IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v11y2000i1p1-20.html
   My bibliography  Save this article

From Security to Mobility: Generalized Investments in Human Capital and Agent Commitment

Author

Listed:
  • D. Charles Galunic

    (European Institute of Business Administration (INSEAD), Boulevard de Constance, 77305 Fontainebleau Cedex, France)

  • Erin Anderson

    (European Institute of Business Administration (INSEAD), Boulevard de Constance, 77305 Fontainebleau Cedex, France)

Abstract

This paper considers the impacts of different investments in human capital (firm-specific versus generalized investments) on employee commitment to the firm. The resource-based literature has stressed that only firm-specific human capital is likely to generate organizational rents, since those assets are more likely to be inimitable, rare, and therefore a better basis for sustained competitive advantage. Generalized investments in human capital (i.e., investments in capabilities that people can transfer and deploy to other firms or settings) are to be avoided. However, observing lessons from the literature on psychological contracts and organizational commitment, we argue that generalized investments may have value for the firm through their effects on worker commitment to the firm. The gain in worker commitment is valuable to firms given the fragile state of the contemporary employment relation, in which the lack of job security is likely to breed diminished employee commitment. This is particularly a concern for employment relations consisting of externalized labor (i.e., contract work or selfemployed professionals operating as agents of the firm), in which agent commitment is vital but likely to be more scarce. In this paper we focus on the externalized workers (independent agents) of two insurance firms in addressing these issues. A sample of 237 agents shows support for the benefits of generalized investments on agent commitment, questioning conventional wisdom that such investments should be avoided. We also examine the impact of relation-specific investments and other key antecedents on agent commitment, concluding that a mixture of strategic investments in human capital should be considered, taking into account their impacts on the firm-worker psychological contract. We also examine the impact of agent commitment on agent performance in this context, finding committed agents do provide greater value to the insurer.

Suggested Citation

  • D. Charles Galunic & Erin Anderson, 2000. "From Security to Mobility: Generalized Investments in Human Capital and Agent Commitment," Organization Science, INFORMS, vol. 11(1), pages 1-20, February.
  • Handle: RePEc:inm:ororsc:v:11:y:2000:i:1:p:1-20
    DOI: 10.1287/orsc.11.1.1.12565
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.11.1.1.12565
    Download Restriction: no

