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Construction of structural Construction of


structural
dimensions of organizational dimensions of
OHCCA
human capital
competitive advantage 1081
Wenchen Guo and Mengxin Chen Received 9 July 2020
Revised 3 December 2020
School of Economics and Management, Dalian University of Technology, 6 March 2021
Dalian, China Accepted 28 April 2021

Abstract
Purpose – This paper aims to clarify the factors that affect the formation of organizational human capital
competitive advantage (OHCCA) and construct its structural dimensions.
Design/methodology/approach – This research method adopted grounded theory using 20 interviews of
managers from 10 companies. Relevant literature was reviewed to conduct open coding, Axial coding and
selective coding to ensure OHCCA concept and dimensions.
Findings – Studies have shown that OHCCA formation of results from investment and collaboration of three
levels: organization, teams and departments and employees. OHCCA formation is composed of three
dimensions of organizational human capital investment: planning, practice and stock.
Research limitations/implications – This research enriches the organizational human capital and
competitive advantage theories.
Practical implications – The practical significance is to provide theoretical and practical guidance for
organizations in creating OHCCAs.
Originality/value – This research is the first to propose and define the OHCCA concept and construct a three-
dimensional structure model. Furthermore, this research has revealed the leading factors that affect OHCCA’s
formation process.
Keywords Human capital, Organizational human capital competitive advantage, Structural dimension,
Formation process, Human capital investment
Paper type Research paper

1. Introduction
Human capital theory was formulated more than half a century ago, and theorists have
recently shown a strong interest in human capital research. Scholars have explored the
human capital concept, structural dimensions, measurement tool development, interfering
factors (antecedent, outcome, intermediary and moderating variables), individual human
capital value, human capital resources and transformation of human capital resources into
organizational competitive advantages. Meanwhile, from the business practice perspective,
the main challenge of modern enterprises facing is to understand how human capital drives
the development of the organization in the context of the dynamic development of the global
economy. Which is required a clear understanding of the role of human capital in
organizations especially in the competitive background (Rosi nska-Bukowska, 2019).
Organizations need strong forecasting and resilience respond to the current changing
environment and technology scenarios to maintain their competitive advantages also will
explore new opportunities in the future (Kaur et al., 2019; Piekkola, 2020).
Scholars who mainly focus on strategic, organizational, and human resource
management, economics, psychology, accounting and other fields have demonstrated
interests in human capital research and have shown numerous outcomes. For instance, Journal of Intellectual Capital
Vol. 23 No. 5, 2022
pp. 1081-1106
© Emerald Publishing Limited
1469-1930
Thanks to the National Social Science Fund of China (17BGL111) for its support for this project. DOI 10.1108/JIC-07-2020-0223
JIC scholars in human resources, organizational behavior and industrial–organizational
23,5 psychology focus on studying the relationship between employees’ KSAOs and individual-
level personal performance (Schmidt and Hunter, 1998). According to research on macro-
organizational theory and strategic theory scholars, employees’ organization-level
experience, education and skills are organizational resources (Teece, 1982; Rumelt, 1984;
Wernerfelt, 1984; Penrose, 1995) that maintain the leverage effect of organizational
competitive advantage (Barney, 1991; Peteraf, 1993).
1082 Throughout the history of human capital research, it is found that experts and scholars
are gradually deepening their understanding of the value and function of human capital.
Ployhart and Moliterno (2011) extended these achievements by proposing that human capital
originated from various individual KSAOs. Organizational human capital is not a simple
summation of individual human capital. Human capital resource is a form of capital that not
only depends on individual human capital but also surpasses it by integration (Zhao, 2011).
The source of competitive advantage is mainly the combination of human capital
resources, even if they come from simple, imitable or tradable resources. As the result of the
constitution of human capital resources are complex and unique to the enterprise. The
combination of human capital resources may be more valuable, rarer and more unique, and
likely to produce higher sustainable value compared with signal human capital resources.
Synergies between resources may also exist, thereby enhancing their ability to generate
competitive advantage. After establishing the importance of perception in the existing
human capital theory, we can redefine competitive advantage as the produced by the
systematic impact of perception and the actual investment in specific skills and capabilities of
the enterprise. Therefore, it is vital to explain how the company’s unique concept of human
capital affects competitive advantage. Enterprise-specific human capital is considered a
source of sustained competitive advantage because it retains valuable employees while
allowing the company to gain some benefits from the company’s specific skills. How firms
create human capital differentiation is a central issue in the management field because it can
be a vital source of competitive advantage (Barney and Wright, 1998).
In total, current studies mainly focus on the relationship between individual human
capital and human capital resources, the impact of specific human capital, combination of
human capital resources and differentiation of human capital on competitive advantages.
Existing research results have expanded the recognition of human capital from individual to
organization-level or multi-level research (Nyberg and Wright, 2015). However, from an
economic to a management perspective and from a single to various subjects. But so far, there
are different opinions on whether the human capital of the organization itself constitutes the
competitive advantage of the organization. Macro scholars regard human capital as an
organizational resource with sustained competitive advantages (Wright et al., 1994). Some
scholars believe that only organizational specific human capital (special human capital,
proprietary human capital) is a source of organizational competitive advantage, and
organizational general human capital is not (Barney, 1991). Some scholars also believe that
both general human capital and specific human capital are sources of organizational competitive
advantage (Robert and Thomas, 2011). Some scholars approximate that organizational human
capital cannot become an organizational competitive advantage. In other words, certain
conditions drive organizational human capital’s conversion into competitive advantage.
The current research focuses on the relationship between the organizational human
capital or human capital resources and the organizational competitive advantage. It is
demonstrated from the definition, dimensions, characteristics and value of organizational
human capital and competitive advantage, but it ignores that create competitive advantage is
the foundation of sustainable development. Thus, creation of an organizational human
capital competitive advantage is one of its core contents to realize it. How does organizational
human capital competitive advantage form? How to define this concept? What dimensions
can be divided in this concept? These questions need to be answered in management practice, Construction of
and they are also topics that need to be studied in the theoretical community. structural
The concept of organizational human capital competitive advantage has been put forward
in the process of exploring how organizational human capital is transformed into a
dimensions of
competitive advantage. It is believed that is vital to clarify the formation process of OHCCA OHCCA
(organizational human capital competitive advantage abbreviated form of a name OHCCA)
and define the concept, connotation and structural dimensions of it in an increasingly
complex, volatile and uncertain competitive environment. This not only benefit to make clear 1083
in the current fuzzy cognition of OHCCA theoretically and enrich the theory of human capital
but also guide enterprises to take the emphasis on the strategic planning, human capital
investment and output in management practice. It will promote the improvement of the
overall organizational competitive advantage and achieve the goal of sustainable
development on the basis of creating OHCCA.

