EMERGENCE OF THE HUMAN CAPITAL RESOURCE: A · PDF filea unit-level1 resource that is created from the emergence of individuals’ knowledge, skills, abilities, and other characteristics

EMERGENCE OF THE HUMAN CAPITALRESOURCE: A MULTILEVEL MODEL

ROBERT E. PLOYHARTTHOMAS P. MOLITERNO

University of South Carolina

This article offers a new approach to the conceptualization of the human capitalresource by developing a multilevel model connecting micro, intermediate, and macrolevels of scholarship. We define human capital as a unit-level resource that is createdfrom the emergence of individuals’ knowledge, skills, abilities, or other characteris-tics. The model provides new insights into how strategically valuable human capitalresources have their origins in the psychological attributes of individuals and aretransformed through unit-level processes.

Scholarly thought regarding the importanceof the human capital resource has a long tra-dition. Beginning with Adam Smith’s identifi-cation of “the acquired and useful abilities” ofindividuals as a source of “revenue or profit”(1963/1776: 213–214), there is a widely acknowl-edged sense that individuals possess a stockof skills, knowledge, and experiences that canbe leveraged for organizational and/or per-sonal benefit. Building on this fundamentalinsight, scholars working in disciplinary tra-ditions ranging from psychology (Spearman,1927) to economics (Becker, 1964) have devel-oped the human capital construct. In the realmof management research, microlevel scholarsworking in the human resources (HR), organi-zational behavior (OB), and industrial/organi-zational (I/O) psychology domains, who aregenerally interested in individual-level phe-nomena, have largely studied how employeeknowledge, skills, abilities, and other charac-teristics (KSAOs) are linked to individual-leveloutcomes (e.g., Schmidt & Hunter, 1998). At theother end of the spectrum, macrolevel organi-zational theorists and strategy scholars, whoare generally interested in firm-level phenom-ena, have studied how the aggregate organi-zational-level experience, education, and

skills of employees are resources (Penrose,1959; Rumelt, 1984; Teece, 1982; Wernerfelt,1984) that can be leveraged to achieve sustain-able competitive advantage (Barney, 1991; Pe-teraf, 1993).

Yet despite the prominence of the humancapital construct in both microlevel and mac-rolevel scholarship, and despite great theoret-ical and methodological sophistication withinboth disciplines and levels, there is little un-derstanding about how human capital mani-fests across organizational levels. If one de-fines “multilevel” as theory that speaks to theconnection that integrates two or more levels(Kozlowski & Klein, 2000), then there is no fullyarticulated multilevel theory describing howthe human capital resource is created andtransformed across organizational levels.While the recent strategic HR management(SHRM) literature (e.g., Liao & Chuang, 2004;Nishii, Lepak, & Schneider, 2008; Takeuchi,Lepak, Heli, & Takeuchi, 2007; Wright & Bos-well, 2002) in some ways fills the void betweenthe micro and macro approaches to humancapital by adopting multilevel principles, itfocuses primarily on the organizational prac-tices that leverage individual human re-sources and does not focus as much theoreti-cal attention on how human capital resourcesare created (for critiques see Gerhart, 2005;Lepak, Liao, Chung, & Harden, 2006; Wright &Haggerty, 2005).

This paper addresses this theoretical void andproposes a multilevel model of human capitalcreation. To this end we define human capital as

We thank associate editor David Lepak and three anon-ymous reviewers for comments and feedback that not onlyimproved the manuscript but truly shaped, refined, andfocused our arguments. We are indebted to them for theirinput. We also thank Anthony Nyberg for commenting onprevious versions of this manuscript and Steve Kozlowskifor many helpful conversations relating to this paper.

� Academy of Management Review2011, Vol. 36, No. 1, 127–150.

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a unit-level1 resource that is created from theemergence of individuals’ knowledge, skills,abilities, and other characteristics (KSAOs). Cen-tral to this definition and the multilevel modelwe develop is the process of emergence. Kozlow-ski and Klein describe “a phenomenon [as]emergent when it originates in the cognition,affect, behaviors, or other characteristics of in-dividuals, is amplified by their interactions, andmanifests as a higher-level, collective phenom-enon” (2000: 55). In this way the model we pro-pose articulates the full multilevel process ofhuman capital resource emergence: the “collec-tive” unit-level human capital resource “origi-nates” in individual-level employee KSAOs.Most important, however, is the mechanismwhereby the individual-level KSAOs are trans-formed and “amplified” to become a valuableunit-level resource. To explicate this process wedraw on the groups literature and teams litera-ture (e.g., Kozlowski & Ilgen, 2006) to describe anew mechanism—the “emergence enabling pro-cess”—that is the driver of this transformativeprocess. In describing the mechanism wherebyindividual-level KSAOs become unit-level hu-man capital resources, the emergence enablingprocess is the missing piece in the puzzle con-necting micro and macro human capital schol-arship.

