose The purpose of this paper is to examine the dynamics of human capital accumulation and human capital depletion in the processes leading to business failure. Design/methodology/approach Building on the human capital theory, strategic human resource and business failure literature, this paper develops a conceptual framework which links the inward and outward dimensions of human capital flows in the business failure process. Findings The analysis sheds light on why some highly skilled individuals may opt to flee declining firms to avoid being stigmatised whilst others become motivated to joint such firms. Research limitations/implications The paper suggests that understanding the nature and dynamics of both flows are essential when seeking to avert collapse. Originality/value In spite of a growing body of research on business failure and intense competition for top talent, much of the existing literature has circumvented the relationship between them. This study develops a unified model towards enhancing our understanding of the human capital flows.