Human Capital as a Process: Learnings from an Rmerging Economy
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Date
2019-01
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Addis Ababa University
Abstract
The purpose of the dissertation is to explore how human capital develops in an organization as a process with a specific focus on its sub-processes and contexts. This thesis defines human capital as a process where employees’ knowledge, skills, and abilities are developed through events, mechanisms, relationships, and patterns that emerge during the process of interactions and interdependencies among employees and between employees and the organization. Studying the process of human capital and how it develops will help in integrating the ‘aggregation’ concept of strategy with the ‘black box’ concept of strategic human resource management. In addition, this thesis will help in studying the processual nature of human capital, and how inner and outer contextual factors affect human capital development. This dissertation sees the process of human capital development through the lens of the social exchange theory.
To achieve the above stated purpose, the dissertation followed two organizations: Ethiopian Airlines and Bishoftu Automotive Industry. Primary data was collected through interviews, observations, participating in official meetings, and listening to previous interviews given by members of the organizations to different media including radio and television programs. It also uses secondary data like document analyses, magazines, reports, and documents from the websites. It follows an interpretative approach in analyzing the data.
The findings of the dissertation show that the process of human capital development proceeds through three sub-processes. First, identifying potential human capital which is determined by ‘who joined’ and ‘how they joined’ the organization. People are joined an organization with their individual human capital like educational level, experience, attitude, behavior, and information processing and professional skills. These all determined as the origins of human capital. The relationships that employees have through their families, ethnic background, and social networks are considered factors for selecting potential human capital. Second, interactions and interdependencies characterized by socioemotional factors (trust, loyalty, fears, stress, tensions, frustrations, and delusive behavior); homosociality (relationship, group gains, and status consistency); and percieved organizational support (recurrent/refresher training, career development training, induction and socialization, access to resources, and benefit packages). Finally, unit or industry specific human capital is developed because of the interactions and interdependencies among employees and between employees and the organization.
In addition, the process of human capital development is positively or negatively determined by inner and outer contextual factors of the organization. Inner contextual factors include employee mobility, strategic human resource management practices, organizational culture, organizational change, structure and infrastructure, and growth of the industry. Outer contextual factors include political, economic, sociocultural, competition, regulatory bodies, and customers. The findings of the dissertation also show the impact that outer contextual factors have on inner contexts and their implications for the process of human capital development.
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Keywords
Employee, Human capital, Process