Change theories

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About Human Capital & Change Theories

When companies hire, they look towards increasing their human capital. To be hired for certain positions and roles, individuals seeking employment must 'tick' certain boxes in the required skill set, competencies, knowledge, experience and personality attributes to perform labour and services that are of economic value to a company. An IT expert's skill set for example is of economic value just as his experience and knowledge is, helping the company achieve its goals, tasks and targets by doing so. All members of a company, a business, an organization and a firm is its human capital hence by investing in increasing membership skill set, education and experience, the organization stands to benefit. Previously, the human capital is labelled as the workforce but classical economic theorist Adam Smith refers to the workforce as one of the 4 indispensible fixed capital that allows for revenue or profit to be made despite of leadership or ownership change. The 4 are as follows - 1. Machines, equipment and instruments of the trade; 2. Buildings or geographic location of the trade; 3. Improvements on the site and 4. The human talent that makes the trade possible. The term Human Capital did not surface however till 1954 when economist A.W. Lewis introduced the term in his paper the "Economic Development with Unlimited Supplies of Labour." The current attributed meaning though surfaced much later on in the works of economists Jacob Mincer and Gary Becker. Becker's 1964 book, the 'Human Capital' standardised the idea of human capital as a means to production in that increased skill set of the workforce adds to the output. Unlike other capital though it is not transferable but only substitutable as human beings are subject to the social condition. The economic theory of modern growth pins development on human capital based on the conditions, for example, of the amazing growth and development human talent has created via technological advancement. We now live in a digital world made possible by human talent making the most skilled and talented in competitive industries the most sought after (today for example, its IT, medicine, science, entertainment, banking and engineering).

Change is a reality in the social world. In terms of organizational integrity, change happens because society is dynamic. In fact, if there is a constant in the social world, it is that change always occurs. Organizations are social structures, social groups and social institutions. It does not matter whether they are secondary, primary or referential in nature, whether they are big or small. They are made up of social agents affecting the entire structure just as the culture that continues to develop and change within the organization is affecting them. Plus, there are other factors that can affect their organization not only within but without - the environment, the social situation, new trends, market demand, etc. Change can be viewed or seen through various phases and there are theories that seek to explain why, how, to whom and what makes change happen. One of these is Kurt Lewin's 3-step change model. For Lewin, behaviour is a dynamic balance of forces, increase or decrease elements in this balance and one affects behavioural outcome. The first step is unfreezing the current model, the equilibrium or status qou. By doing so individual resistance to new ideas and group conformity is addressed. The second step is ...