    File URL: https://libkey.io/10.1287/orsc.11.1.1.12565?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chip Heath & Marc Knez & Colin Camerer, 1993. "The strategic management of the entitlement process in the employment relationship," Strategic Management Journal, Wiley Blackwell, vol. 14(S2), pages 75-93, December.
    2. Akbar Zaheer & N. Venkatraman, 1994. "Determinants of Electronic Integration in the Insurance Industry: An Empirical Test," Management Science, INFORMS, vol. 40(5), pages 549-566, May.
    3. W. Chan Kim & Renée A. Mauborgne, 1995. "A Procedural Justice Model of Strategic Decision Making: Strategy Content Implications in the Multinational," Organization Science, INFORMS, vol. 6(1), pages 44-61, February.
    4. Sidney E. Harris & Joseph L. Katz, 1991. "Organizational Performance and Information Technology Investment Intensity in the Insurance Industry," Organization Science, INFORMS, vol. 2(3), pages 263-295, August.
    5. Eric Abrahamson & Lori Rosenkopf, 1997. "Social Network Effects on the Extent of Innovation Diffusion: A Computer Simulation," Organization Science, INFORMS, vol. 8(3), pages 289-309, June.
    6. Kathleen R. Conner & C. K. Prahalad, 1996. "A Resource-Based Theory of the Firm: Knowledge Versus Opportunism," Organization Science, INFORMS, vol. 7(5), pages 477-501, October.
    7. Oliver E. Williamson & Scott E Masten (ed.), . "The Economics of Transaction Costs," Books, Edward Elgar Publishing, number 1652.
    8. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    9. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-540, September.
    10. Anderson, Erin, 1988. "Transaction costs as determinants of opportunism in integrated and independent sales forces," Journal of Economic Behavior & Organization, Elsevier, vol. 9(3), pages 247-264, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Itismita Mohanty & Robert Tanton, 2012. "A wellbeing framework with adaptive capacity," NATSEM Working Paper Series 12/17, University of Canberra, National Centre for Social and Economic Modelling.
    2. Fernando J. Garrigos-Simon & M. Dolores Botella-Carrubi & Tomas F. Gonzalez-Cruz, 2018. "Social Capital, Human Capital, and Sustainability: A Bibliometric and Visualization Analysis," Sustainability, MDPI, vol. 10(12), pages 1-19, December.
    3. Koster, F. & de Grip, A. & Fouarge, D., 2009. "Does perceived support in employee development affect personnel turnover?," ROA Research Memorandum 008, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    4. Laurie Brown & Binod Nepal, 2011. "Modelling Potential Impact of Improved Survival of Indigenous Australians on Work-Life Labour Income Gap Between Indigenous and Average Australians," NATSEM Working Paper Series 11/15, University of Canberra, National Centre for Social and Economic Modelling.
    5. Welch, Denice & Welch, Catherine, 2015. "How global careers unfold in practice: Evidence from international project work," International Business Review, Elsevier, vol. 24(6), pages 1072-1081.
    6. KonShik Kim & Tack-Hyun Shin, 2019. "Additive Effects of Performance- and Commitment-Oriented Human Resource Management Systems on Organizational Outcomes," Sustainability, MDPI, vol. 11(6), pages 1-21, March.
    7. Christine MARSAL, 2010. "Les mécanismes cognitifs de gouvernance : un atout pour les banques mutuelles," CIRIEC Working Papers 1007, CIRIEC - Université de Liège.
    8. Jasmijn C. Bol & Cassandra Estep & Frank Moers & Mark E. Peecher, 2018. "The Role of Tacit Knowledge in Auditor Expertise and Human Capital Development," Journal of Accounting Research, Wiley Blackwell, vol. 56(4), pages 1205-1252, September.
    9. Goo Hyeok Chung & Jongwook Pak, 2021. "Is there internal fit among ability-, motivation-, and opportunity-enhancing HR practices? Evidence from South Korea," Review of Managerial Science, Springer, vol. 15(7), pages 2049-2074, October.
    10. Michael Young & Terence Tsai & Xinran Wang & Shubo Liu & David Ahlstrom, 2014. "Strategy in emerging economies and the theory of the firm," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 331-354, June.
    11. Pooja K. Singh & M. K. Rao, 2017. "HR Practices, Learning Culture and Human Capital: A Study on Indian Business and Professional Service Sector," Global Business Review, International Management Institute, vol. 18(3), pages 678-690, June.
    12. Mohammad Rabiul Basher Rubel & Nadia Newaz Rimi & Tim Walters, 2017. "Roles of Emerging HRM and Employee Commitment: Evidence from the Banking Industry of Bangladesh," Global Business Review, International Management Institute, vol. 18(4), pages 876-894, August.
    13. Christoph H. Loch & D. Charles Galunic & Susan Schneider, 2006. "Balancing cooperation and competition in human groups: the role of emotional algorithms and evolution," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(2-3), pages 217-233.
    14. Shawn M. Riley & Steven C. Michael & Joseph T. Mahoney, 2017. "Human capital matters: Market valuation of firm investments in training and the role of complementary assets," Strategic Management Journal, Wiley Blackwell, vol. 38(9), pages 1895-1914, September.
    15. Brian R. Murtha & Goutam Challagalla & Ajay K. Kohli, 2011. "The Threat from Within: Account Managers' Concern About Opportunism by Their Own Team Members," Management Science, INFORMS, vol. 57(9), pages 1580-1593, February.
    16. Daniel Palacios-Marques & Ignacio Gil-Pechuán & Seongbae Lim, 2011. "Improving human capital through knowledge management practices in knowledge-intensive business services," Service Business, Springer;Pan-Pacific Business Association, vol. 5(2), pages 99-112, June.