2. Literature review
2.1 Relationship between organizational human capital and competitive advantage
2.1.1 Individual and organizational human capital. Schultz (1960) originally proposed the
human capital concept, which has gradually developed into a more systematic theoretical
framework (Becker, 1964). Subsequently, numerous studies have been conducted mainly
from the perspective of economics and psychology. Human capital was considered a concept
that corresponds to physical capital and existence of individuals for achieving future returns
(Barney and Muhanna, 2004). Since the 1990s, research on human capital theory has
expanded into management as knowledge capital theory developed.
Hence, the understanding and interpretation of this concept has also been enriched from
individual to unit, team and organizational levels. Individual human capital is defined as the
sum of workers’ knowledge, skills, abilities and other characteristics (KSAOs) accumulated
through education, training, health care, labor migration and employment information
(Vodenko and Lyausheva, 2020). Necula (2020) believes that the components of human capital
include: educational capital (skills learned from schools, supplementary training and so on);
biological capital (capabilities gained from personal physical conditions). Ployhart and
Moliterno (2011) believe that individual human capital refers to individuals who have
obtained KSAOs through investments in self and others, such as family, friends,
organizations and society. Human capital can be regarded as the economic value of
employees or their capabilities generate to organizations. Dermol (2019) has researched that
employees’ education, professional experience and skills can bring value to the organization.
Therefore, it can be searched from individual and unit levels (teams, departments or
organization) to analyze the value to bring about by human capital. Individual-level human
capital is considered to be the decisive factor in themselves’ career development.
Ployhart and Moliterno (2011) analyzed individual KSAO content to examine whether they
can be recognized as a general or specific standard. Cognizable KSAOs include general
cognitive abilities, knowledge, skills and experiences. Most micro-studies focus on general
cognitive ability because it is the strongest predictor of education background, success, job
performance, promotion and salary (Bruns et al., 2008; Claver-Cortes, 2015; Au et al., 2008;
Shane, 2000). Learning ability and absorptive capacity of employees are also important sources
of sustainable competitive advantage, which can encourage companies to maintain a certain
update trend, obtain public knowledge and develop in response to the needs of a dynamic
environment (Eklund, 2020). In contrast, unrecognized KSAOs include personalities, values
and interests (Mincer, 1970). Cognitive abilities, personalities, values and interests can be
regarded as general KSAOs because they are relatively stable and long-lasting in terms of time
and situation and are usually the determinants of performance (Ployhart and Moliterno, 2001;
JIC Bingley and Westergaard Nielsen, 2004). However, skills, knowledge and experience are
23,5 divided based on the application field. For example, social skills are general, whereas handling
a business case in a particular company is specific. Therefore, previous studies claiming that all
human capital types are the same are misleading. Human capital should be defined according
to different content (cognizable vs unrecognizable) and applicability (general vs specific human
capital).
Coleman (1990) emphasized the importance of human capital accumulation and believed
1084 that human capital comprises individuals’ valuable skills and knowledge accumulated over
time. Human capital is essential to the sustainable development of organizations, but the
existing research is not enough to prove how human capital affects organizational behavior
and organizational results. Sun et al. (2020) believe that the learning ability of employees will
affect the innovation performance of enterprises, and the organizational environment has a
more profound impact on this dimension. The allocation of it also plays a vital role in the
development of enterprises especially in the cultivate talents’ innovation capabilities
(Dermol, 2019).
Organizational human capital (also known as human capital resource) is the sum of
individual human capital elements in a specific situation. For example, Subramaniam and
Youndt (2005) believed that organizational human capital refers to the sum of employees’
knowledge, ability and motivation. This research method discusses the simple summation of
individual human capital regardless of the interaction between human capital and various
organizational elements. Resources and capitals configuration should consider internal and
external environments such as the organization status and industry development (Bentley
and Kehoe, 2020).
Macro-level human capital is often based on micro-level human capital. Scholars classify
individual human capital according to organizational level and value characteristics of
organizations’ subordinates. From the organization-level perspective, individual human
capital is divided into directors, entrepreneurs and managers’ human capital, among others
(Wright et al., 2001; Johnson et al., 2013; Ren and Wang, 2011). In contrast, from the value
characteristic perspective, general, specific-task and firm-specific organizational human
capitals exist (Au et al., 2008; Bruns et al., 2008). Ployhart and Moliterno (2011) proposing that
organizational human capital originated from various KSAOs by expanded precede
researchers’ results (Wright et al., 2001). It can be regarded as the individual-level human
capital transformed into organizational human capital and exert effort to the operation and
innovation of company (Wang and Zatzick, 2019).
In addition, many scholars have defined and studied human capital in macro-level specific
units. For example, Chillemi and Gui (1997) studied specific human capital in a team and
revealed that the human capital is an intangible asset developed by team members. Human
capital resources are based on individuals’ capabilities or KSAOs related to organizational
goals (Ployhart et al., 2014). Individual-level human capital is the fountainhead of
organizational human capital or human capital resources pool as the existence of human
capital relies on the physics of employees. However, the decisive factors that effect on the
establishment of individual human capital and human capital resources are different.
Antecedent variables of the former are mainly genetic, human environment, personal
willingness while the latter is essentially context. Organizational human capital is not a
consolidation of individual human capital in the organization talent pool. Which can be
regarding the organizational level resources transformation from the accumulation of
individual human capital. It is essential to ensure that the specific decisive factors and context
effect on the transformation process of unit level resources to organizational human capital.
Robert and Thomas (2011) believe that the driving process of human capital resources is
composed of two interrelated parts. First is the complexity of the organizational work
environment or the degree of interdependence and coordination among members of
organizational requirements complement of tasks. Second is the driving state which is Construction of
included in the organizational behavioral process, cognitive situation and emotional state structural
that indicated how the organization members are acting, thinking and perceiving. These two
parts are interrelated and affect each other in the organizational human capital
dimensions of
transformation process. OHCCA
In addition, the generation of human capital resources will also be affected by other factors
such as organizational support, personal-organizational fit and so on. Managers can utilize
organizational support (work support, interest care and value recognition) to promote 1085
employee value recognition and improve professional commitment thereby enhancing
employee job satisfaction to reduce turnover and promote the transformation of individual
human capital into the organizational (John and Bhave, 2011). Based on the organizational
support theory when the firm carries out organizational learning activities (including
organizational input such as training and development), it can improve human capital and
organizational competitiveness. It is also the embodiment of organizational human capital
and its formation mechanism.
In summary, proposition 1: individual human capital (whether cognizable or
unrecognizable, general and dedicated) is the source of organizational human capital or
human capital resource pool from a static perspective; the transformation of individual
human capital into organizational human capital is affected and restricted by many factors
such as individuals, organizations and the environment from a dynamic perspective.
2.1.2 Organizational human capital and competitive advantage. Human capital resources
can maintain sustainable competitive advantages through innovation, customer service
which is critical part of organizational performance improvement. In addition, the strategic
planning of an enterprise can identify and develop resources and capabilities, which is also an
important source of sustainable competitive advantage and corporate success (Kengatharan,
2019). Specific human capital (such as entrepreneurial experience) has a positive impact on
the company’s sustainable competitive advantage in some empirical researches. In particular,
new employees can provide differentiated human capital for the organization (Giones and
Miralles, 2019).
Furthermore, Wiklund and Shepherd’s (2003) empirical research showed that knowledge
resources are crucial to supporting enterprises in obtaining good organizational performance
through. Dermol (2019) has emphasized the impact of creativity and diversity on innovation
which is created by rare and different human capital of staffs.
Teece et al. (1997) proposed the dynamic capability view and held that an organization
must have the ability to dynamically integrate and reconstruct internal and external
resources, such as technology, and competitiveness to meet environmental changes and thus
obtain excess profits and establish a competitive advantage. Based on Dong et al.’s (2011)
literature review, dynamic capabilities are divided into five dimensions, namely,
environmental adaptability, organizational transformation capability, resource integration
capability, learning capability and strategic isolating mechanism.
Barney (1991) held that human capital is the key organizational strategic asset. Human
capital resources are always dynamically changes due to labor mobility, complex working
environments, nature of organizations and changes in work processes. However, work tasks
and processes have certain stability and varied content in different periods due to the nature
of most organizations. Thus, the content of organization’s human capital resources can be
determined. Ployhart and Moliterno (2011) established two propositions regarding the
content of human capital resources: (1) the content of human capital resources may be
cognizable KSAOs or unrecognizable KSAOs, which may be general specific and (2) human
capital resources and individual KSAOs are partially isomorphic.
The micro-foundation of organizational human capital comes from individual KSAOs,
whether cognizable or unrecognizable and general or specific. These organizational human
JIC capitals are not a simple collection of individual human capital. They are transformed into
23,5 organizational-level resources across layers through a driving process. This concept differs
from the single-level view of scholars at the micro and macro levels. These resources remain
in the organization and form a human capital resource pool that constitutes the foundation of
organizational core competitiveness. The resources in the pool are transformed through a
necessary and common, resulting in driving process specific and exclusive organizational
resources. Thus, organizational human capital can be divided into general and specific
1086 human capital.
General human capital includes the organization’s general cognitive ability level, overall
value orientation, general skills, knowledge and experience that can be used in ordinary
situations and other organizations. By contrast, specific human capital is relatively complex,
which includes firm-specific knowledge, skills and experience. Competitors cannot easily
imitate specific human capital due to the interaction mode among the organization’s
members, overall trust level and emotional intelligence resulting from social complexity and
causal ambiguity. For positions that requires specific human capital which is more difficult to
recruit suitable employees. But internal employees in these posts lack of general capital or
lower fitness of specific human capital in other enterprises will obstruct them resign.
Therefore, the mobility of specific capital is actually less than general capital (Brymer et al.,
2019). When organizational human capital is formed, it maintains a relatively stable state in
the organization. These resources will be deposited through the organization’s restraint
mechanism or management method, regardless of employee turnover. However, the retained
organizational human capital and individual human capital belong to company or employees
but it is not clear that the mechanism of realize the competitive advantages. Zahra and George
(2000) proposed the enterprise-level absorptive capacity model and described the process by
which companies acquire and absorb knowledge to generate sustainable competitive
advantages. However, knowledge acquisition and absorption process assumes that
organizational human capital can identify, integrate and transform external knowledge.
This process requires the development of high-quality, general, recognizable organizational
human capital stock. Moreover, organizational human capital stock will transform into a
specific source of competitive advantage through the knowledge acquisition process. The
new specific knowledge structure is preserved in organizational human capital. Therefore,
the organization’s general human capital will increase its absorptive capacity, thus
promoting specific human capital creation. Companies that have developed high-quality
general human capital stock are more likely to transform organizational human capital to
adapt to the changing environment (Teece and Pisano, 1997) and improve the organization’s
ability to flexibly transform specific human capital. Thus, the human capital from individual
and organizational levels can be transformed into the high quality of human capital stock to
attract more talents join in company and realize the cycling in positive.
Delery and Roumpi (2017) revealed that human resource practice must be regarded as an
integrated system that satisfies the condition of the resource-based view to achieve
sustainable competitive advantage. Then, human resource practice must be combined with
the external environment to establish the enterprise’s sustainable competitive advantage.
Furthermore, employees must be characterized by rarity, imitation and irreplaceability.
Talents who are possessed specific human capital can generate new ideas and creativity to
enhance company performance (Wang et al., 2019). Thus the company would utilize unique
tangible and intangible assets to gain rare and irreplaceable value based on the appropriate
human resource practice system. The fierceness of intangible assets can also benefit to
develop their unparalleled core competitiveness for the organization, thereby defeating
competitors (Singh et al., 2019). Saridakis et al. (2017) proposed that organizational
competitive advantage may come from well-designed human resource practices that match
resource-based view concepts. Individual human capital cannot be imitated easily because it
is heterogeneous, relatively unique and scarce. The impact of company’s excellent talents can Construction of
be reflected in financial indicators, which show the value of human resource practice (Barney structural
and Wright, 1998; Tims et al., 2013). Wongleedee (2020) argue that high-performance work
systems have a positive relationship with organizational results and employees’ cultivation.
dimensions of
As a system of human resource practices, the high-performance work system contributes to OHCCA
enhance the skills and work participation of employees, thereby improving work
performance subsequently. Also, other appropriate human resource management practices
or human capital investment activities would contribute to the individual, team or 1087
department, organizational human capital turned into high-quality human capital stock and
produce competitive advantage for the company.
In summary, proposition 2: the individual human capital or organizational human capital
only through the human resource management practices or human capital investment
activities to form high-quality human capital stock can it be transformed into an
organizational competitive advantage.

