Connections: How Social Capital unlocks Human Capital

My essay “Why Human Capital needs Social Capital” examines the critical individual / collective dynamic which is often absent in modern HRM (Human Resource Management).  The business school academics Bolton and Houlihan crisply capture this individual / collective ‘dilemma’ (emphasis added):

[Strategic HRM] particularly downplays the psychological contracts between the organisation and employee, and where these might diverge. By viewing the employee as an individual resource unit to be optimally configured and managed, these practices conceptually divorce employees from their social context – that is, other relations, other shaping forces and other commitments (even within the workplace).  In sum, contemporary HRM practice, and the theory that informs it, is based on a thin view of mutuality.

Jeffrey Alexander’s Integrative model is a useful construct to summarise much of my arguments so far.

Alexander model

His two key dimensions involve the level at which order is created (individual or collective) and the nature of action (instrumental versus normative).  The resulting 2×2 gives four windows on differing types of social analysis.  I propose that most “best practice” HRM effort is concentrated on perceiving through the lower two ‘windows’ which focus on the individual (“hard” HRM = Rational Action and “soft” HRM = Voluntary Agency).

I will briefly – in the next few posts – examine three areas highly relevant to business leaders, but do so through a distinctly collective lens. I have positioned these three topics on the 2×2 to indicate not only the collective nature of these phenomena, but also the differing degrees of “rationality” inherent in them.

Three posts

What these three practices all share (and hence their placement at the collective level) is that they need to be catalysed by the presence of trust.  No trust = no real impact!

But what is this intangible thing called trust?  Here I present just two.

Trust

Trust is also described by Barbara Misztal as having the following three properties.

Trust:

  1. makes social life predictable
  2. creates a sense of community
  3. makes it easier for people to work together

Trust is the cornerstone of social capital.  I will now consider in the following three posts how this usually overlooked “commonwealth” wonderfully unlocks – the typically latent promise in – human capital.

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