Human Capital, Capabilities, and the Firm

David J. Teece

in The Oxford Handbook of Human Capital

Published in print January 2011 | ISBN: 9780199532162
Published online May 2011 | | DOI:

Series: Oxford Handbooks in Business and Management

Human Capital, Capabilities, and the Firm

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This article deals with organizational transformation, noting that twenty-first-century organizations are structured to extend delegation by the senior management team to those whose task-specific expertise is greater than their own. It describes Cisco as ‘a distributed idea engine whose leadership emerges organically, unfettered by a central command’. The article examines the roles in economic development of both human capital (HC) and certain types of firm-level organizational capital. The firm's entrepreneurial, administrative, and transformational capabilities – called dynamic capabilities – undergird its capacity to build and sustain competitive advantage. Maintaining these capabilities in turn requires the business enterprise to recruit, organize, motivate, and deploy highly talented literati and numerati. The basic thesis here is that organizational capabilities and the institutional and legal fabric of society are needed to enable HC – including the literati and numerati – to generate prosperity and economic progress.

Keywords: organizational transformation; economic development; human capital; organizational capital; dynamic capabilities

Article.  14921 words. 

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

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