2.2 OHCCA formation


Ployhart and Moliterno (2011) proposed a multi-level model for human capital resource
generation. Campbell et al. (2010) constructed a competitive advantage framework based on
human capital, which provided a theoretical basis for further exploring OHCCA formation. A
review of existing literature shows that OHCCA perception has undergone a gradual process.
Wright et al. (1994) argued that the concept of organization-level human capital resources
originated from individual-level human capital resources. Ployhart and Moliterno (2011)
believed that the driving process of human capital resource generation consists of two
interrelated parts. The first part is the complexity of organization’s working environment,
that is, the degree of how much the organization requires members to rely on and coordinate
with each other. The second part is the driving state, which includes organizational behavior
process, cognitive situation and emotional state. Both parts are interrelated and influence
each other.
From a static perspective, human capital resources refer to all human capital owned by an
organization at a certain point in time. In contrast, from a dynamic perspective, human capital
resources are constantly changing. For instance, an organization’s human capital resources
decrease when an employee is dismissed. However, these resources can increase immediately,
regardless of employee turnover, by enriching knowledge, ability and experience through
training. The key issue is how to make this progressive resource unique and convert into an
organizational competitive advantage. How to stimulate the human capital to produce
competitive advantage also distinctive with competitors become vital issues in organization
industry. The transformation process of human capital to organizational competitive
advantage is an implication in the challenge background (Sun et al., 2020).
Early strategic scholars used human capital theory to emphasize the importance of
enterprise-specific human capital in creating and maintaining competitive advantage. They
advocated that investing in specific human capital significantly establishes and enhances
enterprises’ core competitiveness. Stakeholders’ governance methods for corporate-specific
human capital investments may be a synergistic and win-win approach in the long run
(Mahoney and Kor, 2015). Certain scholars have further proposed that the sum of human
capital may expand the understanding of the results of its enterprise level and how it appears
on an overall level (Ployhart and Moliterno, 2011). Moreover, other scholars have further
proposed how individuals with different human capital endowments combine to form specific
organization- or unit-level human capital resources (Ployhart et al., 2014). How employees
choose their skills and how these choices affect an organization’s potential liquidity need to be
explained (Coff and Raffiee, 2015). Therefore, understanding employee-level human capital
JIC development (and its impact) is crucial to comprehending the micro-foundation of human
23,5 capital accumulation.
Certain scholars believe that general and specific human capitals are interrelated. For
example, general human capital changes are related to individual-specific human capital
based on individual development, acquisition rate and individuals’ effective use of enterprise-
specific human capital (Ployhart and Moliterno, 2011). Other scholars have proposed the
concept of co-specificization to claim that human capital and corporate resources are co-
1088 specificized when their combination is more valuable than when they are separated (Molloy
and Barney, 2015).
Studies have shown (Molloy and Barney, 2015) that although labor market
competitiveness is an important determinant of human capital value obtained by a
company, it significantly determines employee management. Gerrard and Lockett (2018)
believed that team-specific human capital based on team members is generated during the
members’ tenure within a team, and managers significantly impart explicit knowledge to
team members and shape their tactical knowledge in diverse ways. Team-level human capital
essentially shapes the organization’s resource foundation. In enterprise management
practice, emphasis on the role of the team in human capital investment, innovation incentives
and guidance, particularly in creating OHCCA, is important in the organization level
(Alrowwad and Abualoush, 2020).
Bauer et al. (2007) believed that employees may actively seek opportunities for investing in
specific position skills as part of organizational socialization process, which would be
considered a specific organizational human capital. Crocker and Eckardt (2014) believed that
when an individual task involves direct work processes or other dependencies with
colleagues, a function-oriented unit human capital complements with individual human
capital. Individual willingness to invest in human capital and investment behavior are also
indispensable influencing factors of the OHCCA formation.
Figure 1 shows an OHCCA formation process model constructed according to Robert and
Thomas’ (2011) multi-level human capital resource generation model and the competitive
advantage framework based on human capital proposed by Benjamin et al. (2012).
Figure 1 shows that OHCCAs have three levels: individual employee, team or department
and organizational human capital. Individual-level human capital refers to individuals’
KSAOs they obtained or by others (family, friends, organization and society among others)
investments. Team or department human capital refers to the team or department’s KSAOs
obtained through effective investment and management of team members (such as team
learning and communication and training, provision of resources and platforms). These
KSAOs include those obtained by mutual learning, collaboration and innovation among team
or department members.
Organization-level human capital (human capital resource pool) refers to the
organization’s human capital investment (such as organization training, job rotation, job
promotion, team or department collaboration and provision of resources and platforms
among others). KSAOs obtained through human capital investment by the team or
department and employees are also included.
Individual human capital is the basis of team or department human capital formation,
whereas individual and team or department human capitals are also the foundation of
organizational human capital generation. These three human capital levels are not
completely affiliated and are independent in the process competitive advantage creation of
organizational human capital. The conversion of individual human capital into team or
department human capital depends not only on the individual’s willingness, professional
attitude and degree of effort but also on the team or department manager’s support, incentive,
innovation, and leadership and team members’ collaboration, knowledge sharing and
innovation skills(Singh et al., 2019). Similarly, the transformation of team or department
Human capital in Human capital in team or Human capital in organizational Construction of
individual level department level level (human capital resource pool) structural
dimensions of
OHCCA

