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Book part
Publication date: 16 December 2016

Alexandre Rambaud and Jacques Richard

This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some “traditional”…

Abstract

Purpose

This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some “traditional” (founding) accounting concepts. From this study, to avoid the accounting and social issues highlighted in “Introduction to the Human Capital Issue,” we present, in “The “Triple Depreciation Line” Model and the Human Capital,” the “Triple Depreciation Line” (TDL) accounting model, developed by Rambaud & Richard (2015b), and we apply it to “HC,” but viewed as genuine accounting capital – a matter of concern – that firms have to protect and maintain.

Methodology/approach

From a critical review of literature on HC theory, from the origin of this concept to its connection with sustainable development, this chapter provides a conceptual discussion on this notion and on the differences/common points between capital and assets in accounting and economics. Then, it uses a normative accounting model (TDL), initially introduced to extend, in a consistent way, financial accounting to extra-financial issues.

Findings

This analysis shows at first that the standard (economic) HC theory is based on a (deliberate) confusion between assets and capital, in line with a standard economic perspective on capital. Therefore, this particular viewpoint implies: an accounting issue for reporting HC, because “traditional” accounting capital and assets are clearly isolated concepts; and a societal issue, because this confusion leads to the idea that HC does not mean that human beings are “capital” (i.e., essential), or have to be maintained, even protected, for themselves. It only means that human beings are mere productive means. The application of the TDL model to an accounting redefinition of HC allows a discussion about some key issues involved in the notion of HC, including the difference between the standard and “accounting” narratives on HC. Finally, this chapter presents some important consequences of this accounting model for HC: the disappearance of the concept of wage and the possibility of reporting repeated (or continuous) use of HC directly in the balance sheet.

Research implications

This chapter contributes to the literature on HC and in general on capital and assets, by stressing in particular some confusions and misunderstandings in these concepts. It fosters a cross-disciplinary approach of these issues, through economic, accounting, and sustainability viewpoints. This analysis also participates in the development of the TDL model and the research project associated. It finally proposes another perspective, more sustainable, on HC and HC reporting.

Social implications

The stakes of HC are important in today’s economics, accounting, and sustainable development. The different conceptualizations of HC, and the narratives behind it, may have deep social and corporate implications. In this context, this analysis provides a conceptual, and practicable, framework to develop a more sustainable concept of HC and to enhance working conditions, internal business relations, integrated reporting. As an outcome of these ideas, this chapter also questions the standard corporate governance models.

Originality/value

This chapter gives an original perspective on HC, and in general on the concept of capital, combining an economic and an accounting analysis. It also develops a new way to report HC, using an innovative integrated accounting model, the TDL model.

Details

Finance and Economy for Society: Integrating Sustainability
Type: Book
ISBN: 978-1-78635-509-6

Keywords

Article
Publication date: 4 February 2021

Samer Eid Dahiyat, Suhad Mohammad Khasawneh, Nick Bontis and Mohammad Al-Dahiyat

This study aims to develop and empirically test a “stocks and flows”-based model of intellectual capital (IC) that examines how human-embodied knowledge (i.e., human capital) can…

Abstract

Purpose

This study aims to develop and empirically test a “stocks and flows”-based model of intellectual capital (IC) that examines how human-embodied knowledge (i.e., human capital) can be transformed into organisational non-embodied knowledge (i.e., organisational capital) through the mediating roles of social capital and the knowledge management (KM) process of knowledge transfer.

Design/methodology/approach

A structural model was developed and empirically tested using a survey data set of 295 questionnaires collected from the “knowledge-intensive” pharmaceutical manufacturing industry in Jordan.

Findings

Empirical results revealed that each of human capital, social capital and knowledge transfer has a positive and significant effect on organizational capital. In particular, knowledge transfer emerged as having the strongest effect. Social capital, on the other hand, emerged as having a positive and significant effect on knowledge transfer. Mediation analysis revealed that while human capital significantly affects organizational capital, such an effect is partially and significantly mediated by each of social capital as well as knowledge transfer.

Practical implications

This study provides senior managers in pharmaceutical manufacturing firms with valuable insights pertaining to the development of their IC, in terms of how to exploit their knowledge stocks (i.e. human-embodied knowledge and organizational non-embodied knowledge) through managing knowledge flows between them. This was shown to be significantly leveraged by the mediating roles of social capital as well as knowledge transfer.