The multilevel model of human capital emer-gence has many broad implications that bothdevelop and challenge prevailing thinking re-garding human capital. First, the model ad-dresses limitations in the existing body of hu-man capital literature both by articulating howindividual-level KSAOs become a strategicallyvaluable resource (typically neglected in mi-crolevel research) and by explaining how unit-level human capital resources are created (typ-ically neglected in macrolevel research).Second, in demonstrating how organizationscreate the valuable human capital resource bybundling individual-level KSAOs, we shed lighton the microfoundations (Abell, Felin, & Foss,

2008; Felin & Hesterly, 2007; Lepak et al., 2006;Teece, 2007) of an important organizational dy-namic capability (Eisenhardt & Martin, 2000;Helfat et al., 2007, Teece, Pisano, & Shuen, 1997).Third, because we explain how human capitaloriginates from the aggregation of individual-level employee KSAOs, we broaden the concep-tualization of the unit-level human capital re-source. Thus, our overarching contribution is amultilevel model of human capital emergencethat not only integrates the macro and microperspectives to yield a more theoretically com-plete picture of human capital’s foundations,creation, and content but also challenges con-ventional thinking on human capital and raisesmany questions requiring theoretical attention.

MULTILEVEL THEORY AND HUMANCAPITAL RESEARCH

Overview of Multilevel Theory

Multilevel theory is concerned with under-standing how constructs and processes are re-lated across levels of analysis (e.g., individualand firm). As Kozlowski and Klein note, “Multi-level theory building presents a substantialchallenge to organizational scholars trained, forthe most part, to ‘think micro’ or to ‘think macro’but not to ‘think micro and macro’—not, that is,to ‘think multilevel’” (2000: 11). In making thelinkage between organizational levels, Kozlow-ski and Klein (2000) identify three major guidingprinciples that are central to both our evaluationof the existing human capital literature and themodel we propose in this paper. First, multilevelscholarship makes a distinction between thelevel of theory and the level of measurement.The level of theory represents the level (e.g.,individual, firm, business unit, etc.) at which aconstruct or process is expected to operate orexist, whereas the level of measurement repre-sents the level at which the construct or processis measured.

Second, multilevel research is concerned withemergence—the processes explaining how andwhy phenomena at lower levels coalesce to cre-ate a higher-level construct that is distinct fromits lower-level origins. The end result of thisprocess leads to different forms of emergence,ranging from composition (e.g., higher-levelphenomena created through the homogeneity oflower-level phenomena) to compilation (e.g.,

1 We use the term unit level to refer generically to theorganizational level of interest. Thus, “unit level” might referto the firm, business unit, division, group, or team level ofanalysis. Since the model of human capital resource emer-gence can apply to different organizational levels of aggre-gation, we opt for the more inclusive unit level term toidentify the level in which researchers have theoretical in-terest.

128 JanuaryAcademy of Management Review

higher-level phenomena created through heter-ogeneity of lower-level phenomena). Emergencedoes not imply higher-level phenomena aremore or less complex than lower-level phenom-ena. Further, a sole focus on the end states ofcomposition or compilation fails to recognize thetheoretical explication of mechanisms drivingemergence. Instead, the goal of multilevel re-search is to explain the underlying theoreticalprocess that creates emergent phenomena. Inthis way, the goal of this paper is to explain thetheoretical process of human capital resourceemergence.

Finally, scholars have argued that ignoringthese multilevel issues may lead to a number offallacious interpretations (Kozlowski & Klein,2000; Rousseau, 1985). These fallacies include (1)misattributing the level of theory for a construct(e.g., assessing employee competencies at thefirm level; Gerhart, 2005), (2) ignoring the effectsof context (e.g., not realizing that the value ofKSAOs is affected by the firm’s strategy; Barney,1991), and/or (3) assuming that the findings fromone level apply to other levels (e.g., believingthat hiring better employees always contributesto firm effectiveness; Ployhart, 2004).

