Team‐specific Human Capital and Performance

DOIhttp://doi.org/10.1111/1467-8551.12173
Published date01 January 2018
AuthorAndy Lockett,Bill Gerrard
Date01 January 2018
British Journal of Management, Vol. 29, 10–25 (2018)
DOI: 10.1111/1467-8551.12173
Team-specific Human Capital
and Performance
Bill Gerrard and Andy Lockett1
Leeds University Business School, University of Leeds, Leeds LS2 9JT, UK, and 1Warwick Business School,
University of Warwick, Coventry, CV4 7AL, UK
Corresponding author email: andy.lockett@wbs.ac.uk
In this paper we explore the eects of team-specific human capital (TSHC) on perfor-
mance. We do so by delineating betweentwo dimensions of TSHC, relating to team mem-
bers and the team manager, and then exploring how the two dimensions may interact in
shaping performance. Employing a 10-year panel of footballteams from the English Pre-
mier League we find that team members’ TSHC has a positive and significant eect on
team performance, which is positively moderatedby managers’ TSHC. Our results attest
to the importance of considering both the team member and team manager dimensions of
TSHC, and how the performance eects of team members’ TSHC are shaped by man-
agers’ TSHC. Our results stand in stark contrastto the dramatic reduction in managerial
tenure that has characterized the English Premier League in recent years.
Over the last 15 years, scholars of the resource-
based view (RBV) have highlighted the role of
human capital (HC) as a key factor explaining why
some firms outperform others (Acedo, Barroso
and Galan, 2006; Barney, 1991; Barney, Wright
and Ketchen, 2001; Co, 1999). HC resources,
however, raise a number of challenges for firms
wishing to create a position of sustainable com-
petitive advantage. First, HC resources may be
dicult to protect, as individuals have relative
freedom to move between rivals (Hatch and Dyer,
2004). Second, for HC to lead to sustainable
performance dierences for teams requires the
presence of isolating mechanisms (Rumelt, 1984),
which may include specificity, causal ambiguity,
social complexity and path dependence (see
Ambrosini and Bowman, 2010; Dierickx and
Cool, 1989; Lippman and Rumelt, 1982; Reed and
DeFillippi, 1990). By definition, such isolating
mechanisms protect HC resources from appropri-
ation or imitation, making empirical assessment
of their importance problematic (Ambrosini and
Bowman, 2001; Godfrey and Hill, 1995; Lockett
and Thompson, 2001; Rouse and Daellenbach,
1999).
Perhaps unsurprisingly, given the issues raised
above, recent meta-analyses indicate that evidence
of the resourceperformance relationship is less
than conclusive (Barney and Arikan, 2001; Crook
et al., 2008; Newbert, 2007) with Newbert’s (2007)
meta-analysis providing specific evidence of the
relationship between HC and performance being
equivocal in nature. We suggest that such equiv-
ocality may arise from extant studies employing
variables that are analytically convenient but are
not the most salient ones from an HC perspec-
tive (Lockett, Thompson and Morgenstern (2009)
for an RBV perspective), and the dominance of
cross-sectional study designs that do not allow for
resource-accumulation processes to play through
into performance enhancements. In this paper we
address these concerns by focusing on the iso-
lating mechanism of the specificity of HC, em-
ploying Becker’s (1962) distinction between gen-
eral and specific HC and utilizing a panel data
design.
Following the lead of Chillemi and Gui (1997)
and Huckman and Pisano (2006), we focus on
the role of team-specific HC (henceforth TSHC)
in shaping team performance. TSHC constitutes
© 2016 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
Team-specific Human Capital and Performance 11
the skills and knowledge that individuals develop
through interacting with one another, and is most
valuable when employed in the team context in
which it was developed (Blair, 1999). As such,
TSHC is a particularly interesting resource for
RBV scholars because it is path dependent in na-
ture, being a unique and valuable skill that is devel-
oped over time. Furthermore, in contrast to gen-
eral HC, TSHC is tied semi-permanently to a team
and is thus very dicult to trade or exchange with-
out loss of value (Co, 1999; Grant, 1996; Penrose,
1959).
Drawing on the work of Berman, Down and
Hill (2002) and Huckman, Staats and Upton
(2009), who dierentiate between the dierent
roles individuals may perform in a team, we con-
tribute to RBV and HC theory by conceptualizing
TSHC as a multi-dimensional concept. Specif-
ically, we delineate two dimensions of TSHC,
team member TSHC and team manager TSHC,
and then develop the following arguments about
their interrelationships with team performance.
First, team members develop team member TSHC
through their tenure with a team, which we argue
has a positive eect on team performance.Second,
managers develop team manager TSHC through
their tenure with a team, which we suggest pos-
itively moderates the relationship between team
member TSHC and team performance. By sepa-
rating out the eects of team member TSHC and
team manager TSHC we are able to explore how
managerial tenure influences team performance,
and how changes in managers may reducethe pos-
itive performance eects of team member TSHC.
In doing so, we are able to advance scholarship
of RBV and HC by examining the conditions
under which important firm-specific resources are
developed, and with what performance eects.
Furthermore, we are also able to advance prior
research on the relationship between managerial
tenure and performance that does not account for
the quality of HC (Hughes et al., 2010).
Wetest our model using a 10-year panel of foot-
ball organizations competing in the English Pre-
mier League (EPL). Adopting a panel data ap-
proach, we are able to overcome the limitations
of cross-sectional studies that do not capture the
lagged eects of investments in HC or changes in
performance over time froma build-up of superior
HC. Our approachenables us to capture the eects
of TSHC as it is developed over time, and/or de-
stroyed,through changes to team members and the
team manager over time.
Team-specific human capital and
performance
A central quest for scholars of the RBV has been
to link sustainable performance dierences to re-
source endowments (Hatch and Dyer, 2004). A
key resource of any organization is HC, which we
conceptualize employing Becker’s theory of HC
(Becker, 1962, 1975). The HC of individuals is
determined by their knowledge, skills and abili-
ties (Schultz, 1961), and may be accumulated via
work, education and other activities and habits
(Becker, 1962, 1975). HC may be viewed as con-
sisting of a hierarchy of skills and knowledge with
varying degrees of transferability across contexts
(Castanias and Helfat, 1991). Becker (1993) ar-
gues that the most influential theoretical concept
in HC analysis is the distinction between general
and specific HC. General HC is independent of any
context and can be transferred eectively across
organizations or teams. Specific HC relates to
skills and knowledge that are less transferable be-
tween contexts and havea much narrower scope of
applicability (Gimeno et al., 1997).
The notion of specific HC has traditionally been
related to the firm and employed by economists to
examine the remuneration implications of individ-
uals developing either general and/or firm-specific
HC (Addison and Siebert, 1979). Following the
lead of Chillemi and Gui (1997), who developed
the notion of TSHC as a non-material asset de-
rived from customs developed by the individuals
in a team, we focus on TSHC and examine its per-
formance eects. In doing so we acknowledgethat
individuals in a team may perform dierent roles
(Berman, Down and Hill, 2002; Huckman, Staats
and Upton, 2009) and delineate two dierent di-
mensions of TSHC: team member TSHC and team
manager TSHC. We expand on these ideas below.
Team member TSHC
Team member TSHC is developed through the
tenure of a team member with a team, which
may arise in three main ways. First, over time
specific training can be implemented that will
hone the skills of the individual so that they are
better suited to their organization. Team-specific
© 2016 British Academy of Management.

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