Originality/value

This study provides important theoretical and empirical contributions to the extant literature in a number of ways. It provides better understanding of the intricate linkages among IC dimensions, and how these play complementary roles in organizational capital development. It has also provided important empirical evidence highlighting the vital mediating roles of social capital and knowledge transfer in facilitating knowledge flows, which aid in transforming human-embodied knowledge stocks into organizational-embodied ones.

Details

VINE Journal of Information and Knowledge Management Systems, vol. 53 no. 1
Type: Research Article
ISSN: 2059-5891

Keywords

Article
Publication date: 4 April 2008

Subhash Abhayawansa and Indra Abeysekera

Although the importance of human capital (HC) in firm value creation is firmly established in the literature, the level of emphasis placed on human capital disclosure (HCD) by…

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Abstract

Purpose

Although the importance of human capital (HC) in firm value creation is firmly established in the literature, the level of emphasis placed on human capital disclosure (HCD) by preparers of financial statements and sell‐side analysts is minimal. The purpose of this paper is to address this dilemma by critically analysing the conceptualisation of HC in disclosure literature and introduce a more suitable explanation.

Design/methodology/approach

The paper begins by reviewing the literature on intellectual capital disclosure (ICD) to examine the level of HCD in various company media and the use of such information by the capital market. It then critically analyses the conceptualisation of HC in those studies with a view to forming an opinion about the adequacy of that conceptualisation. Then the resource‐based view is justified as providing a more appropriate conceptualisation of HC to meet demands of the capital market.

Findings

Substantial ICD literature conceptualises HC using HC theory as a collection of knowledge and competences possessed by employees individually and collectively in firms. This has resulted in HC disclosure scores being considerably low compared to external and internal capital disclosure and does not portray HC in a way that is useful to the capital market. A resource‐based perspective enables HC to be depicted in a way that closely resembles the value creation potential of firms' employees.

Practical implications

Guidance is provided for future HCD and ICD studies to operationalise HC and to reflect its value creation potential by encompassing not only the firm specific stock of knowledge and capabilities of employees, but also the strategic HC management practices. Thus the corporate culture and the idiosyncratic systems and practices of the firm which are in place are enabled in to reaping the benefits of these.

Originality/value

ICD literature portrays HC as the least important intellectual capital subcategory. However, anecdotal evidence suggests otherwise. This study is the first attempt to clarify and provide an explanation to this dilemma.

Details

Journal of Human Resource Costing & Accounting, vol. 12 no. 1
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 5 September 2020

Francisca Tejedo-Romero and Joaquim Filipe Ferraz Esteves Araujo

The main objective of this paper is to analyse the content and extent of human capital disclosure by Spanish companies. It studies various factors related to the board of…

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Abstract

Purpose

The main objective of this paper is to analyse the content and extent of human capital disclosure by Spanish companies. It studies various factors related to the board of directors’ composition and functioning. These factors can be seen as mechanisms of corporate governance and the moderating role of managerial ownership, which help predict the behaviour of managers in relation to the human capital disclosure.

Design/methodology/approach

This study develops and applies a more comprehensive framework for coding information on human capital, integrating the intellectual capital and social responsibility perspectives in order to explain the content and extent of human capital disclosure. The research was based on a content analysis of 210 corporate reports from 2007 to 2016. A system-GMM estimator was used to test the hypotheses in four dynamic linear regression models of balanced panel data in order to address concerns of endogeneity.

Findings

The results show that companies are adapting to new regulations and voluntarily disclosing information on human capital – a trend which signals their commitment to responsible attitudes towards employees and stakeholders. The results also show that board composition and functioning are mechanisms of supervision, control and legitimacy that promote human capital disclosure, with managerial ownership acting as moderator for aligning interests between managers and stakeholders.

Originality/value

This study contributes to the literature on human capital disclosure by introducing a broader conception of human capital to coding information. It accomplishes this through considering aspects of the intellectual capital and social responsibility approaches, which provide a better understanding of companies’ human capital disclosure. In addition, it seeks to enrich the debate about the effects of corporate governance mechanisms– such as boards of directors and managerial ownership – on human capital disclosure.

Details

Journal of Intellectual Capital, vol. 23 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

Book part
Publication date: 19 August 2017

Krishna Priya Rolla

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…

Abstract

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.