Single-Level Human Capital Research

Armed with even this admittedly brief over-view of multilevel theory, one can observe thatthe majority of human capital research hastaken a single-level approach (Hitt, Beamish,Jackson, & Mathieu, 2008; Wright & Boswell,2002). Not surprisingly, differences in the microliterature and macro literature on human capi-tal correspond to differences in the undergirdingscholarly disciplines. The micro perspective isgenerally found in the HR literature, OB litera-ture, and I/O literature, and it draws mainlyfrom psychology (e.g., Spearman, 1927) or eco-nomics (e.g., human capital theory; Becker, 1964).Microlevel scholars define human capitallargely in terms of individual differences inKSAOs (e.g., general intelligence, personality).These individual KSAOs are, in turn, linked toindividual-level outcomes (e.g., performance,turnover; Wright & Boswell, 2002). Empirically,micro scholarship tends to measure broad andcontext-generic individual KSAOs (e.g., cogni-tive ability, personality) directly by administer-ing tests of these constructs.

In contrast, the macro perspective is articu-lated in the strategy literature and organization-al theory literature, which focus primarily onhuman capital as a unit-level resource that cancontribute to sustained competitive advantage(Coff, 1997, 1999; Mahoney & Pandian, 1992;Wright, McMahan, & McWilliams, 1994). Macroscholarship emphasizes the context- or firm-specific nature of the human capital resource(e.g., Coff, 2002; Felin & Hesterly, 2007; Hitt, Bier-man, Shimizu, & Kochhar, 2001). Work in thistradition tends to study human capital at theunit level and to equate it with the aggregateknowledge, skill, or experience in the organiza-tion. In macro research these conceptualizationsof human capital are frequently measured withmanagerial self-reports (e.g., Hatch & Dyer, 2004;Wiklund & Shepherd, 2003), proxy measures(e.g., Hitt et al., 2001), or counts of theoreticallydesirable human resources (e.g., Kor & Leble-bici, 2005).

Thus, both the micro and macro human capi-tal literature are largely single level (individualor unit), and within each literature the level oftheory and level of measurement have generallybeen conceptualized at the same level of orga-nizational analysis. This single-level perspec-tive so dominates both approaches that theyoffer little guidance for each other (Wright &Boswell, 2002). Our purpose is not to criticize thisprior research—indeed, it has generated manyimportant insights. Rather, we only note thatmanagement scholars are left with a piecemealand incomplete understanding of the humancapital resource’s foundations, creation, andcontent across organizational levels. Both themicrolevel literature and macrolevel literaturehave contended with the shortcomings inherentin their single-level approaches by adopting ahost of assumptions. Unfortunately, these cross-level assumptions may not be warranted andcould very well be multilevel fallacies (Klein,Dansereau, & Hall, 1994; Rousseau, 1985; Simon,1973). We suggest four areas where this defi-ciency is manifest (Table 1).

First, the microlevel literature says little abouthow individual KSAOs lead to firm performance.Here, researchers assume that a relationship be-tween individual KSAOs and unit-level perfor-mance exists, but there is little theory to directlysupport this association (Harris, 1994; Schneider,Smith, & Sipe, 2000). Moreover, the microlevelliterature says very little about the mechanisms

2011 129Ployhart and Moliterno

driving the relationship between individualKSAOs and unit-level performance.

Second, and relatedly, the micro literatureadopts a “universalistic” perspective: KSAOssuch as cognitive ability and personality areexpected to relate positively to individual per-formance across most occupations and contexts(Schmidt & Hunter, 1998). The consequence is a“more is better” approach, assuming that if aKSAO is related to an individual’s performanceon the job, then greater aggregations of thatKSAO will add value to the firm (Schmidt &Hunter, 1998). Paradoxically, the macrolevel lit-erature suggests this is unlikely to be true andadopts a contingency approach to the value ofhuman capital resources (Barney, 2001). That is,human capital is only thought to be a valuableresource that contributes to unit-level perfor-mance and associated competitive advantage(Barney, 1991) when it is relatively unit specific(Barney & Wright, 1998).

Third, the macro literature generally recog-nizes only a very narrow range of individual-level attributes as a relevant source of human

capital—namely, unit-specific skill, experience,and knowledge. Yet such a perspective ignoresthe rigorous research on individual differencesconducted at the micro level (e.g., cognitive andnoncognitive KSAOs).

