Article

Accounting for Human Capital and Organizational Effectiveness

Robin Kramar, Vijaya Murthy and James Guthrie

in The Oxford Handbook of Human Capital

Published in print January 2011 | ISBN: 9780199532162
Published online May 2011 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780199532162.003.0016

Series: Oxford Handbooks in Business and Management

Accounting for Human Capital and Organizational Effectiveness

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This article discusses how the shift to a knowledge-based economy has propelled firms' human capital (HC) and associated intellectual resources to center stage. It notes that while organizational researchers have highlighted the increasingly strategic role of HC, and despite a growing realization among firms that their human-knowledge resources are becoming more important, managerial awareness of the value of HC remains low. The article suggests that HC management, measurement, and reporting are increasingly vital capabilities that all organizations will need to acquire. It proceeds to analyse the nature of HC, trace the evolution of HC accounting, identify current accounting challenges, and describe contemporary frameworks that are seeking to address these challenges. The article defines HC within organizations as ‘employee capability, knowledge, innovation, adaptability, and experience’, noting that it is typically represented as one element in a tripartite framework of intellectual capital, the other two being relational capital and organizational capital.

Keywords: knowledge-based economy; human capital; employee capability; knowledge; innovation; adaptability

Article.  6628 words. 

Subjects: Business and Management ; Organizational Theory and Behaviour ; Business Strategy

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