What Are the Different Types of Human Capital Strategy?

Strategic human capital refers to those who have some or some special knowledge (capabilities and skills) or some core knowledge or key knowledge in the enterprise's human capital system and are in important or key positions in the business management system Compared with general human capital, human capital is called strategic human capital with a certain degree of speciality and irreplaceability.

Strategic human capital

Right!

Strategic human capital refers to those who have some or some special knowledge (capabilities and skills) or some core knowledge or key knowledge in the enterprise's human capital system and are in important or key positions in the business management system Compared with general human capital, human capital is called strategic human capital with a certain degree of speciality and irreplaceability.

Chinese name

Strategic human capital

Foreign name

Strategic Human Capital

Nature

Management terms

Be applicable

enterprise

In recent years, research on the definition of strategic human capital has become a trend of concern. The definition of human capital begins with the knowledge, experience and skills of individual organizational members as defined by Schultz (1961) and Becker (1964). However, the research on the impact and correlation of this capital on corporate competitive advantage is still in its infancy. The difference between strategic human capital and general human capital is that strategic human capital has strategic attributes. In the field of human resource management, it is generally believed that human capital is the collection of knowledge, experience and skills of organizational members within the boundaries of economic organizations. When human capital is only a form of resources within the boundaries of the enterprise, such capital resources are static and inert. The contribution of human capital to the value of an enterprise depends on whether and how it is used for its strategic competitive goals. Therefore, when targeted controllable human resources are invested to achieve this goal, such human resources are strategic human capital.

Under the framework of resource-based theory, the connotation of strategic human capital is directly expressed as the strategic resources of human capital. Such strategic resources of human capital have the characteristics of directly promoting the generation of corporate organizational capabilities. According to the analysis logic of resource-based theory, the reason why capital-based resources can be transformed into corporate performance is that there are boundary conditions for sustainable competitive advantage. This strategic human capital is a resource-based value boundary condition (value, scarcity, Human capital, which is difficult to imitate and irreplaceable), is a collection of experience, knowledge and skills unique to the organization. Therefore, the definition of strategic human capital is a set of corporate human capital that aims to promote the coordination of human resource practices of the organization's ability attributes and improve strategic control capabilities, thereby promoting enterprises to obtain sustainable competitive advantages. This is different from general human capital. Strategic human capital plays an important role in the implementation of corporate strategy.

I. Strategic human capital is mainly reflected in the capital appreciation utility of senior management and the board of directors

In the field of human resource management, it is generally believed that human capital is the collection of knowledge, experience and skills of organizational members within the boundaries of economic organizations. When human capital is only a form of resources within the boundaries of the enterprise, such capital resources are static and inert.

The value creation attribute of resource endowment to economic organizations is mainly manifested in the input of management activities aimed at organizational goals. Therefore, the contribution of human capital to the value of an enterprise depends on whether and how it is used for its unique strategic competitive goals. The basic problem of strategic competition is how to win the competition for a long time through the use of resources in a competitive market system environment.

Therefore, when targeted controllable human resources are invested to achieve this kind of goal, such human resources are strategic human capital, that is, the enterprise embeds strategic decision-making processes in order to achieve strategic competition and create sustainable competitive advantages. Knowledge, experience, and skills of middle school members.

Within the boundaries of an organization, what is the carrier of strategic human capital? The word "strategy" in strategic human capital means that this special kind of artificial capital is not the knowledge, experience, and skills possessed by ordinary employees, but is the Strategic decisions are closely related to the collection of human capital. Strategy itself is a collection of strategic decision-making levels, consisting of the company, business, and functional layers, but going deep into the decision-making process, the carrier of strategic human capital should be at the level of participants in strategic decision-making, and in the framework of modern corporate systems. This human capital is mainly reflected in the capital appreciation utility of the senior management and the board of directors within the boundaries of the enterprise.

A common hot issue in strategic decision-making and corporate governance practice in high-tech companies is the special agency problem of high-tech companies. The institutional design of the traditional investor as the client can not restrict the executives who execute the decision-making power.

This is because the knowledge, experience and skills of senior management have a much stronger effect on the value generation, value-added and driving of high-tech companies than capital restraint in the general sense. Therefore, in high-tech enterprises, how to effectively design the institutional arrangement for human capital is a key issue in the practice of human resource management and corporate governance.

The strategic human capital of the board of directors reflects how to effectively participate in strategic decision-making, which is a focus of research in the areas of corporate governance and strategic management. As a corporate governance mechanism, the board of directors exercises the dual roles of principal and agent. The traditional principal-agent theory holds that the board of directors monitors the senior management to express its value contribution to the enterprise. However, the practice of global corporate governance shows that the supervisory function of the board of directors and the ways of its value contribution mainly depend on how to participate in the formulation and implementation of strategic decisions. The experience, knowledge and ability of board members in professional and social networks are valuable and scarce resource endowments of enterprises. They and strategic human capital at the senior management level complement each other. Through supervision and joint cooperation, the quality of decision-making is improved, and The company's competitive advantage, so the strategic human capital of the board of directors is represented as board capital. Compared with competitors, this kind of capital has value creation attributes that are difficult to imitate and difficult to replace.

Therefore, corporate strategic human capital is a resource endowment for corporate strategic decision-making, which is mainly composed of the management capabilities of senior management personnel and the capital of the board of directors. So how does strategic human capital, as a resource endowment within the boundaries of an enterprise, create value?

