Sustaining enterprise competitiveness – is human capital the answer?

Abstract

In today's volatile environment of business, competitive advantages of firms are temporary. Top managements do not, and cannot, have all the answers to increasingly complex and rapidly changing problem situations facing their firms. In such a context, people of an organization constitute its core resource for continuing competitiveness. This resource comprises people's individual and collective learning and knowledge, skills and expertise, creativity and innovation, competencies and capabilities i.e., people's continuous capacity for providing customer-valued outcomes. In terms of their continual enhancement of such a capacity, the people of an enterprise constitute an appreciating resource i.e., its human capital. This paper explicates an inclusive concept of human capital, and specifies its necessary and sufficient conditions. It further highlights the embededness of human capital within a dynamic multi-loop nexus of social capital, learning, and management of knowledge. Intellectual capital of a firm is an emergent from this nexus. The framework developed here also helps outline a set of propositions regarding the nature and process of human capital development.