1089

Transform Conditions:
z Strategic isolation
mechanism
z Organizational ability
to manage human
capital resource Figure 1.
OHCCA formation
OHCCA
process model

human capital into organizational human capital depends on leaders’ strategic planning and
collective leadership, the organization’s human resource policy and human capital
investment, and teams or departments’ coordination and cooperation in providing
individuals with career development resources, platforms and environment. Employees
will tend to initiative and innovate in their position to enhance work performance when they
feel the organizational investment on their careers (Usai et al., 2020). Therefore, OHCCA
formation is closely related to these three human capital levels. As independent human
capital, the three levels do not only exert unique resource advantages, initiative and creativity
but also influence, collaborate, cooperate and share with each other to jointly exert
advantages and roles in OHCCA formation.
However, competitive advantage creation through organizational human capital
resources is affected and constrained by factors such as organizational strategic isolating
mechanism and management ability. Thus, the organization should select and allocate
human capital reasonably and effectively and adjust management behaviors through human
resource management practices according to the organization’s internal and external
environmental changes. Therefore, organizational human capital application could be
maximized and thus help the organization achieve sustainable competitive advantage.
In summary, proposition 3: the formation of organizational human capital competitive
advantage is the result of investment and interaction of human capital at the individual level,
team or department level, organizational level and are influenced and restriction of
transformation conditions such as organizational strategic isolation mechanisms and
abilities to management human capital resources.

3. OHCCA structural dimension


3.1 Research methods and data collection
The study collects second-hand data by reviewing and sorting out the literature. The
interview outline is designed after identifying the basic research questions, and semi-
JIC structured interviews are used to collect first-hand data. In the qualitative research, samples
23,5 are selected strategically and systematically. As the current understanding of OHCCA in the
industry is not comprehensive, grounded theory is used in this situation (Glaser and Strauss,
1965). First, original data are collected to inductively derive a final theoretical dimension
through open, spindle and selective coding until a theoretical saturation is reached. The
application of grounded theory can help explore the influencing factors of OHCCA, define its
core concepts and clarify category relationship breakthrough of traditional research ideas of
1090 human capital and sustainable competitive advantage.
The literature review mainly selects five databases worldwide. China National Knowledge
Infrastructure (CNKI) and Renmin University of China Press Information Center for Social
Sciences are selected to present Chinese database, whereas EBSCO Information Services
(EBSCO), Wiley and Emerald are selected as English databases. Keywords human capital,
organizational human capital, employee or individual human capital and firm human capital
are used in searches. The final retrieval contains 569 literature, of which 203 and 366 are
English and Chinese materials, respectively. From these literature, 456 documents (including
163 and 293 Chinese and English documents, respectively) and 113 documents (40 and 73
English and Chinese literature, respectively) are used for open coding and reserved for
theoretical saturation test, respectively.
The interview is mainly referred to the resource-based view of competitive advantage, and
existing research results of organizational human capital are used to formulate the outline.
Then, we conduct face-to-face and telephone interviews to collect first-hand information.
Interview questions include, “How has your company created a competitive advantage in
human capital?”; “What measures have been taken to enable talents to exert their
advantages?”; “What type of employees are invested in more effectively?”; “What actions
have the company established for employees’ professional development?”; “What is the role
of the team in creating OHCCAs?”; and “How do department managers motivate employees to
create good performance?” Other content of the interview involves employees’ individual
learning and investment initiatives among others. Theoretical sampling method is used to
select interviewees from the position of company chairperson, general manager or deputy
general manager and human resource director with a certain understanding of organizational
development strategy, human capital investment and OHCCA among others. As a result, 20
respondents were interviewed. Interviewees mainly are strategic or human resource
managers relate to our research topic have deep knowledge about the enterprise human
capital regulations, implementation plans with professional theoretical support. The
interviewed enterprises comprise 10 technology and manufacturing enterprises (including
state-owned, private and foreign-funded enterprises) because these two types of industries
have advantages in OHCCA construction in terms of typicality and representativeness. We
selected interviewed companies based on their influence and strong performance in the
industry. In addition, we have acquainted with people within the companies. Table 1 shows
the profiles of interviewed enterprise.
Owing to OHCCA is vital to technology and manufacturing companies’ based on
innovation and leading technology origins from former to enhance performance and maintain
sustainability development of organizations to a large extent. Innovation can encounter the
uncertainty environment achieves sustainable development by cultivating competitive
advantage of enterprises to maintain a leading position in the industry (Sun et al., 2020; Wang
et al., 2019). Therefore, organizations need to develop innovative activities to cultivate their
own competitive advantages and achieve performance growth by the integrated capabilities
in capitals and resources (Hou et al., 2019). The human capital acquisition and transformation
of OHCCA could be observed and examined obviously as their talents are critical in their
operation. These are reasons why we choose managers from technology and manufacturing
organizations to interview. The interview time span was approximately 20–60 minutes and
No Organization Profile Construction of
structural
1 Jilin General Machinery Jilin General Machinery (Group) was founded in 1965 and now has 5
(Group) industrial parks with estimate 2000 employees. It has 20 branches
dimensions of
(subsidiaries) and joint venture companies, holding 2 companies in OHCCA
Europe, and establishing a wholly-owned R&D center in Germany.
Organization strengthens opening-up and innovation especially in
industrial transformation and management mechanism to enhance 1091
corporate vitality
2 CRRC Corporation Limited CRRC Corporation Limited is a world-leading rail transit equipment
supplier with a complete range of products and first-class technology.
There are currently estimate 190,000 employees. Firm’s technological
innovation work obeys and serves goals of transnational operations and
global leadership
3 DHI DCW Group DHI DCW Group has a headquarters, five bases, and currently employees
more than 10,000 people. It is mainly provides complete sets of technical
equipment, high-tech products and services for the basic industries. This
organization has effectively combined with the strengthening of
enterprise management and realized system and mechanism innovation
in reorganization
4 Hengrui Technology Hengrui Technology Limited is engaged in R&D of mechanical and
Limited electrical equipment and related technical consulting services;
mechanical and electrical equipment installation and on-site
maintenance. The organization has a strong sense of innovation in
technology with more than 1000 employees currently
5 Apti Optical Apti Optical Communications was incorporated in 2001, the number of
Communications employees is more than 500. The company mainly produces and supplies
optical fiber connection accessories and assembly products. It has
advantages of knowledge, technology and experience in the precision
processing, connection plug production and so on
6 China Shipbuilding China Shipbuilding Industry Group was established on July 1, 1999
Industry Group which mainly engaged in R&D and production of marine equipment,
power and electromechanical equipment, strategic emerging and
productive modern service industries. It has 46 industrial enterprises, 28
scientific research institutes, and 140,000 employees. In addition,
corporation earnestly performs various functions and continuously
develops and strengthens the core competitiveness to leading industrial
innovation
7 Brilliance Auto Brilliance Auto is a key state-owned enterprise which has 6 vehicle, 2
engine and several parts manufacturers and currently employs 47,000
people. In the future, Brilliance Auto will persist in reform and
innovation, open cooperation, focus on the main business, achieve
corporate transformation and upgrade
8 Coret Software Group Coret Software Group was established in 2008 and has developed with
more than ten subsidiaries and established multiple R&D and production
service centers, the number of employees is estimate 500. The company
has taken technological innovation as its core driving force and formed
strategic partnerships with many software companies
9 Timken Timken was listed on the New York Stock Exchange in 1922. Total global
employees about 17,000, with 187 facilities which covering 28 countries
and regions around the world. The company’s main businesses are
aviation, construction, medical, heavy industry, machine tools, consumer
goods, energy and so on
10 JD Digital Technology JD Digital Technology is a comprehensive online retailer established in
1998. It is one of the most popular and influential e-commerce websites in
China and the total number of employees has exceeded 20,000. JD Digital
Technology firmly believes that innovation is the principle of company Table 1.
development and talents can promote it Profiles of enterprises
JIC recorded with notes and sounds in the consent of the interviewees. Interview time depends on
23,5 interviewees’ position, status, work reciprocity and relevance with our interview outline. As
the result of senior managers would predominate more macro-human resource information
than first-line administrator. We will arrange about 60 minutes interviews with them for
obtaining enough materials. For other managers who hold less data about the human capital
plans and applicable methods, we would interview with them estimate 20–40 minutes to save
our time. Specific range of interview time influenced by the situation at that time includes of
1092 interviewees’ answers, feedbacks and values to our research. After the interview, 20
recordings and notes were obtained, of which 16 were randomly selected for coding, and 4
were reserved for theoretical saturation test. The coding utilized high-frequency academic
words to describe the OHCCA concept and revise its controversial part according to experts’
opinions. Table 1 shows the basic situation of the interviewed enterprises and employees.