Details

Human Capital and Assets in the Networked World
Type: Book
ISBN: 978-1-78714-828-4

Keywords

Article
Publication date: 27 July 2021

Antonio Salvi, Nicola Raimo, Felice Petruzzella and Filippo Vitolla

The purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this…

Abstract

Purpose

The purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this work examines the effect of HC information on the cost of capital and firm value.

Design/methodology/approach

A manual content analysis is used to measure the level of HC information contained in integrated reports. A fixed-effects regression model is used to analyse 375 observations (a balanced panel of 125 firms for the period 2017–2019) and test the financial consequences of HC disclosure.

Findings

The empirical outcomes indicate that HC disclosure has a significant and negative effect on the cost of capital and a positive impact on firm value. Our results show that companies can reduce investors' perceived firm risk by improving HC disclosure, leading to a lower cost of capital. Moreover, our findings support the notion that increased levels of HC disclosure are linked to firms' improved access to external financial resources, consequently enhancing firm value.

Originality/value

This study is the first contribution to examine the financial consequences of HC disclosure and is one of the first to examine the level of HC information within integrated reports.

Details

Journal of Intellectual Capital, vol. 23 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 30 December 2021

Nagwan Abdulwahab AlQershi, Ramayah Thurasamy, Gamal Abdualmajed Ali, Hussein Abu Al-Rejal, Amr Al-Ganad and Ebrahim Frhan

This paper aims to examine the mediating role of human capital on the talent management in hospitals’ sustainable business performance in the health-care sector of Malaysia.

1008

Abstract

Purpose

This paper aims to examine the mediating role of human capital on the talent management in hospitals’ sustainable business performance in the health-care sector of Malaysia.

Design/methodology/approach

The study used a quantitative approach, with an initial sample of 174 Malaysian hospitals. The theoretical framework was based on previous studies of talent management (TM), human capital (HC) and sustainable business performance (SBP). Partial least squares-structural equation modelling (PLS-SEM) was used to test the study’s hypotheses.

Findings

Talent management mindset (TMM), but not talent management strategy (TMS), has a significant relationship with HC and SBP. HC has a significant direct relationship with SBP, and also mediates the relationship between TMM and SBP but not between TMS and SBP.

Research limitations/implications

This work is one of a limited number of studies to empirically address TM, HC and SBP in this context. The study is limited to Malaysian hospitals. It provides theoretical contributions by broadening the knowledge of HC, TM and the multifocal perspective of hospitals’ SBP, a relevant but underexplored issue, offering several avenues for future research.

Practical implications

The findings have beneficial practical implications for both policy makers and managers. First, focusing on talented people will directly improve sustainable performance in the Malaysian health sector. The findings also have important theoretical implications both for Malaysia and countries in similar situations. The study will serve as a reference point for such countries in trying to understand factors influencing SBP.

Originality/value

This is the first study to examine the mediating effect of HC on the relationship between talent management and hospitals’ sustainable business performance in Malaysia, or worldwide.

Details

International Journal of Ethics and Systems, vol. 38 no. 2
Type: Research Article
ISSN: 2514-9369

Keywords

Article
Publication date: 1 June 2010

Lutfihak Alpkan, Cagri Bulut, Gurhan Gunday, Gunduz Ulusoy and Kemal Kilic

The main purpose of this paper is to investigate the direct and interactive effects of organizational support and human capital on the innovative performance of companies…

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Abstract

Purpose

The main purpose of this paper is to investigate the direct and interactive effects of organizational support and human capital on the innovative performance of companies. Individual effects of the organizational support dimensions, namely: management support for generating and developing new business ideas, allocation of free time, convenient organizational structures concerning, in particular, decentralization level or decision‐making autonomy, appropriate use of incentives and rewards, and tolerance for trial‐and‐errors or failures in cases of creative undertakings or risky project implementations, are also to be investigated.

Design/methodology/approach

The study develops and tests a theoretical research model where the organizational support dimensions are the independent variables, innovative performance is the dependent variable, and the human capital has a moderating role in this relationship, via a questionnaire study covering 184 manufacturing firms in Turkey.