Interpretation of Human Resources Value Creation Approach from the Perspective of Strategic Human Capital

How resources create enterprise value is essentially to answer the basic question of corporate strategic competition, that is, how to develop long-term competition and maintain long-term differences in performance in a competitive market. One of the mainstream views is the theory of enterprise resource foundation. The way for enterprise resource endowment to create value is constructed through the following premise and analysis framework. Specifically, there are two prerequisites, namely: First, the endowment of enterprise resources is heterogeneous in nature, that is, the different states of market competition between enterprises are fundamentally reduced to the controllable and structurally diverse resources within the boundaries of the enterprise. Endowment; Second, this heterogeneous resource endowment is not sufficiently flowing in the competitive factor market, even if there are external market signals that strengthen the intensity of competition. Based on the heterogeneity and incomplete liquidity of enterprise resource endowment, the value creation path of the enterprise is carried out in accordance with the analysis framework of VRIO.

In the VRIO analysis framework, v stands for value, which means that such resources are an indispensable source of value for the enterprise and a basic resource to defeat competitors. R represents the scarcity of this resource in the industry in which the company operates. Value resources refer to resources unique to the enterprise, while scarcity refers to resources unique to the industry. I stands for irreplaceable. It shows that company-specific resources and capabilities are difficult to copy or imitate by competitors. This feature ensures that the competitive advantages generated by enterprise resource endowment can be sustained. Q stands for Organizability, that is, the enterprise has the ability to carry out organizational value activities around the above-mentioned characteristics of asset allocation, including the establishment of incentive and control management mechanisms.

The key difference between the VRIO framework and other related theoretical perspectives in explaining how enterprise resource endowment creates value lies in highlighting the sustainability of corporate competitive advantage. The difference between sustainable competitive advantage and general competitive advantage is not different in time dimension, but refers to different mechanisms for generating competitive advantages, which are also dependent on different resource endowments. In the end, different resource endowments will lead to different sources of corporate competitive advantage and different approaches to value creation. This analysis framework is the logical basis for interpreting the human resource value creation approach from the perspective of strategic human capital.

Third, how companies create value is actually a matter of the path of corporate resources to improve performance

How human resources create corporate value is a central issue in the field of human resource management research. A more concentrated perspective is the practice of human resource management, that is, by exploring how to integrate or decompose the practical activities of human resource management, seeking to understand the reasons why human resources create value. These practices include activities for various human resource management functions, such as employee recruitment, selection, training, and even development. Therefore, in the corporate strategic target system, how to maximize the efficiency of human resource management practices has become a link in creating value for human resource activities. According to the structural attributes of each of the aforementioned VRIO elements, the issue of corporate value creation is actually a matter of exploring the path of how corporate resources improve performance. The path of how human resources create corporate value is expressed as the value creation path of strategic human capital according to the analysis logic of resource theory.

Strategic human capital, as a special resource endowment of enterprises, is formally perceptible, but it is a proprietary intangible resource that is difficult to quantify in the factor market. Such resources are expensive for competitors, whether they are copied or imitated. Intangible resources are mainly the ability of an enterprise to organize economic activities, and the ability of an enterprise to organize and use resources to achieve value creation goals.

Therefore, how to transform tangible resources into intangible resources is an important part of creating value for enterprise resources.

In the way that human resources create enterprise value, it starts with the company's proprietary resource value and scarce attributes of intangible resource forms; then these intangible resources are further transformed into human resource management practice activities with organizational capability attributes, that is, for enterprises Integrate and match human resource management activities and strategy formulation within and outside the borders to form a company's proprietary organizational capability to coordinate human resource management activities and strategy implementation; based on this organizational capability, the company has further formed management around such resources and human resources The management system of practical activities, especially the mechanism of how to motivate and control these resource carriers, finally builds a sustainable competitive advantage that is difficult for competitors to copy and replace.

Strategic human capital is a collection of proprietary human capital of the company's senior management and board members. How to use this kind of capital is not only a transformation process of enterprise resource endowment form, but also a special human resource management practice activity. In the process of strategic competition for enterprises to achieve the goal of value creation, this human resource management practice involves both internal and external aspects. Internally integrate the human resource management system as the source of the company's competitive advantage, that is, match human resource management functions, strategic goals, and specific strategic choice forms within the boundaries of the enterprise as much as possible; externally focus on industry changes outside the boundaries of the organization of the enterprise, and target enterprises Changes in industry conditions and dynamic adjustment of corporate strategy and its target system.

Therefore, the strategic human capital with heterogeneity and scarcity of resource patterns in the implementation of corporate strategy, through the integration of human resources management practices and strategic goals inside and outside the corporate boundary, to form a company-level, business-level and functional-level organizational capabilities As a centered human resource management practice, a competitive advantage based on this coordinated human resource management practice, which is difficult for competitors to copy and replace, has been established, which ultimately improves corporate performance.

Fourth, strategic human capital highlights the special role of system design

The connotation of strategic human capital explains the diversification of the types of corporate human capital and the strategic human capital management issues closely related to strategic decision-making, thus expanding the traditional human resource value attributes and enriching the theory and practice of human resource management. The organizational capability attribute of the coordinated human resource management practice in the strategic human capital value creation approach is an interpretation of the strategic human resource management perspective of the "black box" of the academic circle, which is the relationship between human resources and performance. The connotation of strategic human capital and its value creation methods are conducive to promoting and forming China's professional manager market and human capital pricing mechanism, especially the human capital value of the senior management and the board of directors.

Exploring this value creation mechanism of human capital is conducive to promoting the construction of China's modern enterprise system. Perspective and in-depth study of the connotation of executive human capital and board director capital in the process of corporate strategic decision-making have the effect of reducing agency costs to enrich the practical activities of corporate governance in China. Due to the focus on the human capital and value attributes of senior management and board members, related research is conducive to the transformation of the corporate governance structure in the modern corporate system framework of our country into a corporate governance mechanism, and further highlight the institutional design in the human resource management system. Special effect.