3.2 Category refinement and concept determination


3.2.1 Open coding. Open coding is a conceptualization and categorization process that
scatters, codes and labels the analysis results of the original literature and interview data
(Table 2). It is the first step of grounded theory coding, which aims to highlight the most
primitive data, name them in their natural state and then categorize them to ensure objective
coding results. The first step of open coding is to refine and specify any borrowed extant

Interview duration
No Organization Department Interviewee (minutes)

1 Jilin General Machinery Manager Office Chairman 60


(Group) Manager Office Deputy General 25
Manager
International Marketing Minister 20
Department
HR Office Director 20
2 CRRC Corporation Limited Quality Assurance Minister 40
Department
HR Department Deputy Minister 50
Organization Department Minister 20
Manager Office General manager 20
3 DHI DCW Group HR Department Minister 40
Enterprise Management Minister 20
Department
4 Hengrui Technology HR Department Manager 30
Limited
5 Apti Optical HR Department Manager 40
Communications
6 China Shipbuilding HR Department Deputy Minister 40
Industry Group Painting Company Manager 30
7 Brilliance Auto HR Department Manager 30
Manager Office Deputy General 20
Manager
8 Coret Software Group HR Department Manager 30
Table 2. 9 Timken Manager Office General manager 20
Statistics of 10 JD Digital Technology Talent Development Manager 30
background of Department
enterprises and the HR Department Director 20
interviewees Total 10 20 20 605
concepts. The research coding utilizes NVivo 11 to manage data. It will mark the initial Construction of
concepts and categories through free nodes and tree nodes to gradually clarify the structural
relationships between concepts and analysis structures. The original words of the
interviewees are directly extracted as labels and categories are refined to a relevant degree
dimensions of
to reduce errors and avoid the influence of researchers’ subjective opinions on coding. A total OHCCA
of 814 original sentences in the open coding are sorted out by literature review, and interviews
are analyzed by coding to form an initial concept. Finally, 11 conceptual categories are
abstracted: human resource planning, resource and platform provision, welfare and 1093
environment, training and development, team learning and knowledge sharing,
personalized management, innovation incentives, teamwork, initiative personality, high-
quality general human capital and specific human capital.
During the coding process, divergences in category classification achieved consensus
through experts’ comment and discussion. Ideologically duplicated and vague categories
have been merged and redefined after referring to the opinions of seven scholars and six
experts.
Scholars are generally more knowledgeable which are mainly referring to people who
have a certain level of knowledge and can express ideas and put forward opinions in related
fields. Experts are more proficient in a certain profession or technology who are specialized in
skills or comprehensive professional knowledge in academics and so on. Especially, they are
proficient in a certain discipline or skill with higher attainments than scholars. Seven scholars
in this research mainly refer to graduate students in the fields of organizational behavior and
human resource management, and corporate strategic orientation. They have certain
knowledge in the field of organizational behavior and can put forward certain feasible
suggestions for the subject studied by the author. Six experts in this research refer to
organization managers in the research direction of organizational behavior and human
resources who have many years of research experience in this domain and have more
professional, in-depth, authority research on human capital and business management.
Actually, six experts are all companies human resource manager, of which only two experts
are from the interviewed company. We have mentioned experts in other parts not belong to
one group of this part but author belongs to the category of it. Delphi was mainly used to
provide highly reliable analytical results.
Then, eight categories were finally summarized: human resource allocation, resources and
development platform, training and development, learning and knowledge sharing,
innovation incentives, teamwork, general human capital stock and specific human capital
stock. Three sub-categories were either merged or deleted: welfare and environment,
personalized management and initiative personality. Table 3 shows the specific concepts of
each category.
3.2.2 Axial coding. The concepts and categories of open coding are summarized and coded.
However, the relationship between various factors has no correlation because the open coding
of original data aimed at maintaining objectivity. The Axial coding is to further refine the
main category based on open coding results to establish the relationship between each
category and concept and conduct an in-depth analysis of the main category. In this process,
the organization analyzes, summarizes and organizes the above abstract conceptual
categories based on open coding results and connects independent concepts by comparing
the relationships. Therefore, the organization summarizes the above abstract conceptual
categories based on open coding results. Moreover, the organization summarizes the
comparison and classification of eight existing categories based on the original interviews,
literature, and attributes according to the similarity of the content. The eight categories are
summarized into three main categories of human capital investment: planning, practice and
stock (see Table 4).
JIC Category Original statement (initial concept)
23,5
Human resource allocation A1 Our company have made five-year plan and correspondingly made human
resource plan that matched
A8 The organizational rank structure are designed according to the
company’s strategic positioning
Resources and Development A2 At present, we have reasonable compensation system for employees in
1094 Platform terms of human capital’s competitive advantage and also provide a
professional channel for expert talent policy. In a word, technical
management has its own expert management and talent system
A7 We intend to increase the salary gap and adjust the rank structure
according to the current status of the company
Training and Development A1 We also have successor plans and combine the competency model of the
position to develop different training courses based on it
A2 There are suitable training and standardized factory management
Learning and knowledge A1 Experienced staffs can be appointed to be a team leader or give out
sharing suggestions to the team. There is a certain amount of new comer every year to
achieve human capital increment
A8 Leaders also communicate with employees about management and
presentation skills frequently
Innovation incentives A1 It needs to be explicit in terms of hiring candidates and incentive methods
in organization. The heads of each department behave distinctly. Some heads
of departments are better at material incentives for employee performance
and innovation. But from the non-company level, he will offer these small
incentives in their department, and then give some small rewards for example.
And then some departments may like to strive employee to earn such
evaluations
A8 There are many ways to keep senior managers in company such as stock
incentives, long-term incentives or restricted stocks. For employee innovation,
you can also determine the level of incentives according to the salary level
Teamwork A5 The role of the team department in diverse aspects is actually greater than
the organization, because any decision of the company must be carried out
through a department or a team. If an excellent team manager arranged some
activities such as team building, cooperation and management, their
teamwork will exert more effort in team level than organization level
A1 Since a team has set a goal and the team will be rewarded once the goal is
achieved. The team manager will fight for his employees through getting
everyone work hard towards the same direction. For other department heads
with personal charm, they could utilize brilliant business ability to drive
everyone corporate and finish the work
General human capital stock A7 Group will spend a certain amount of money every year to invest in these
domestic universities with optical communication major. We could attract
students in the form of sponsorship before they graduate. That is, we have
arranged school recruitment early to attract our target students, which could
efficiently bring more outstanding fresh graduates to join the company
A5 Basically everyone is studying for MBA and EMBA in Dalian University
of Technology within the HR range surround us. The technical people are also
preparing for examination of project management certification. They are
expanding and deepening their career paths by initiate study
Specific human capital stock A5 It is more important for our software department to convert our R & D
achievements, and its core proportion has already exceeded 50%. This
department talents also have specific skills and learning initiatives
A9 We have designed projects such as nuclear power. At the training cost of
Table 3. estimated 280,000 yuan per person, we arranged a dozen of people to study for
Categories formed by two months in the United States to solve the problem of combining with the
open coding market and products
3.2.3 Selective coding. The three-level coding mainly clarifies the core category based on Construction of
the Axial coding and verifies the remaining categories. Selective coding mainly summarizes structural
the core category based on Axial coding and clarifies the core and main categories and the
relationship between core categories to establish the structural model. The core categories are
dimensions of
analyzed to summarize the connections between the categories. The three summarized main OHCCA

