The human capitalist approach studies the cost- infinite of such investment in terms of its efficiency in reaching equilibrium in the amount of investment in education, as opposed to investment in other factors of production, for the purpose of maximizing the return on investment. Similarly, HARD views humans as resources to be trained, educated, and developed within the system of an organization for the purpose of enhancing the productivity of the organization through the expertise of its workforce.
Jacobs (1990) and Swanson (1995), among others, have characterized HARD as a multidisciplinary field of study. As shown in Figure 1, they identify economics as an important discipline that contributes to the theoretical basis of HARD. Economics and human capital theory have become important foundational ingredients for HARD theory and practice. Moreover, in his first editorial for the commencement of HARD, Swanson (1990) divided the contents of HARD into two components: (1) human development (psychology and education) and (2) human capital (economics and management).
Carbondale, Gainer, and Fillet (1990), in taking a human capital approach, place HARD at the strategic level within the organization. They view employees as a resource that must be trained in order to maintain the competitive advantage of the corporation and increase its value. In this perspective, HARD activities (specifically, training) become utilitarian in the organizational strategy to keep up with economic and technological changes. Therefore linking training with specific Job functions and performance requirements becomes the strategy for maximizing the return on investment.
It is the economic potential and the economic rationale that provides the impetus for investing in workplace training. Training is an integral part of the economic system, whether we offer to it as being part of the organizational Microsystems or a national Microsystems. Figure 2 shows the confluence of corporate strategy and governmental Figure 1 . Role of Economics in HARD Intervention Society: Developing Countries HARD Psychology Note: Adapted from Swanson, 1995 Economics: Economic Development Systems The Role of HARD in Economic Development Figure 2.
Confluence of HARD and Economic Development Six Causes of Economic Development 439 Foreign Trade Resource Allocation Human Capital Formation Savings and Investments Education and Training HARD Individual Performer Foreign Direct Investment Multinational Enterprise economic development policy, where the decisions are both based in part on issues of efficiency and cost-effectiveness. Governments, in addition to their public education systems, may provide corporations and other private institutions with investment and tax incentives for developing their employees.
Likewise, individual human beings Join this confluence by considering the economic benefits of pursuing any educational or training endeavor. Members of the workforce take into account such factors as time, cost, effort, and opportunity cost when embarking on developing heir skills in pursuit of employment or in maintaining employability. In sum, governments, companies, and individuals must-?and do-?consider the economic value of their investment in training before committing their own resources.
Thus HARD professionals must consider the impact of their interventions, not only on individuals and organizations but on society at large. Multinational Enterprises and Developing Countries Throughout history, capitalism has made its advances in human productivity on the basis of the exploitation of human labor, technological innovation, and the appropriation of vast material wealth, rarely through the education and training of the large majority of the workforce (Gaston and Green, 1996).
However, as the twenty-first century opens a new chapter in human history, there seems to be, according to Gaston and Green, “a consensus that the salience of a nation’s education and training system is becoming the key item in the struggle for competitive [economic] superiority’ (p. 1). All the countries around the world, both developed and developing, seem to realize that the road to economic growth and development is tied to the skill formation of their human capital; they must improve he productivity of the labor force, thus raising the living standards of the population.
Further, Throw (1996) posits that countries wishing to develop and succeed in the future must begin to make long-term plans and commit major resources as investments in the education and the high skill formation of their society. Marshal and Tucker (1992) state: The future now belongs to societies that organize themselves for learning. What we know and can do holds the key to economic progress Just as are organized as national learning systems, and where all institutions are organized o learn and to act on what they learn. P. Xiii) According to Throw (1996), in the past two centuries the economic theory of comparative advantage directed companies to locate new business ventures in the world where natural resources and labor forces were abundant. Today and for the next century, however, the comparative advantage rests with the knowledge and skills of the workforce. In fact, Throw (1996) asserts that the successful companies in the next century will be those who can create, organize, and capitalize on the brainpower of the global workforce.