Finally, notwithstanding the first steps at un-derstanding the “microfoundations” of strategy(Felin & Hesterly, 2007; Teece, 2007), the mac-rolevel literature assumes it is possible to mea-sure human capital at the unit level with prox-ies, rather than assess attributes of individualemployees directly. Consequently, this litera-ture says little about where the human capitalresource originates, how it is created, and how itis transformed.

The Strategic Value of Creating HumanCapital Resources

It is important to pause and ask a fundamen-tal question: Why, from an organizational per-spective, is it important to develop a multilevelmodel describing how unit-level human capitalis created? The answer to this question rests in

TABLE 1Prototypical Characteristics and Key Assumptions of Micro and Macro Human Capital Research

Level ofTheory

DisciplinaryTradition Key Assumptions Potential Multilevel Fallaciesa

Micro (HR,OB, I/Opsychology)

Differentialpsychology

● Assumption 1: Individual differencesaffect the firm. More is better, sofirms with more talented employeeswill outperform firms with lesstalented employees (there are nodiminishing returns on talent).

● Cross-level fallacy by assuming individual-levelfindings generalize to the firm level

● Assumption 2: Some KSAOs arealways valuable. Overall cognitiveability and conscientiousness arevaluable and important for all jobs.

● Contextual fallacy by ignoring macro findingsshowing that the value of human capitalresources is context specific; cross-level fallacyby assuming individual-level findingsgeneralize to the firm level

Macro(strategy)

Economics ● Assumption 3: Human capital iscomposed of knowledge, skill,experience, and/or education.

● Cross-level fallacy by ignoring the manycognitive and noncognitive variations ofindividual differences found in the microliterature

● Assumption 4: Human capital existsat the firm (or unit) level and can bemeasured at that level (i.e., there islittle attempt to theorize or testwhether and how aggregatingindividual KSAOs to create firm-level human capital is warranted).

● Misspecification fallacy by neglecting toconsider how individual-level KSAOs emerge toform a new unit-level human capital construct;cross-level fallacy by assuming firm-levelmeasures of human capital adequatelyrepresent the KSAOs of employees and byassuming all employees within the firmmanifest identical human capital scores

a Our labeling of these fallacies is from Rousseau (1985).


the resource-based view (RBV) of the firm (Grant,1991; Penrose, 1959; Rumelt, 1984; Teece, 1982;Wernerfelt, 1984), which argues that the firm’sresources can be a source of competitive advan-tage (Barney, 1991; Mahoney & Pandian, 1992)and economic value creation through the gener-ation of sustainable rents (Barney, 1986; Lipp-man & Rumelt, 2003; Mahoney, 2001; Peteraf,1993). This perspective has been applied to hu-man capital in particular (Barney & Wright,1998; Boudreau & Ramstad, 2005; Wright, Dun-ford, & Snell, 2001; Wright et al., 1994). Takentogether, this body of research suggests thathuman capital is a particular class of resourcethat can be a significant driver of unit-levelperformance. Moreover, the firm’s relativecompetency in managing its resources shouldlikewise be a driver of competitive advantage(Mahoney, 1995; Makadok, 2001; Sirmon, Hitt, &Ireland, 2007).

Shifting our theoretical focus from humancapital as a resource that the organization pos-sesses to the process through which human cap-ital resource emerges from individual KSAOs,we draw on theoretical insights from twostreams in the recent macrolevel scholarly liter-ature. First, a number of scholars have notedthat a full understanding of macrolevel con-structs requires an understanding of their “mi-crofoundations” or “subsystems” (Abell et al.,2008; Felin & Hesterly, 2007; Teece, 2007; andsee Wright et al., 2001, for related points). Workin this area shows that firm-level theoreticalconstructs and phenomena are created andshaped by lower-level psychological and be-havioral mechanisms. Inasmuch as the RBV isa central theoretical perspective on firm-levelcompetitive advantage, the definition of hu-man capital that we have offered—whichidentifies the origins of unit-level human cap-ital resource in individual-level KSAOs—aligns with, and is partly motivated by, schol-arship on microfoundations.

Second, researchers developing the dynamiccapabilities view (DCV) of the firm (Eisenhardt& Martin, 2000; Helfat et al., 2007; Teece, 2007;Teece et al., 1997) have defined dynamic capa-bilities as “the capacity of [the] organization topurposefully create, extend, or modify its re-source base” (Helfat et al., 2007: 4), and schol-ars have successfully leveraged the DCV withrespect to human resources (Wright et al., 2001;Wright & Snell, 1998). A central proposition of

the DCV perspective is that the organization’sresource base and the processes throughwhich it is created change in response to en-vironmental changes (Eisenhardt & Martin,2000; Maritan & Peteraf, 2007; Teece, 2007). Thisconceptual insight directly implies that thenature of the organization’s task— how andwhy the organization manages resources theway it does—is motivated by the environmen-tal context in which the organization operates(Barney, 2001). Succinctly put, organizations“create great value by assembling particularconstellations of assets inside an enter-prise . . . [to] produce . . . goods and servicesthat consumers want” (Helfat et al., 2007: 23).This idea is at the core of the model we de-velop next: the emergence of human capital isa process of “assembling” a valuable unit-level resource. Thus, we essentially parame-terize the microfoundations of an importantdynamic capability.

A MULTILEVEL MODEL OF HUMAN CAPITALRESOURCE EMERGENCE

We have defined human capital as a unit-level resource that is created from the emer-gence of individuals’ KSAOs, and we depict themultilevel model of human capital resourceemergence in Figure 1. It is important to recog-nize at the outset that the model and definitiondeviate substantially from existing human cap-ital theory and research. Unlike prior microleveland macrolevel research assuming relation-ships at one level generalize to other levels, ourmodel and definition explicate the nature ofthese cross-level relationships to explain howhuman capital resources are created andemerge from lower-level KSAO origins. Indeed,the definition of human capital resources explic-itly recognizes its cross-level and emergentnature.

Recalling that Kozlowski and Klein describe“a phenomenon [as] emergent when it origi-nates in the cognition, affect, behaviors, or othercharacteristics of individuals, is amplified bytheir interactions, and manifests as a higher-level, collective phenomenon” (2000: 55), we or-ganize our discussion of the multilevel model ofhuman capital emergence into three parts. First,we draw from the work of differential psychol-ogy to define the origins of human capital (i.e.,the KSAO box at the bottom of Figure 1). These


KSAOs include both generic and specific forms,representing cognitive and noncognitive do-mains. Second, we illuminate how KSAOs arecombined and amplified by integrating theoret-ical processes described in the scholarship ongroups and teams, which describes the “com-plex dynamic systems that exist in a context,develop as members interact over time, andevolve and adapt as situational demands un-fold” (Kozlowski & Ilgen, 2006: 78). Central to thispart of the model (the center of Figure 1) is theemergence enabling process, which comprisesthe complexity of the unit’s task environmentand emergence enabling states. Third, we con-sider the nature of the collective unit-level hu-man capital resource that emerges as a functionof these amplifying processes. As describedabove, this resource can be a source of compet-itive advantage under certain conditions(Wright et al., 1994), but the process of emer-gence we describe suggests that existing mac-rolevel conceptualizations of the content of“valuable” human capital resources may beoverly narrow.

Origins of Human Capital Resources:Individual-Difference KSAOs

We begin with the conceptually simplest, butperhaps theoretically most significant, compo-nent of the model. We have defined the humancapital resource as originating in the individu-al-level KSAOs of employees who make up theunit. Therefore, the roots of human capital lie atthe individual level and exist in the full range ofemployees’ KSAOs (bottom of Figure 1). This is,of course, the assumption of most of the mac-rolevel research we outlined above, but themodel we describe draws on the considerablemicrolevel research that parameterizes and val-idates this assumption.

Conceptually, this observation is consistentwith the current “microfoundations project” inthe strategic management literature, which ar-gues that “substantial attention be paid to ex-planatory mechanisms that are located at the . . .level of individual action and (strategic) interac-tion” (Abell et al., 2008: 489). This recent theoret-ical stream has suggested that we can gain trac-

FIGURE 1The Multilevel Model of Human Capital Resource Emergence

Unit-leveloutcomes

Sustainable competitive advantage

Unit-levelhuman capital resource

Contextspecific

Contextgeneric

Individual-difference KSAO characteristics

Cognitive vs. noncognitive Context generic vs. context specific

Emergenceenabling

states

Behavioral Cognitive Affective

Simple Complexity of task environment Complex

Emergence enabling process


tion by moving past the firm—or “collectivist”—level of analysis when considering valuecreation and competitive advantage and focus-ing instead on “the role individuals play” (Felin& Hesterly, 2007: 212; see also Fulmer, Gerhart, &Scott, 2003; Gerhart, 2005; Lepak, Smith, & Taylor,2007; Schneider, 1987). In this way, by focusingon the individual-level KSAOs that lie at thefoundation of the unit-level human capital re-source, our model aligns with this effort to pro-vide greater insight into where valuable organi-zational resources originate and how they areconstructed. While microlevel scholars mayfind this “development” in the macro literatureobvious, it is important to note that when mod-eling aggregate constructs, macrolevel re-search generally favors unit-level proxies overindividual-level parameterizations, whichNewbert (2007) suggests has been driven bythe relative ease of the associated data collec-tion (see Felin & Hesterly, 2007, for a relatedand thoughtful discussion).

