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Human capital, social capital and organizational performance

J. Augusto Felício (Management Department, ISEG – School of Economics and Management, Technical University of Lisbon, Lisbon, Portugal)
Eduardo Couto (Management Department, ISEG – School of Economics and Management, Technical University of Lisbon, Lisbon, Portugal)
Jorge Caiado (CEMAPRE, Centre for Applied Mathematics and Economics, ISEG – School of Economics and Management, Technical University of Lisbon, Lisbon, Portugal)

Management Decision

ISSN: 0025-1747

Article publication date: 11 March 2014

Abstract

Purpose

The aim of this paper is to evaluate the human capital and social capital of managers and the influence of these attributes on the performance of small and medium-sized Portuguese companies.

Design/methodology/approach

The structural modeling approach was applied to a sample of 199 small and medium-sized companies aged between 3 and 15 years, from five different sectors of activity.

Findings

It was found that human capital affects social capital, and that experience and cognitive ability influence personal relations and complicity. Organizational performance is strongly influenced by human capital through the cognitive ability of the manager.

Practical implications

Based on these findings managers can gain a better knowledge about how to improve the performance of their firms, for example through adjustments in communication methods or strategic decision capacities.

Originality/value

This work is innovative in the sense that it confirms the influence of human capital on social capital, and shows that it is cognitive ability that affects organizational performance.

Keywords

Citation

Augusto Felício, J., Couto, E. and Caiado, J. (2014), "Human capital, social capital and organizational performance", Management Decision, Vol. 52 No. 2, pp. 350-364. https://doi.org/10.1108/MD-04-2013-0260

Publisher

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Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited