Working Paper: NBER ID: w15619
Authors: Casey Ichniowski; Kathryn L. Shaw
Abstract: Traditional human capital theory emphasizes a worker's investment in knowledge. However, when a worker is faced with day-to-day problems on the job, the solutions to the problems often require more knowledge from a team of experts within the firm. When a worker taps into the knowledge of experts, the worker develops his "connective capital." Firms that value problem solving highly will develop the human resource management practices that support the environment of sharing knowledge. Data from the steel industry displays these concepts. For seven large steel mills, we gather data on the communications networks of steelworkers. The data shows that networks are exceedingly diverse across mills, and that the mills that have human resource management practices that support teamwork are the mills that have with much more dense high-volume communications links among workers. That is, workers in team-orientated mills have much higher levels of personal connective capital used for problem-solving.
Keywords: connective capital; social capital; problem-solving networks; teamwork; human resource management
JEL Codes: J24; J3; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Connective capital (E22) | Productivity (O49) |
| HR practices that promote teamwork (M54) | Connective capital (E22) |
| Higher productivity from team problem-solving (O36) | Connective capital (E22) |
| Low asking and sharing costs of communicating (L96) | Investment in connective capital (E22) |
| Level of human capital (J24) | Connective capital (E22) |
| Proportion of experts in a firm (L25) | Connective capital (E22) |
| HR practices (M51) | Connective capital formation (E22) |
| Firms that value problem-solving (L20) | Investment in HR practices (J24) |
| Externalities and group-based rewards (D62) | Underinvestment in connective capital (H54) |