Findings

Among the individual direct effects of the dimensions of organizational support, management support for idea development and tolerance for risk taking are found to exert positive effects on innovative performance. Availability of a performance based reward system and free time have no impact on innovativeness, while work discretion has a negative one. As for the role of human capital (HC), it is found to be an important driver of innovative performance especially when the OS is limited. However, when the levels of both HC and OS are high, innovative performance does not increase any further.

Originality/value

Two distinct research streams, namely organizational support literature and human capital literature, have already focused on their individual impacts on the innovative performance. However, a combination of these separate streams was not tried before. The paper discusses and investigates what will happen when both positive drivers interact with each other. Moreover, it also investigates how organizational support and human capital are complementary.

Details

Management Decision, vol. 48 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 2 November 2010

Vivien Beattie and Sarah Jane Smith

The purpose of this paper is to explore, empirically, the contribution of human capital (HC) to value creation and the external disclosure of HC. The specific aims are to…

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Abstract

Purpose

The purpose of this paper is to explore, empirically, the contribution of human capital (HC) to value creation and the external disclosure of HC. The specific aims are to: investigate the relative contribution of HC to the generation of firm value; compare the differences in the perceptions of human resource (HR) directors and finance directors (FDs) in relation to this contribution; examine the relationship between the internal collation and external disclosure of HC information; investigate incentives and disincentives to the external disclosure of HC information; and investigate the most appropriate medium to externally disclose HC information.

Design/methodology/approach

A questionnaire survey of (HR) directors of UK listed companies was conducted. Responses are compared to those from FDs obtained from a previous survey on the broader concept of intellectual capital disclosure. In total, 13 follow‐up interviews were conducted. The matched views of the (HR) specialist and the FD are compared for eight case companies.

Findings

Employee skills and education, employee commitment, positive employee attitudes and behaviour, and employee motivation are considered to contribute to value creation the most. Information on employee turnover, employee training and development, and workplace safety is frequently collated. There also appears to be attempts to capture information on aspects such as employee satisfaction, motivation, and commitment. Marked differences exist between the extent to which information is internally collated and externally disclosed. External disclosure appears to be a valuable recruitment tool. However, giving away information which may harm competitive advantage is a serious concern. The annual report was considered the most effective written form of communication for disclosing HC externally. Despite some disparity in views, there is evidence to suggest recognition by FDs of the value of human capital and commitment to its external disclosure. Contrary to prior research, evidence from the small matched sample indicates no significant difference in views between the two functional specialists regarding the importance to value creation of four key HC components.

Research limitations/implications

A comparison across the full range of HC issues is not possible as the FD IC survey was unable to address HC in as much detail as the HC survey.

Originality/value

This paper contributes to the understanding of HC and its disclosure by comprehensively investigating such issues for a large sample of UK companies.

Details

Journal of Human Resource Costing & Accounting, vol. 14 no. 4
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 19 October 2012

Bunjongjit Rompho and Sununta Siengthai

The purpose of the study is to explore the relationship between performance measurement systems (PMSs) and organizational learning (OL) and the impact on firm human capital

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Abstract

Purpose

The purpose of the study is to explore the relationship between performance measurement systems (PMSs) and organizational learning (OL) and the impact on firm human capital building.

Design/methodology/approach

Data were collected using a survey instrument. Then, a structural equation model (SEM) was used to test the proposed model.

Findings

The results reveal that PMS, which is designed with three main qualities – valid, comprehensive, and coherent with its environment – has an overall positive relationship with OL and firm's human capital (employee satisfaction and work‐related competencies). First, the validity of the individual performance measure is found to be positively linked to employee satisfaction. Second, the comprehensiveness of the PMS and work‐related competencies are positively associated. Third, the coherence of the PMS with its environment has a positive relationship with OL but not directly with the human capital indicators. Thus, OL, which is positively associated with both work‐related competencies and employee satisfaction, mediates the relationship between the coherence of the PMS and the work‐related competencies.

Originality/value

There are some linkages among these three concepts (PMS, OL and human capital) that have not been specifically explored in the existing relevant studies. Previous studies have asserted that human capital could not be utilized and nurtured without supporting infrastructure. Therefore, this study explores the relationships among the three constructs to uncover the additional benefits of PMS and OL for different purposes such as building firm's human capital. This could help firms to improve the utilization of their existing management tools and their competitiveness.

Details

Journal of Intellectual Capital, vol. 13 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

1 – 10 of over 1000