Micro-foundations Happening: Strategic Human Capital

16 February 2014 at 5:19 am 1 comment

| Nicolai Foss |

After about a decade of methodological discussion (involving some preaching on both sides of the debate), the micro-foundations project in macro-management research is now beginning to take off in the “doing” dimension. Specifically, scholars are building micro-foundational theory and they are wrestling with the empirical challenges in the micro-foundations. The theoretical and empirical challenges largely derive from the inherent multi-level nature of the micro-foundations project.  Theory-building cannot just be somehow moving, say, individual-level organizational behavior insights to the organizational level, but must be genuinely multi-level which raises tricky issues of aggregation and downward causation. Data sampling will necessarily have to take place at at least two levels. This  is complicated and usually expensive. Access to good micro-level data is particularly troublesome (one of the advantages of living in a socialist country like Denmark is that the Big Nanny literally looks after her children: We have register data that is incredibly detailed regarding human capital dimensions (i.e., not just gender, age, education, etc., but also complete job history, school and university grades , criminal record, household income, history of medication, etc. — and this is for each and every employee in the DK economy)).

One of the areasis in which the micro-foundations project is being realized in the theoretical and empirical dimensions is what is increasingly often referred to as “strategic human capital.” This is an emerging field (it has its own interest group at the Strategic Management Society) that is quite overlapping with “strategic human resource management,” and which links strategic management, traditional SHR and HR, and human capital theory.  The February special issue of Journal of Management, expertly edited by Patrick Wright, Russ Coff and Thomas Moliterno, three key drivers in the SHRM/SHC field, contains ten fine papers on SHC.  The introductory essay by the editors nicely lays out the main challenges and issues. Many of the challenges are quite “low-practical” — e.g., people trained in strategy focus a lot on endogeneity, where HR and OB people focus a lot on construct validity issues that strategy folks care less about. Yet, such differences may be quite decisive–as the editors learned while handling the review process!  The editors also deal with key issues, such as what are the important dimensions of human capital for the purposes of the SHM field, how can human capital be characterized at different analytical levels, and what are the antecedents and consequences of human capital. I look forward to sinking my teeth into the research articles in the coming week.

Entry filed under: - Foss -, Management Theory, Methods/Methodology/Theory of Science. Tags: .

CFP: Coase Memorial Issue of Man and the Economy The Theory of Mind in Agency Theory

1 Comment Add your own

  • 1. RussCoff  |  16 February 2014 at 9:36 am

    Thanks for the call out, Nicolai.

    As you may note in our editorial introduction, it was more of a challenge than we expected. We put one HR reviewer and one strategy reviewer on nearly every manuscript. Consequently, they split on every paper. That put pressure on the authors to work hard to bridge the gap. At the same time, it put a lot of tough decisions on the editors, some of whom are otherwise fundamentally lazy people prone to shirking (of course, I can only speak for myself here ;-) …

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).


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