Human Capital and Assets in the Networked World

Cover of Human Capital and Assets in the Networked World


Table of contents

(13 chapters)


Pages i-xliii
Content available

Part A Conceptual Introduction-Epistemologies


In the 1990s, von Krogh, Roos, and Slocum (1994) and Venzin, von Krogh, and Roos (1998) began discussions centered around epistemology and knowledge management, focusing mainly on the varied sources and backgrounds for knowledge management. Since 2000, we have seen a much wider debate on several issues that are related to the development of a knowledge economy. The main task became the establishing of a conceptual framework for further discussion of epistemological categories, using three keywords: cognitivism, connectionism, and autopoiesis. One objective of this book is to analyze the progression to a more knowledge-based economy by linking these keyword perspectives together, and the intention of this chapter is to present a fundament for these epistemological discussions.

Part B Human Capital and Assets Praxis Discussions

1. Management Perspective


Knowledge transfer considers the company as a dynamic system dealing with different kinds of knowledge. As production becomes more knowledge-based, this increases the potential for capturing and taking advantage of knowledge. On the other side, these factors become more complex and difficulties increase for the effective transfer of knowledge across organizational boundaries.

Research on knowledge transfer has experienced substantial growth in the past 30 years and research on knowledge transfer is still increasing (Kumar & Ganesh, 2009). The literature argues quite unanimously that there is a positive link between knowledge sharing and competitive advantage. This is analyzed in several studies, but according to Dyer and Hatch (2006), this assumption has not been generally proven. In this chapter, we discuss the points of view from different contributions on this subject. In the empirical part of this chapter, we propose the idea that knowledge transfer is a way for organizations to be more competitive and implement changes essential to their survival. This is done by looking at five firms in the meat producing industry in different countries.

2. Technology Perspective


Information overload is a norm in the era of big data. The threats and opportunities presented to organizations, institutions, and individuals have only increased in their volume and velocity. This chapter looks at how an individual’s scanning of environmental and external information is affected by bias. The term subscriber or subscription bias is introduced. Tools for increasing the speed of processing large new data relationships through visualization are evaluated. Additionally, the role and benefit of Cognitive Analytics in presenting fresh insight, as well as its role in mitigating publication and other biases, is reviewed. Last, some of the networked world tools and web services available to researchers and practitioners are considered in terms of how these emerging offerings can enhance productivity and their human capital with reusability of data and reproducibility of results.

Part C Level of Analysis Discussions

1. Intra-Organizational Systems-Networks Perspective


As they say, “Change is the only constant.” Thriving and surviving during a period of extraordinary collision of technological advances, globalization, and climate change can be daunting. At any given point in one’s life, a transition can be interpreted in terms of the magnitude of change (how big or small) and the individual’s ontological experience of change (whether it disrupts an equilibrium or adapts an emergent way of life). These four quadrants represent different ways to live in a highly dynamic and complex world. We share the resulting four-quadrant framework from a quantitative and a mixed methods study to examine responses to various ways we respond to transitions. Contingent upon these two dimensions, one can use a four-quadrant framework to mobilize resources to design a response and hypothesize a desired outcome. Individuals may find themselves at various junctions of these quadrants over a lifespan. These four quadrants provide “requisite variety” to navigate individual ontology as they move into and out of fluid spaces we often call instability during a time of transition. In this chapter, we identified social, cognitive, psychological, and behavioral factors that contribute to thriving transition experiences, embracing dynamic stability. Two new constructs were developed, the first measures the receptivity to change, Transformation Quotient (TQ) and second measures the range of responses to transitions from surviving to thriving, Thriving Transitional Experiences (TTE). We hope our work will pave the way for Thriving to become a “normal” outcome of experiencing change by transforming the lexicon and expectation of engaging with transitions.


Tacit knowledge is gaining importance in the productive capability of many modern firms, yet the conditions under which the ability to share this form of knowledge between individuals or teams are yet to be resolved. Tacit knowledge is embedded in individuals, but is often most productive when combined with other forms of capital assets into firms. Transaction cost economics has been a useful tool in explaining the boundary of the firm, as well as the formation of teams within firms. The extent to which intra-firm teams compete or co-operate is analyzed by examining the network effects between teams in situations where tacit knowledge exists. We examine the costs and benefits that can be expected from “learning” in a multi-team firm and conduct a simulation to demonstrate the effects. Two scenarios are considered: one when there is almost no specialization between teams, and the second when specialization is extreme. We are able to demonstrate that only in cases of very large differences in tacit knowledge between teams is the transfer of such knowledge profitable. Thus the existence of separate silos within firms (i.e., non-networked teams) should not be condemned out of hand.

2. Inter-Organizational Systems-Networks Perspective


This chapter highlights a study showing that knowledge sharing and envisioning processes can have positive effects on human and social capital growth within a network. The chapter begins by arguing that a responsible development perspective can be more proactive approach than a sustainability perspective. Some actors (non-profit, public, and private) have achieved responsible development goals by integrating values, purposes, and visions. More specifically, we conducted a study testing a methodology that can guide a process of building a strategic vision within a network with the goal of improving their responsible development orientation. The chosen methodology is “Participatory Action Research.” The implementation of the envisioning process was studied via quantitative/qualitative research tools. The methodology was tested in an official cross-country project funded by the European Commission. The project was selected as a best practice by the same European Union Commission. The study highlights the importance of envisioning processes in building social and human capital at the inter-organizational level and, in particular, in highly complex sectors such as those oriented toward improving social responsibility. In fact, work on the envisioning process itself represents an essential instrument for developing strategic objectives to be shared among actors within networks that intend to promote responsible development and improve their human and social capital. This bottom-up process of envisioning can also facilitate cultural interaction among community members, even in a cross-country context. This relevant “learning-by-interacting” experience can create a growth process for the human and social capital of entire communities. The creation of social capital also promotes the development of shared knowledge and advances, leading to the general understanding of common core objectives and appropriate ways of acting within the social system. The chapter ends with recommendations for future research.