1095
Main category Category Interpretation

Human capital Human resource According to the goals of the overall development
investment planning allocation strategy of the enterprise, establishment the provisions
of the policies and strategies for the development and
utilization of human resources of the enterprise include
the design and adjustment of the organizational
structure, the balance plan of supply and demand of
human resources and the position settings
Resource and The organization provides various resources, salary,
Development Platform benefits, environment, development platform for
employees to cultivate and maintain competitive
advantage
Training and The organization enhances employees’ ability,
development knowledge level and potential through learning and
training and maximizes the matching of employees’
personal qualities with work needs so that they can
demonstrate higher performance
Human capital Learning and The efficient operation of the organization is achieved
investment practice knowledge sharing through joint learning based on the unity of individual
interests and overall interests to enhance corporate
cohesion; the knowledge sharing is a process of
knowledge management. The enterprise continuously
develops knowledge by establishing a specific
knowledge system, also employees can make progress
together and finally promote the rapid development of
the enterprise by sharing knowledge with others
Innovation incentives By personalized talent incentive mechanism, competitive
salary system, smooth promotion channel, encourage
innovation, tolerate a failed innovation environment and
cultural atmosphere to fully mobilize the enthusiasm of
innovative talents, inspire and maintain employees’
passion for innovation and enthusiasm
Teamwork The centripetal force of the organization is improved by
team’s spirit of cooperation and concerted effort which
displayed when completing a formulated event
Human capital General human capital The organization possesses relatively stable and durable
investment stock stock general knowledge, skills, abilities and other
characteristics (KSAOS) that are obtained by employee’s
own and others (family, team, organization, society and
so on) investing in the themselves’ human capital and
match the requirements of the employee’s job
responsibilities
Specific human capital The sum of professional knowledge and skills
stock capabilities and other characteristics (KSAOS) required
by the organization to complete the specific functions or
business of the enterprise which are obtained by the
employee and others (family, team, organization, society Table 4.
and so on) investment on staff Axial coding results
JIC categories were analyzed along with their comparison and selective coding. As a result, the
23,5 core OHCCA category was comprehensively extracted, and the relationship of the structural
model between the main and core categories was also constructed, as shown in Table 5.
3.2.4 Theoretical saturation test. Theoretical saturation test not only checks whether the
research results obtained by grounded theory are comprehensive but also determines
whether the original data collection and analysis have reached saturation. If no new concepts
or categories are found, then the theory has reached saturation in the process of collecting and
1096 analyzing data, and the original data analysis can be stopped.
In this study, 20% of the original data are used for theoretical saturation test, whereas
analysis and sorting are performed after the category is divided. Finally, the remaining 113
documents and 4 interview records were recoded, whereas no new concepts and categories
were found. The main categories and sub-categories are accurate and have good theoretical
saturation. Thus, sampling and coding are terminated. It can be inferred that the construction
of the OHCCA structure dimension has previously reached theoretical saturation. The
author’s OHCCA data collection has satisfied the conditions of grounded theory which can
sufficiently support the division of main categories and others in this study.

4. Interpretation of OHCCA structural dimension


Using the grounded analysis, eight categories, three main categories and one core category,
namely, OHCCA, are extracted based on the three-level coding. Based on the OHCCA
formation process and theoretical analysis results, OHCCA’s core category is defined as the
general and specific human capital stocks. These human capital stocks constitute an
organization’s unique and thus unreproducible competitive advantage that is distinguished
from those of other organizations. OHCCA is composed of three dimensions of human capital
investment: planning, practice and stock. Figure 2 shows its structural dimensional model.

Typical relationship structure The connotation of the relationship structure

Behavior subject-Behavior willingness- Firstly, the organization’s behavior subject (teams or


Behavior practice-Behavior result departments, employees) has the willingness to obtain the
competitive advantage of human capital which will form a
human capital investment plan based on the organizational
strategic framework. To obtain the competitive advantage of
human capital in an organization is also the causal condition or
basis to acquire human capital competitive advantage. The
organization will take action strategies according to the
human capital investment plan to implement which shows a
manifestation of behavioral practice. Effective human capital
investment will obtain the human capital stock
Behavior subject-Behavior willingness: Investment planning is a basic condition for increasing human
Human Capital Investment Planning capital which is benefit to efficient and targeted investment on
it. It is a prerequisite and basis for forming OHCCA

Behavior willingness-Behavior practice: Implementing the organizational human capital investment
Human Capital Investment Practice according to the plan which is an action strategy that
transforms the organizational human capital into the OHCCA

Table 5. Behavioral Practice-Behavioral Result: The result of human capital investment is a concrete
Typical relationship Human Capital Investment Stock manifestation of the OHCCA. It is the most valuable asset and
structure of main the key element for the organization to create a sustainable
categories competitive advantage
4.1 Human capital investment planning Construction of
Human capital investment planning refers to organizing and managing human capital structural
investment, allocating human resource training, and developing human resource, and
constructing resource and platform based on overall organizational development strategy
dimensions of
and human resource strategy. It is the basis of an organization in gaining OHCCA. Human OHCCA
capital investment plan would promote entrepreneurs discover opportunities, establish
innovation foundations, confront market uncertainty and adapt to the needs of stakeholders.
Empirical research suggests that there is a positive correlation between human capital and 1097
corporate innovation. The investment plan would conduce to bring about more human
capital and transform into OHCCA to enhance innovation capabilities (Hogendoorn
et al., 2019).
Enterprise human capital investment can improve employees’ quality and enterprise
management capabilities. Moreover, as part of enterprise management activities, human
capital investment activities can enhance the enterprise management performance by
making it more strategic, motivating and standardized to further improve the enterprise
economic performance.
For example, Jilin General Machinery’s (Group) deputy general manager said, “The
company’s chairman should think about development at least 5 years in the future. We need
to do is to lay a solid foundation, improve management, introduce talents, and cultivate
talents.” Jilin General Machinery (Group) has formed a special force, formulated a school–
enterprise cooperation training technical talent system and established a three-level training
system and high-level talent development system among others. It annually recruits college
graduates (junior colleges, undergraduates, and graduate students) and builds a complete
talent team gradually. The company also hires consultants and users for training and
requires every employee to perform a career plan.
Companies with certain competitive advantages in the same industry have long-term
human capital investment plans based on survey. For example, the Huawei Basic Law states
that “serious, responsible and managing effective employees are Huawei’s greatest assets”;
“we emphasize that the goal of continuously increasing the value of human capital takes
precedence over the financial capital.” Huawei has specifically focused on corporate human
capital investment planning, particularly human investment.

