Human capital flows in failing organizations: an integrated conceptual framework
| Pages | 732-746 |
| DOI | https://doi.org/10.1108/JIC-05-2017-0065 |
| Date | 15 June 2018 |
| Published date | 15 June 2018 |
| Author | Joseph Amankwah-Amoah |
| Subject Matter | HR & organizational behaviour,Accounting/accountancy,Behavioural accounting,Knowledge management,Information & knowledge management |
Human capital flows in failing
organizations: an integrated
conceptual framework
Joseph Amankwah-Amoah
Kent Business School, University of Kent, Canterbury, UK
Abstract
Purpose –The purpose of this paper is to examine the dynamics of human capital accumulation and human
capital depletion in the processes leading to business failure.
Design/methodology/approach –Building on the human capital theory, strategic human resource and
business failure literature, this paper develops a conceptual framework which links the inward and outward
dimensions of human capital flows in the business failure process.
Findings –The analysis sheds light on why some highly skilled individuals may opt to flee declining firms
to avoid being stigmatised whilst others become motivated to joint such firms.
Research limitations/implications –The paper suggests that understanding the nature and dynamics of
both flows are essential when seeking to avert collapse.
Originality/value –In spite of a growing body of research on business failure and intense competition for
top talent, much of the existing literature has circumvented the relationship between them. This study
develops a unified model towards enhancing our understanding of the human capital flows.
Keywords Business strategy, Human capital, Human resource management, Assets, Closure
Paper type Conceptual paper
Introduction
Over the past couple of decades, a burgeoning stream of research has demonstrated that
when companies are collapsing or experiencing declining performance, some highly skilled
individuals jump ship to avoid being stigmatised and stereotyped (Jiang et al. , 2017;
Semadeni et al., 2008; Sutton and Callahan, 1987; Pozner, 2008). Indeed, threat of business
failure has an emotional and psychological effect which then influences employees’mobility
just before or after the collapse (see Shepherd, 2003). Given that top-management team
members are often stigmatised by failure, it makes sense for some to jump ship (Wiesenfeld
et al., 2008). Nevertheless, there might be another side of the coin where some highly skilled
individuals and reputable organisations decide to get “on board”such failing firms. Indeed,
human capital accumulation can play a pivotal role in reversing the business decline process
(see D’Aveni, 1990). Yet the theoretical grounds on which the current streams of scholarly
works have been reformulated and examined have yet to fully embrace and explore both
dimensions of human capital flows just before business collapse.
Although human capital diffuses in, out and through declining organisations before
collapse, many of the existing scholarly works have examined one type of human capital
flow at a time ( Jiang et al., 2017; Semadeni et al., 2008), with little or no attempt to integrate
these streams of research. This lacuna in our understanding is surprising given that
there still remains a lack of a comprehensive and integrated conceptual model to articulate
different aspects of human capital flow into or out of collapsing firms. Given that
human resource remains one of the most valuable organisational strategic assets
(Crook et al., 2011), inflows and outflows can play a pivotal role in determining a firm’s
ability to combat performance decline (see Pennings et al., 1998). Although the possession
of scarce human capital is important to sustain competitive edge, the ability to control
the flow is a quintessential element during turbulent periods (Ployhart et al., 2009;
Ramadan et al., 2017).
Journal of Intellectual Capital
Vol. 19 No. 4, 2018
pp. 732-746
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-05-2017-0065
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
732
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