Keywords

human capital, competitive advantage, micro-foundations

Abstract

From the origins of the Resource Based View, scholars have emphasized the importance of human capital as a source of sustained competitive advantage and recently there has been great interest in gaining a better understanding of the micro-foundations of strategic capabilities. Along these lines, there is little doubt that heterogeneous human capital is often a critical underlying mechanism for capabilities. Here, we explore how individual level phenomena underpin isolating mechanisms that sustain human capital-based advantages but also create management dilemmas that must be resolved in order to create value. The solutions to these challenges cannot be found purely in generic HR policies that reflect best practices. These are not designed to mitigate idiosyncratic dilemmas that arise from the very attributes that hinder imitation (e.g., specificity, social complexity, and causal ambiguity). We drill down deeper to identify individual and firm level components that interact to grant some firms unique capabilities in attracting, retaining, and motivating human capital. This co-specialization of idiosyncratic individuals and organizational systems may be among the most powerful isolating mechanism. We conclude by outlining a research agenda for exploring cross-level components of human capital based advantages.

Original Publication Citation

Coff, R. & Kryscynski, D. 2011. Drilling for Micro-Foundations of Human Capital Based Competitive Advantages. Journal of Management, 37 (5):1429-1443.