4.2 Human capital investment practice


Human capital investment practice refers to a series of organizational human capital
investment activities based on planning. The activities include learning, knowledge sharing,
talent incentive mechanism and teamwork among others. As the result of the heterogeneity of
human capital, the novel knowledge, skills and abilities brought by new employees can also
generate to formulate competitive advantages. New staffs’ minds interrelated to the
company’s existing knowledge which can improve the organization’s development process

Human capital
investment stock

Human capital
investment practice

Human
capital Figure 2.
investment Dimension model of
planning OHCCA structure
JIC and results. It also contributes to the organization understands outside ideas faster and
23,5 adapts to the dynamic environment (Vodenko and Lyausheva, 2020). However, new
employees will inevitably compete with senior staffs for scarce resources such as promotion
opportunities and greater power. It is essential that pays attention to the cooperation among
the new comers and seniors. The establishment of trust, participation information sharing
platform could enhance mutual exchanges and innovation ideas (Wang and Zatzick, 2019).
Individuals investments in firm-specific knowledge and skills will also contribute to
1098 development of some generic skills as a coproduct (Morris et al., 2010), such as project
management, team building, social skills and general task-based or functional expertise. The
heterogeneity of human capital could arise potential competitive advantages in organizations
which also determine unique competitive advantages of enterprises establishment. From the
perspective of competitive advantage, an organization has a series of unique resources could
integrate and configuring to enhance financial and technology performances (Sun et al., 2020).
Jilin General Machinery (Group)’s special forces and Huawei’s blue army of are examples
of human capital investment practices. Jilin General Machinery (Group)’s special forces are
specific teams composed of employees with various proficient labor skills and abilities of
emergency response. All branches, subsidiaries and workshop units are required to have
their special forces to ensure the presence of composite talents in every position. Special force
members possess specific abilities and are individually trained and nurtured. Huawei’s blue
army is a department that plays the role of imaginary enemies in military simulation
confrontation exercises. The opponents’ combat characteristics are mimicked, and targeted
training with the red army (representing the frontal forces) is conducted. As a result, capable
scientific and technological talents are selected to form the main function of the blue army
staff that adopt reverse thinking and observe organizational strategy and technological
development from different perspectives. Hence, problems in the red army strategy/products/
solutions are determined and the opponent’s strategy is stimulated to counter the red army.
The blue army’s critical thinking and the spare-tire plan not only cultivated several scientific
and technological talents for Huawei but also contributed to technological innovation and
self-reliance in difficult times.
Organizational human capital investment practice can effectively improve the
organization’s resource management ability, thereby creating a sustainable competitive
advantage.

4.3 Human capital investment stock


Human capital investment stock is the actual result obtained from human capital investment
and operation, including workers’ knowledge, skills and health. Organizational human
capital investment results in general and specific human capital stock. It can reflect on the
company’s management ability such as the human resource management practice in diverse
human capital. The knowledge, ability and experience possessed by employees are strategic
assets for the long-term development of an organization, which can be transformed into
OHCCA by certain investment plans and measures (Alimuddin and Alimuddin, 2020).
However, due to the specific human capital stock’s contained characteristics, such as
unique value, scarcity and difficulty in imitation, organizational core competitiveness
inevitably reduces when employees with specific human capital are dismissed. The re-
acquisition of these dismissed employees is more challenging than that of employees with
general human capital. Therefore, maintaining and improving specific human capital stock is
an important organizational task for obtaining OHCCA. For example, all the 10 companies
interviewed focused on general human capital stock and highly valued specific human capital
stock. CRRC Corporation Limited has established an expert talent development system for
professional talents. General talents and experts are set to three and four levels, namely, A, B,
and C and A, B, C, and chief expert, respectively. Each level has an evaluation standard and Construction of
salary treatment conducted every two years based on the performance to evaluate or structural
promote. DHI DCW Group has established five categories of human capital with 17-level skill
masters for workers. This categorization enables the company to declare the title of master
dimensions of
technicians based on the starting requirements of each indicator level. Hence, the company OHCCA
can have a stable team of skilled workers and promote the improvement of technological
innovation capabilities. Innovation is one of the most important factors for the survival and
development of an enterprise, but there are also various obstacles such as fuzzy innovation 1099
routes, tight timeliness and changes circumstances. Exploration of the OHCCA can improve
strategies and resolve difficulties in uncertainty situations in multilevel background (Wang
et al., 2019). Huawei also emphasizes specific human capital investment, which has attracted
700 mathematics experts, 800 physics experts, 120 chemical experts, approximately 6000
basic research experts, and more than 60,000 engineers working on the frontline of
technology research and development (R&D). Therefore, these specific human capital stocks
have enabled Huawei to create OHCCA in 5G and other fields through huge R&D system and
capabilities.

