The Governance of Human Capital-Intensive Firms

For the past 30 years, the organization and functioning of firms have considerably changed, especially with the growing importance of human capital. In parallel, the primacy of the shareholder governance model has maintained. The aim of this chapter is to review the main theoretical and empirical elements of this paradox and to propose a renewed model of firm governance that takes into account the intrinsic nature of critical human capital incorporated by key employees. The chapter shows that the inalienable residual rights of control inherent to specific human capital are inconsistent with traditional disciplinary models of corporate governance. They rather call for a model of regulation of economic power exercising based on work motivation. This original model that the author calls the “multi-resource model” aims to encourage, retain, and collectively enrich critical resources by using an original operational device based on complementary instruments of incentive and coordination.

HRM Practices in Human Capital-Intensive Firms

This chapter focuses on examining the human resource management (HRM) practices that are used in human capital-intensive firms (HCIFs). In the specialized literature on HCIFs, human resources (HR) are recognized as constituting an infinite value potential. Nevertheless, we know little in the literature about “how to manage” these HR in the specific context of HCIFs. First of all, in this chapter, a literature review provides a clarification of the HR's key concepts (human capital, competence, and talent) on the one hand and introduces the relevance to study HRM practices underlying human capital management on the other hand. Then, based on the case study of IBM Corporation, a synthesis of the wide variety of HRM practices is proposed into three processes: identifying, assessing and developing, and finally, motivating and retaining human capital. The IBM case is representative of the HCIFs insofar as the company puts its human capital at the heart of its overall strategy and, in order to do this, provides a sophisticated HRM policy and, in addition, has implemented formalized HRM practices. For IBM, the aim is to improve resource assets of its employees necessary to generate innovation, value, and performance.

Organizational Learning and Collective Human Capital Relationship With Firm Performance Among MNEs in the Northern Region of Malaysia

The main objective in this chapter is to understand the organizational learning challenges of multinational enterprises and their performance in Malaysia. At the same time, it also explores how organizational learning and collective human capital with competitive advantage as a mediating factor affect MNEs' performance in Malaysia through employee movement. This research concluded knowledge acquisition, knowledge distribution, and organizational memory is positively significant towards competitive advantage. Only knowledge acquisition and organizational memory are positively significant when competitive advantage mediates organizational learning towards firm performance. Collective human capital is positively significant towards competitive advantage as well as towards firm performance when competitive advantage mediates. Through this research it was found that MNEs in Malaysia are weak in knowledge interpretation and knowledge distribution due to employee movement in the northern region of Malaysia.

The Role of Human Resource Accounting in the Business Environment

In this chapter, human resources accounting is comprehensively analyzed. Human capital has been often neglected or inaccurately reported in the financial statements due to its nature. In the new economy, financial market participants such as investors, creditors, and shareholders would like to get information about the firm's investment in human capital. Over the last decades, some accounting methods have been developed for human capital. In this chapter, the methods used in the accounting treatment of human capital are analyzed, and a total of 288 operating reports of banks listed on Borsa Istanbul for the period between 2010 and 2017 are examined through content analysis. The results of content analysis indicate that there is a growing trend in human capital disclosure by banks listed on Borsa Istanbul between the period of 2010 and 2017, implying that banks listed on Borsa Istanbul have become more aware of the importance of human capital.

A Supply Chain Management View of Human Capital-Intensive Firms

Logistics and supply chain management (SCM) is benefiting from today's disruptive information technologies. Disruptive technologies based on massive data capabilities offer new opportunities for growth in international trade, through supply networks and real-time management. The authors aim to shed light on the impact of digitization and digitalization and disruptive technologies on human-capital-intensive firms (HCIFs), particularly in the logistics sector. Three case studies of control towers, business spheres, and supply chain cockpits seem to indicate that a new generation of high value-added human capital is entering the logistics sector in the context of massive data.

Knowledge Inflows and Knowledge Creation Capabilities Among MNC Subsidiaries in Malaysia

In a volatile business environment and a global landscape, knowledge creation capability plays an important role in ensuring that MNC subsidiaries stay competitive. In this respect, knowledge inflows from different parts of the MNC knowledge network are vital to a subsidiary's capability to create new knowledge. Briefly, knowledge creation capability refers to the successful implementation of creative ideas within an organization. However, innovation-based competitiveness always starts with creativity that is rooted in individual workers in an organization. The human capital of the organization, therefore, is considered to be one of the main sources of knowledge-based competitive advantage. Therefore, besides knowledge inflows from the MNC network, subsidiaries also need human capital to allow for knowledge flows to be utilized creatively in order to remain competitive.

How Are Innovation, Growth, and HCIF Affected by Natural Resources?

This chapter demystifies in detail the transmission mechanisms of how the natural resource industry (NRI) harms the growth and innovation in human capital-intensive firms (HCIF). Two important phenomena were studied qualitatively: rent seeking (RS) and Dutch disease (DD) which result from the abundance of natural resources (NR). RS pushes down the return of production and DD results in uncompetitive production. The empirical results for a cross-section of 81 countries show a significant evidence that with recent data, oil rent hinders human capital as a proxy for innovation. Meanwhile, the indicators of resource governance show a significant and positive impact on human capital accumulation. A growing amount of literature focuses on growth and human capital, while this chapter emphasizes HCIF and innovation, elaborating the transmission mechanisms of underperforming economic growth through the hindrance of innovation in the firms and awkwardness of HC.

Collaborating Without (Formal) Organization

This chapter focuses on independent workers and on the organizational specificities of the independent workers' phenomenon. The authors treat independent workers as an emergent and continually shifting organizational phenomenon questioning some of our assumptions about what organizations are and revealing trends that are currently reshaping work. They suggest viewing the independent workers' phenomenon as an open organizational phenomenon in which activities are project-oriented, temporality-oriented, and inclusive. This chapter contributes to an understanding of the independent workers' phenomenon as an organizational one that constantly (re)defines rules, roles, and statuses making the activities possible. It also contributes to a broader reflection on the matter of organization. Considered as an open organizational phenomenon, the independent workers' phenomenon calls the organization-society dualism into question. Finally, revealing the organizational aspects of independent workers' activities allows us to better understand some of the transformations that are nowadays affecting more traditional forms of work.

A Survey of the Literature on Human Capital-Intensive Firms

The aim of this chapter is to provide a survey of the academic research dedicated to human capital-intensive firms (HCIF) both at a theoretical and empirical level. The authors conduct a thematic inventory of the published works in this area to assess the dynamism of the field research and provide an exploratory analysis. They develop a bibliometric analysis based on the three widely used databases (Econlit, Science Direct, and Wiley) over the time period 1992-2018. From a cluster analysis, the chapter draws a portrait of HCIF based on the highlighted distinctive features. It also gets more information on the scope of existing research and the issues, limits, and prospects involved.