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Human capital, social capital and organizational performance

Human capital, social capital and organizational performance Purpose – The aim of this paper is to evaluate the human capital and social capital of managers and the influence of these attributes on the performance of small and medium‐sized Portuguese companies. Design/methodology/approach – The structural modeling approach was applied to a sample of 199 small and medium‐sized companies aged between 3 and 15 years, from five different sectors of activity. Findings – It was found that human capital affects social capital, and that experience and cognitive ability influence personal relations and complicity. Organizational performance is strongly influenced by human capital through the cognitive ability of the manager. Practical implications – Based on these findings managers can gain a better knowledge about how to improve the performance of their firms, for example through adjustments in communication methods or strategic decision capacities. Originality/value – This work is innovative in the sense that it confirms the influence of human capital on social capital, and shows that it is cognitive ability that affects organizational performance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Decision Emerald Publishing

Human capital, social capital and organizational performance

Management Decision , Volume 52 (2): 15 – Mar 11, 2014

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Publisher
Emerald Publishing
Copyright
Copyright © 2014 Emerald Group Publishing Limited. All rights reserved.
ISSN
0025-1747
DOI
10.1108/MD-04-2013-0260
Publisher site
See Article on Publisher Site

Abstract

Purpose – The aim of this paper is to evaluate the human capital and social capital of managers and the influence of these attributes on the performance of small and medium‐sized Portuguese companies. Design/methodology/approach – The structural modeling approach was applied to a sample of 199 small and medium‐sized companies aged between 3 and 15 years, from five different sectors of activity. Findings – It was found that human capital affects social capital, and that experience and cognitive ability influence personal relations and complicity. Organizational performance is strongly influenced by human capital through the cognitive ability of the manager. Practical implications – Based on these findings managers can gain a better knowledge about how to improve the performance of their firms, for example through adjustments in communication methods or strategic decision capacities. Originality/value – This work is innovative in the sense that it confirms the influence of human capital on social capital, and shows that it is cognitive ability that affects organizational performance.

Journal

Management DecisionEmerald Publishing

Published: Mar 11, 2014

Keywords: Performance; Human capital; Social capital; Small to medium sized enterprises; Cognitive ability

References