Strathmore Universiy Business School Logo

News

Linking Human Resource Managers Role to Social Capital

  Oct 7, 2011
 

By Esther Kanyi

Seven years ago, I attended a presentation by Andrea Widmer, former President and CEO of OTF Group and Co-founder of Seven Funds, during a youth conference organised by World Youth Alliance. His presentation was focused on globalization and development. His approach to this topic was on the ‘Seven Forms of Capital’ and how they foster development when applied categorically. His presentation highlighted areas where we fail when adopting or employing various types of capital in particular areas.

Wilderman categorized the forms of capital into two; higher forms, commonly known as social capital, which include Cultural, Human, Knowledge, and Institutional. Man Made, Financial and Natural resource fall under the lower forms of capital, commonly known as physical capital.

It is important to take note of the rank as it uncovers why successful companies always remain ahead. Companies that have adopted the higher forms of capital firmly have benefited by achieving tremendous growth in terms of profits and high productivity. In the example of developed countries versus developing countries, countries such as Democratic Republic of Congo, Sudan among others are ‘well – to –do’ in terms of physical capital unlike countries like Israel, China, Japan which are doing so well notwithstanding the minimal physical resources they have. Why then are they progressing unlike many African countries? They have invested a lot more on their social capital. Can this approach be adopted by companies? Yes. What companies need to do is to have a strategy that will create sustainable advantage relative to the competition and top- quality returns the organisation hopes to achieve in line with balancing the various forms of social capital.

For human resource personnel, social capital is what is more relevant. Social capital is all about relationships and relationships in businesses are with people. When we talk about people, all the forms of social capitals are represented. Thus for a business and/or organisation to be successful, the higher forms of capital must be in order and affirmed.

Cultural Capital

Under cultural capital, what is most important is the attitude and values of the employees or prospective employees which can be linked to planning, time management, trust, innovation skills, team work and self-esteem though not limited to the sense of personal competence. It can be measured or evaluated in terms of punctuality, personal organisation, meeting deadlines and general work ethics of the employees. Cultural capital is all about the intangibles, it is more of values and how those values are represented by members of staff and used for the benefit of customer satisfaction and the progressive growth of the institution; therefore it has to be given highest priority when looking for employees who should fit in if excellence has to be achieved. Culture is ranked as the highest form of capital because this is what creates an organisation’s image. People will learn or get impressed with what they see rather than what they hear. If employees of any given organisation have a bad reputation, so will the organisation.

A competitive organisation will ensure there is provision of improving cultural capital by putting improvement mechanism such as personal growth programs, team building sessions, and good beneficial packages such, leave packages among others.

Human Capital

It is ranked as the second highest capital. To the human resource managers, human capital is normally measured through quality of education, future career development, and personal attributes. Thus, for a company to continue having the best employees, they should employ people who meet their requirements. Institutions should be in the forefront of helping improve their human capital by stepping up human capital influential methods such as scholarship for their staff, medical covers, reasonable salary packages and specialized training. A productive company is one that has low staff turnover, innovative and self driven staff, healthy and satisfied members and above all higher rate of members advancing their career aspirations. Hence, as companies recruit, various considerations have to be in place to ensure that it is not only about the organisation’s growth but also how the organisation can maintain high standards at the same time grow with its members.

Knowledge Capital

Each organisation should have a base of ‘Think Tanks’ who can shape and direct the organization. Successful companies and institutions ensure they have recognized ‘think tanks’ who are highly influential. Knowledge capital is a fundamental form of capital that needs to be developed intensively especially in Africa.

Institutional Capital

Institutional capital is very central as it entails the vision and mission of the organisation. It helps in strategic planning and decision making, as a rule the two (vision and mission) are the unchanging ideals of an institution. They include core values, core purpose and visionary goals which bring correlation between all the other aforementioned forms of capital. Thus, HR managers have a role to play when recruiting as they ought to keep in mind where the organisation is and where it wants to be in future in order to know how to blend, human capital to the institutional.



Share This:

Sign up to receive important news and information from Strathmore University Business School

  • This field is for validation purposes and should be left unchanged.

Global Partners

Twitter Feed

Important Links

Globals

Social Media