Mines play a major role in the global human source development area, both directly and indirectly (Dunning, 1993). Dunning further suggests that Mines play an indirect role in the development of the workforce, in that the countries will attempt to develop their domestic human resources to meet the potential needs of Mines who may be prospecting for a new foreign direct investment (FED) location. Mines, once established in a new country, become directly involved in further developing the skills of the foreign workforce they hire. This process involves various degrees of technological transfer that may in part affect an
Lad’s ability to develop its own domestic economy. However, Dunning concludes that the effects of the MEN activity on the eventual skill mix and quality of the workforce in a particular country are not clear. The literature suggests that, in its strategy for economic development, any developing country will need to develop, educate, and train its human resources. Within Olds interested in attracting private sector FED, the preparation of a segment of these human resources will be targeted to meet the needs of prospective MEN investments.
Mines will also be searching the global The Role of HARD in Economic Development 41 market for new locations as prospects for their investment in production and service ventures. MEN decisions concerning their new venture locations will be affected, in part, by the availability of skilled human resources that will meet their needs (Bailey, Apiarists, and Ranches, 1993). However, these Olds can only guess at the skill needs of the potential MEN ventures that may be seeking to start operation within their borders.
Therefore, to be more effective in their educational and training programs and to enhance their potential return on their investment in their human capital, Olds interested in attracting MEN investments need to have better information about the criteria that Mines use in determining the readiness of the labor force in a particular country in terms of their skill formation. Proposed Research Questions The literature suggests that the successful and dominant companies of the future will be those able to capitalize on the knowledge and skills of the global workforce (Gaston and Green, 1996; Throw, 1996).
Multinational enterprises will be competing any country, for the recruitment and retention of highly skilled employees. However, here is a need to develop additional knowledge about the attitudes of these Mines toward the workforce in developing countries, the skill formation characteristics of the workforce that the Mines are looking for, and the emphasis placed on workforce characteristics by the Mines in determining their decision to initiate new ventures in any particular country.
This research agenda attempts to identify these MEN attitudes, desired workforce characteristics, and emphasis placed on these characteristics in the process of selecting a particular country for possible investment in a new business venture. In addition, Olds interested in attracting Mines into their economies have to ensure that their workforce is skilled and ready to meet the Job performance requirements of these companies. What kinds of programs should Olds be designing and implementing for the purpose of developing the skills of the workforce to meet the employment challenges of the twenty-first century?
The following are preliminary research questions: What are the assumptions, beliefs, and predispositions of Mines when considering a workforce in developing countries? What workforce characteristics are most critical to Olds and to Mines? How much emphasis is placed on workforce characteristics within the MEN system when deciding on new investment ventures in a developing country? To what extent are Olds planning and implementing high skill formation programs for developing their workforce?
Which selection criteria are used by Olds to choose a high skill formation approach as opposed to a low skill formation approach? 442 How do Olds address concerns of the nontraditional workforce such as women, older workers, and people with disabilities, among others? What is the impact of various overspent policies and corporate strategies on such societal outcomes as improving workforce performance, enhancing the quality of work life, and advancing the living standards of citizens? Conclusion The proposed research questions can be viewed as starting points for the HARD field.
Human capital theory at the macro (societal) level complements HARD at the micro (organizational) level, and so on. The assumption here is that OLD governments must take a proactive approach toward creating educational systems that prepare the labor force for the global economy of the twenty-first century. This labor force then, in the systems view of the organization articulated by Rumble and Breach (1995), becomes one of the critical inputs for any organization (read economic entity) functioning within the boundaries of the respective OLD.
At that point, HARD practitioners, in their focus on training and development, organization development, and career development, take the responsibility for enhancing the performance of the organization through the assessment of needs and the identification of gaps in strongly believe in the viability of the aforementioned perspectives, my philosophical sews, influenced in part by my personal values and professional experience, compel me to keep in mind that the workforce discussed here is not merely an abstract concept or simply a form of capital or a resource to be used for the planned and targeted ends of countries and corporations.
This labor force comprises individual human beings who have their own goals, desires, and aspirations. Therefore, because human capital is different from physical or financial capital and is unique in that it has a will of its own, I believe that it becomes more difficult to determine the causal relationship between the actions of the HARD practitioners and the effects on the organizational outcomes, not to mention the ethical ramifications with regard to the individual human being.