    17. Imanol Nunez & Ilias Livanos, 2015. "Temps “by choice”? An Investigation of the Reasons Behind Temporary Employment Among Young Workers in Europe," Journal of Labor Research, Springer, vol. 36(1), pages 44-66, March.
    18. Keongtae Kim & Sunil Mithas & Jonathan Whitaker & Prasanto K. Roy, 2014. "Research Note —Industry-Specific Human Capital and Wages: Evidence from the Business Process Outsourcing Industry," Information Systems Research, INFORMS, vol. 25(3), pages 618-638, September.
    19. repec:bla:jomstd:v:47:y:2010:i:s1:p:859-883 is not listed on IDEAS
    20. S. M. M. Raza Naqvi & Nousheen Kanwal & Maria Ishtiaq & Mohsin Ali, 2013. "Impact Of Job Autonomy On Organizational Commitment: Moderating Role Of Job Satisfaction In Tobacco Industry Of Pakistan," Far East Journal of Psychology and Business, Far East Research Centre, vol. 12(5), pages 57-72, July.
    21. Kaouthar Lajili, 2015. "Embedding human capital into governance design: a conceptual framework," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(4), pages 741-762, November.
    22. Joachim Vosgerau & Erin Anderson & William T. Ross, Jr., 2008. "Can Inaccurate Perceptions in Business-to-Business (B2B) Relationships Be Beneficial?," Marketing Science, INFORMS, vol. 27(2), pages 205-224, 03-04.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lim, Wei Shi & Tan, Soo Jiuan, 2010. "Outsourcing suppliers as downstream competitors: Biting the hand that feeds," European Journal of Operational Research, Elsevier, vol. 203(2), pages 360-369, June.
    2. Ali Tafti & Sunil Mithas & M. S. Krishnan, 2013. "The Effect of Information Technology-Enabled Flexibility on Formation and Market Value of Alliances," Management Science, INFORMS, vol. 59(1), pages 207-225, June.
    3. Maike Scherrer-Rathje & Patricia Deflorin & Gopesh Anand, 2010. "Outsourcing and its Impact on Manufacturing Flexibility: Contingencies Matter," Working Papers 0125, University of Zurich, Institute for Strategy and Business Economics (ISU).
    4. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    5. Kang, Min-Ping & Mahoney, Joseph T. & Tan, Danchi, 2007. "Why Firms Make Unilateral Investments Specific to Other Firms: The Case of OEM Suppliers," Working Papers 07-0110, University of Illinois at Urbana-Champaign, College of Business.
    6. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    7. Rui Baptista & Murat Karaöz & João Correia Leitão, 2020. "Diversification by young, small firms: the role of pre-entry resources and entry mistakes," Small Business Economics, Springer, vol. 55(1), pages 103-122, June.
    8. Malik, Omar R., 2008. "Adapting to market liberalization: The role of dynamic capabilities, initial resource conditions, and strategic path choices in determining evolutionary fitness of Less Developed Country (LDC) firms," Journal of International Management, Elsevier, vol. 14(3), pages 217-231, September.
    9. Forsgren, Mats & Pedersen, Torben & Foss, Nicolai J., 1999. "Accounting for the strengths of MNC subsidiaries: the case of foreign-owned firms in Denmark," International Business Review, Elsevier, vol. 8(2), pages 181-196, April.
    10. Minerva Martínez Avila & Juan José García-Machado & Eréndira Fierro Moreno, 2021. "A Multiple Full Mediating Effect in a PLS Hierarchical Component Model: Application to the Collaborative Public Management," Mathematics, MDPI, vol. 9(16), pages 1-19, August.
    11. Frank T. Rothaermel & Maria Tereza Alexandre, 2009. "Ambidexterity in Technology Sourcing: The Moderating Role of Absorptive Capacity," Organization Science, INFORMS, vol. 20(4), pages 759-780, August.
    12. Der-Fang Hung, 2015. "Sustained Competitive Advantage and Organizational Inertia: The Cost Perspective of Knowledge Management," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 769-789, December.
    13. Pascucci, Stefano & Royer, Annie & Bijman, Jos, 2012. "To Make or to Buy: Is this the Question?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(3), pages 1-20, September.
    14. Milorad M. Novicevic & M. Ronald Buckley & Michael G. Harvey, 2000. "The Changing Role of Managers within the Supply Chain Networks: Theory and Practical Implications," American Journal of Business, Emerald Group Publishing, vol. 15(2), pages 33-42.
    15. Gatignon, Aline & Gatignon, Hubert, 2010. "Erin Anderson and the Path Breaking Work of TCE in New Areas of Business Research: Transaction Costs in Action," Journal of Retailing, Elsevier, vol. 86(3), pages 232-247.
    16. Ana Villar & César Camisón & Montserrat Boronat, 2007. "Technical Strategic Alliances And Performance: The Mediating Effect Of Knowledge ¿Based Competencies," Working Papers. Serie EC 2007-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    17. Manuel Branco & Lúcia Rodrigues, 2006. "Corporate Social Responsibility and Resource-Based Perspectives," Journal of Business Ethics, Springer, vol. 69(2), pages 111-132, December.
    18. Grillitsch, Markus & Nilsson , Magnus, 2013. "Technological competencies and firm performance: Analyzing the importance of internal and external competencies," Papers in Innovation Studies 2013/24, Lund University, CIRCLE - Centre for Innovation Research.
    19. Pankaj C. Patel & John A. Pearce II, 2020. "Franchisees and Loan Default on Third-Party Guarantee Loans: Evidence From the United States," Entrepreneurship Theory and Practice, , vol. 44(5), pages 861-877, September.
    20. Cricelli, Livio & Mauriello, Roberto & Strazzullo, Serena, 2023. "Preventing open innovation failures: A managerial framework," Technovation, Elsevier, vol. 127(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:11:y:2000:i:1:p:1-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.