In the last decades, many of the most talented and promising young graduates in the developed economies have joined the financial industry. Simultaneously, ill-designed incentives’ schemes have favored the development of a culture in which excessive greed, free-riders’ behavior, unreasonable appetite for risk, and short-term decision making have endangered the economy and, potentially, have laid the foundations for financial, economic, social, and environmental crises.

In this chapter, we review current challenges in the financial industry from the lens of human and social capital. We examine some of the factors that allowed unethical behavior and a short-term financial focus in the financial sector, examining how compensation and an extremely competitive culture became key elements that favored greedy and manipulative behavior and ultimately generated socially harmful human and social capital in the financial sector. Finally, we discuss the emergence of a number of game-changers (namely, Brexit, FinTech, the growing relevance of ethical standards, and the increasing participation of women and millennials in the industry) that might represent potential promotors of change and help restructure and reshape the financial industry.


The Canadian healthcare system is recognized as one of the best health systems in the world. However, recent social and economic conditions have placed significant pressure on system administrators to demonstrate value-for-money for the investments made with an increased scrutiny on service delivery and cost structures. Challenges in providing more efficient healthcare often resonate two key constraints: the shortage of overall funding and barriers to accessing appropriate service providers in a timely fashion. The most common solution is simply to increase service provider manpower and invest further financial resources.

In Ontario, Canada’s largest province, The Shoulder Centre (TSC) has introduced a transformative solution to address system constraints through the development of an innovative and comprehensive model of care which builds on (1) novel partnerships between community providers and the Centre’s clinical team, (2) A Patient-Centered Specialty Practice (PCSP) and (3) Leveraging technology solutions.

TSC’s model of care suggests that many challenges in healthcare are attributed to the inappropriate management of human capital and the under-development of social capital. As a solution, TSC has transformed the organizational structure of its health services by converting service providers into partners with shared accountabilities, resulting in economic value through human capital optimization and improved system efficiencies through the building of social capital. TSC’s performance results demonstrate measured system savings, increased patient and provider satisfaction, targeted knowledge growth and confirms that the healthcare system contains a greater than expected abundance of human and financial resources to provide access to appropriate and timely care without any further system investment.

Part D Cross-Disciplinary Discussions


Much like “Yeti,” the Abominable Snowman whose footprints are everywhere but itself nowhere to be seen, unfounded assertions of human capital as valuable contributors to strategic success continue to proliferate. Many of these treatments are nonbinding, nonmeasureable, idiosyncratic, tautological, and therefore nearly impossible to use for any comparative market valuation. In this chapter, we selectively review the interdisciplinary literature on exemplars of human-derived capital. We systematically examine specific epistemological strengths, weaknesses, and gaps in recognized theories, measures, and practices. In particular, a multidisciplinary, multilevel, connectionist point of view is suggested. We present the case for an evidence-based classification system of human-derived capital at the micro-, meso-, and macro-levels. Our framework goes beyond static stock models by emphasizing dynamic human-derived capital flows, as well as their within-level and cross-level linkages, all within the context of a modern society that increasingly is networked, fluent with technology, and prodigious with social media.


The distinction between discussing human capital (HC) and its actual measurement is the presence of indices and equations to substantiate the belief of measuring intangibles. The chapter makes a concise mention of research precedents, deriving leads for the foundation of HC. The chapter aims to provide clarity on the concept of HC measurement and bring to light the tools that can confer tangibility to intangibles. It argues that the measurement of HC is an achievable idea; furthering that a systematic review into the inter-disciplinary studies can offer viable solutions to the challenge of measuring intangibles. The chapter while discussing the contention makes a vivid mention of Bhutan’s gross national happiness (GNH), Happiness Seismograph, Cobb–Douglas model and others to make an impression on the minds of the reader.


The literature documents a shortage in the supply of external funding to small- and medium-sized enterprises (SMEs) in general and to innovative SMEs in particular. This study separates cognitive from financial constraints on innovative SMEs’ growth opportunities. Using data gathered through in-depth interviews with the CEOs of 115 SMEs, we reveal that over and above a problem with supply, there exists a twofold problem on the demand side. Specifically, we document that there is a tendency for these companies to avoid approaching external funding sources, especially ones that gear their investments toward innovation. Our results reveal a cognitive bias (over-pessimism) affecting the entrepreneurs’ (lack of) demand for external financing over and above other firm-specific factors. CEO tenure — our proxy for human and social capital — is significantly lower (higher) in firms that did (did not) pursue external funding. This finding may provide some support for our hypothesis regarding the cognitive bias and over-pessimism of the more veteran CEOs who have had negative experiences regarding recruiting external resources. The impact of this entrepreneurial cognition is shown to be economically detrimental to the enterprise. Nevertheless, the negative effects are not limited to the micro level, but have implications at the macro level as well, due to under-realization of the potential for employment, productivity, and growth of the firms comprising the vast majority of the economy.


Pages 423-439
Content available
Cover of Human Capital and Assets in the Networked World
Publication date