5. Discussion and conclusion


5.1 Discussion
5.1.1 Factors that effect and restrict the transformation of individual human capital into
organizational human capital. The consensus of existing research on human capital is that
organizational human capital originates from a series of various individual KSAOs (Robert
and Thomas, 2011) but a basis combination of individual human capital. Human capital
resources are a form of capital that relies on individual human capital and surpasses it which
is integrated human capital (Zhao, 2011). Robert and Thomas further found that the driving
process of human capital resources is composed of two interrelated parts: the complexity of
the organizational work environment and the driving state which are interrelated and
influence each other. In addition, high-performance work systems, internal organizational
environment and leadership style will have an impact on human capital at the organizational
level. Therefore, this article proposes that individual human capital is affected and restricted
by individual factors, organizational factors, environmental factors and many other factors in
the process of transforming individual human capital into organizational human capital
based on a dynamic perspective.
5.1.2 The relationship between organizational human capital investment, OHCCA and
organizational competitive advantage. Zahra and George (2000) proposed the enterprise-level
absorptive capacity model and described the process by which companies acquire and absorb
knowledge to generate sustainable competitive advantages. However, knowledge acquisition
and absorption process assumed that organizational human capital can identify, integrate
and transform external knowledge. This process requires the development of high-quality,
general, recognizable organizational human capital stock. Moreover, organizational human
capital stock will transform into a specific source of competitive advantage through the
knowledge acquisition process. The new specific knowledge structure is preserved in
organizational human capital. Therefore, the organization’s general human capital will
increase its absorptive capacity, thus promoting specific human capital creation. Companies
that have developed high-quality general human capital stock are more likely to transform
organizational human capital to adapt to the changing environment (Teece and Pisano, 1997)
and improve the organization’s ability to flexibly transform specific human capital.
Organizational human capital or human capital resources belong to the theoretical
category of the resource-based view when exploring the source of an organizational
competitive advantage. Organizational human capital investment planning and practice
JIC activities can enhance employees’ individual knowledge and skills and increase
23,5 organizational human capital investment stock, which helps OHCCA establishment. Thus,
mutual human capital resource transformation of the employee and organizational levels and
achievement of mutual growth are realized (Hatch and Dyer, 2004).
Organizational competitive advantage refers to certain characteristics that distinguish
and exceed competitors. These characteristics include resource advantages, such as
organizational manpower, material resources, financial resources, information, technology,
1100 culture, brand, image, environment and location. Organizational competitive advantage
originates from organizational core resources and capabilities (Prahalad and Hamel, 1990).
Some scholars have suggested that companies that can effectively learn, absorb and combine
knowledge are more likely to obtain sustainable competitive advantages (Dyer and Singh,
1998). The fundamental difference between OHCCA and competitive advantage is that
OHCCA is an important part of competitive advantage and is the basis and prerequisite for an
organization to gain competitive advantage. If an organization does not have OHCCA, then
other competitive advantages cannot be sustained. These competitive advantages require
human capital to acquire, inherit and development. In addition, human capital differs from
physical capital because it is invisible, scarce and difficult to be imitated. Therefore, OHCCA
is more sustainable and has long-term developmental than organizational physical capital
competitive advantage from the resource-based view. Thus, organizational human capital
investment is particularly significant as it benefits to building long-term and stable OHCCA.
5.1.3 Theoretical and practical significance. Existing strategic theories believe that human
capital can be a source of sustainable competitive advantage. Despite the roles of general
human capital and specific human capital are different in terms of competitive advantage
also there are some gaps between micro and macro researchers (Nyberg and Wright, 2015).
Which has reached a consensus that both general and specific human capital can constitute
an organizational competitive advantage as the in-depth research. In theoretical field, they
have separated organizational human capital from competitive advantage and regarded
former as latter. This research believes that organizational human capital is not an
organizational competitive advantage from a static perspective. Which only through certain
transformation conditions can it constitute an organizational competitive advantage. This
research puts forward three hypotheses based on existing research, that is, individual human
capital is affected and restricted by individual factors, organizational factors, environmental
factors and many other factors in the process of transforming individual human capital into
organizational human capital; The individual human capital or organizational human capital
only through the human resource management practices or human capital investment
activities to form high-quality human capital stock can it be transformed into an
organizational competitive advantage. The formation of organizational human capital
competitive advantage is the result of investment and interaction of human capital at the
individual level, team or department level, organizational level, and are influenced and
restriction of transformation conditions such as organizational strategic isolation
mechanisms and abilities to management human capital resources. Study emphasis on the
role of employees, team or department managers and organizational leaders in OHCCA
formation must not be neglected as they complement each other; the concept of OHCCA was
proposed and defined for the first time. In order to make the connotation of this new concept
clearer, grounded theory method was used to construct an OHCCA structural dimensional
model which includes three dimensions of organizational human capital investment
planning, human capital investment practice and human capital investment stock also
explained various dimensions and their relationships. This study also clarifies the unclear
perceptions of previous studies and expands organizational human capital and competitive
advantage theories.
At the same time, this research ensured the definition and dimension division of the Construction of
OHCCA concept and also provides practical guidance for companies and other organizations structural
to create human capital competitive advantages. It contributes companies and other
organizations to pay attention to organizational human capital investment planning, practice,
dimensions of
stock and combining three parts to create OHCCA. In addition, the OHCCA formation process OHCCA
model constructed has practical guiding significance for the organization to create it. In the
past, some organizations usually studied human capital investment from the perspective of
the organization but ignoring the role and value of human capital investment in individual, 1101
teams or departments. Some scholars believe that human capital resources can also be
combined across levels to form different types of collective human capital resource
combinations. Which may be more valuable, rarer and unique, and thus more likely to
generate sustainable value for organizations. Synergy between resources may also exist,
thereby enhancing their ability to generate competitive advantage. OHCCA formation model
constructed in this study guides organizations considers the important role of human capital
investment in teams or departments and employees. In addition, this study provides
resources and platforms for teams or departments and employees initiatively. Organizations,
teams or departments and employees could cooperate through organizational empowerment
to achieve OHCCA formation.
Creating sustainable competitive advantage is an organizational strategic goal, long-term
task and complex system engineering. It is the basis and prerequisite to establish the
sustainable competitive advantage of the organization. That is necessary to attach
importance to human capital investment planning in management practices, carry out
human capital investment practices and gather high-quality human capital investment stock
to create it. It will be difficult to form human capital competitive advantages even ignored one
of these three dimensions. As the result of realizing this kind of competitive advantage
requires combine three aspects reasonable. Take Jilin General Machinery (Group) for case
study. In 2006, it was restructured to establish a limited liability company which mainly
produces auto parts. The company has established a “three-step” strategic goal: the first step
is to establish a global “lightweight” R&D and production base for auto parts; the second step
is to establish a full coverage R&D and production base for chassis parts; the third step is to
establish the world’s largest R&D and production base for auto parts, to create a smart
factory and become a demonstration base for Industry 4.0 and China Manufacturing 2025.
Decision-makers have realized that a large number of senior professional technology and
R&D, skilled, management and service talents are needed to achieve the “three-step” strategic
goal. Based on this, Jilin General Machinery (Group) has formulated a series of human capital
investment plans including the regular managerial meeting learning system, the
establishment of “special forces”, the “teacher and apprentice” system, the “three-level
training” plan, the talent reserve plan, the management training plan and so on. The regular
meeting learning system for managers means that the company establishes this meeting
regulations for managers at and above the grassroots level twice a week. The purpose is to
broaden horizons and unify business philosophy, clear goals and directions of individuals
and organization. Then the grassroots managers will spread the content of meeting to the
frontline employees, so that the company can maintain a dynamic vitality of continuous
learning from top to bottom. Special forces possess diverse employees with specified skills
and abilities.
The “teacher and apprentice” mode is to choose some experienced technical specialists to
guide new employees (apprentices) in the forms of “one to one” and “one to multiple”. The
“three-level training” plan refers to the in-factory training, pre-job training and on-the-job
training programs designated by the company for employees. The talent reserve plan refers
to the establishment of a “general engineer class” by the company through cooperation with
six universities such as Jilin University and others which will extend the length of schooling
JIC by one year compared with ordinary college students. Schools and enterprises jointly
23,5 formulate talent training plans, determine teaching plans and syllabus and develop
evaluation systems in this talent reserve plan. After graduation, most students choose to
work in the company on their own. Therefore, this plan cultivated and retained high-quality
reserve talents for the company. The management training program means that the company
has established a training center and holds training classes for reserve cadres at all levels
every year; regularly selects senior executives to foreign cooperate companies for on-site
1102 training, and arranges for senior executives to study EMBA in major domestic universities
for systematic and high-level corporate management training. The company has formulated
a human capital investment plan by considering strategic goals and has invested in human
capital in various forms which has accumulated high-quality human capital stock for
enterprises to participate in market competition and also obtained high market returns. When
the company was restructured into a limited liability company in 2006, it had sales of RMB 50
million, also achieved sales revenue of RMB 3.02 billion by 2017.
Researchers have found that the human capital investment of Chinese companies lack
sufficient plan and have not been effectively integrated with corporate strategy (Li and Yu,
2016); most companies carry out new employee, key employee, managerial trainings to
execute human capital investment, but the effects are different. As the result of lack of human
capital investment planning, weak human resource management practices or human capital
investment practices, only pay attention to general human capital investment stock, ignoring
specific or dedicated human capital investment stock and so on. The study found that
organizations must attach great importance to human capital investment planning, human
capital investment practices and human capital investment stock to ensure that three
complement each other and indispensable when create human capital competitive advantage.
5.1.4 Research limitations and prospects. There are two limitations: one is that it only
builds a model of the formation of organizational human capital competitive advantage based
on existing literature and research observations which has emphasis on the indispensability
of human capital investment at the individual, team, and departmental levels and
transformation conditions such as organizational strategic isolation mechanism, the ability
of manage human capital resources and others are vital. But there are no further
demonstrations of the formation process of organizational human capital competitive
advantage. The second is that the research objects are limited to companies in China.
Although the selected companies are all high-performance companies in the industry, would
restrict by geography, cultural and institutional factors. Thus, conclusions of the study need
to be further tested in other countries and regions to enhance the applicability of it.
Research prospects: OHCCA is a core competitiveness and the key to gain high-level
organizational performance and sustainable development. First, future studies can expand
the scope of the research object, such as taking the world’s top 500 enterprises to enrich and
complete the OHCCA theory. Second, a scale tool can be developed based on the existing
structural dimensions to measure OHCCA in related research. Third, empirical study can be
utilized to analyze the main factors that affect OHCCA and its impact on organizational
performance and innovation. Finally, the relationship and cooperation mechanism between
OHCCA and other organizational competitive advantages and research on the integration of
organizational competitive advantages from a strategic perspective can be explored.

5.2 Research conclusion


This study focuses on the relationship between organizational human capital and
competitive advantage. According to resource-based view, dynamic capability and human
capital theories, we have explored the relationships between individual and organizational
human capital, organizational human capital and competitive advantage. A process model
for OHCCA formation is constructed at the individual, team or departmental and Construction of
organizational level. This study states that organizational human capital is not only a structural
collection of individual human capital but also the result of organizational human capital
investment. Organizational, team or department, individual human capital investments
dimensions of
constitute organizational human capital resource pool in the process of OHCCA formation. OHCCA
Organization’s human capital resource cannot constitute competition advantages that
require certain conditions to transform into competitive advantages. The main
transformation conditions are organizational strategic isolating mechanism and the 1103
organization’s ability to manage human capital resources.
This study applies grounded theory for open, spindle and selective coding based on
interviews and literature research and summarizes and extracts categories (8), main
categories (3) and the core category of OHCCA. Thus, OHCCA connotation and structural
dimensions are further clarified. This study also constructs a dimensional model of OHCCA
structure and defined human capital investment planning, practice, stock verification.
Studies have shown that OHCCA is vital to organizational sustainable development and is a
prerequisite for enterprise’s competitive advantages.

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Corresponding author
Wenchen Guo can be contacted at: guowch@dlut.edu.cn

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