Thus, extending the work of Wright et al.(1994), we propose that human capital has itsorigins in the full range of individual-levelKSAOs. Any serious study of human capitalmust understand the KSAOs of the employees inquestion. To understand how different this con-ceptualization of human capital’s origins mightbe for scholars working in the macro tradition,consider three examples: Pennings, Lee, andvan Witteloostuijn (1998) employ firm-level aver-ages of organizational and industry tenure asproxies of human capital in a study of organiza-tional survival among Dutch accounting firms;Westhead, Wright, and Ucbasaran (2001) opera-tionalize gender, cultural background, and edu-cational level as measures of an entrepreneur’shuman capital; and Hatch and Dyer (2004) relyon managerial estimations of the organization’shuman capital endowment. Proposition 1, then,is extremely consequential, particularly in thecontext of the existing body of macrolevel hu-man capital research. Fully understanding hu-man capital—including its microfoundations—requires an integration of psychologicalresearch on individual-difference KSAOs.

Proposition 1: The origins of humancapital resources exist in the fullrange of KSAOs of employees withinthe unit.

Because human capital resources originate inthe KSAOs of individuals, one must necessarilybegin with an understanding of those individualKSAOs. There is a large body of psychologicalliterature on individual KSAOs, over a centuryold, comprising many distinctions and types ofKSAOs. As a means of summarizing this exten-sive literature, we compare and contrast thecontent of individual-difference KSAOs in termsof whether they are (1) cognitive versus noncog-nitive and (2) context generic versus context spe-cific (Ackerman, 1996; Ackerman & Heggestad,1997; Lubinski, 2000; Schmitt, Cortina, Ingerick, &Wiechmann, 2003). To facilitate application ofthese ideas to the model we describe, Table 2provides an overview and summary of the con-tent of individual KSAOs.

The first distinction, between cognitive andnoncognitive KSAOs, recognizes the long-knowndifference between what a person “can do” (cog-nitive KSAOs) and what a person “will do” (non-cognitive KSAOs; Cronbach, 1949). Of the fourmajor types of cognitive KSAOs—general cog-nitive ability, knowledge, skills, and experi-ence—most microlevel research has focused ongeneral cognitive ability because it is the stron-gest predictor of educational attainment andsuccess, job performance, promotion rates, andsalary (Carroll, 1993; Gottfredson, 1997; Jensen,1998; Schmidt & Hunter, 1998). Importantly, thosewith greater general cognitive ability learnfaster, benefit more from experience, and ac-quire knowledge more quickly and deeply(Jensen, 1998). Of the four cognitive KSAOs, onlygeneral cognitive ability is stable throughoutadulthood and, hence, is not affected by ad-vanced education or experience.

The three types of noncognitive KSAOs—personality, values, and interests (see Kanfer,1990)—comprise such personal characteristicsas conscientiousness and preferences for differ-ent educational majors and professional occu-pations. Noncognitive KSAOs are stable throughadulthood (Kanfer, 1990) and, as a result, exert alifelong impact on the types of situations andexperiences one chooses to engage in and thekinds of social relationships one develops andmaintains.

The second distinction, between context-generic and context-specific-KSAOs, recognizesthat KSAOs differ in terms of their malleabilityand context specificity. This is not unlike thedistinction in macrolevel research between


firm-specific and generic human capital re-sources (Barney & Wright, 1998; Hatch & Dyer,2004), except that in micro research many differ-ent types of KSAOs (i.e., beyond knowledge) areconsidered as having relatively more or lesscontext specificity. Cognitive ability, personal-ity, values, and interests are context-genericKSAOs because they are relatively stable andendure across time and situations (Jensen, 1998;Kanfer, 1990); hence, they are determinants ofperformance in many different tasks and firms(Barrick & Mount, 1991; Schmidt & Hunter, 1998).Skills may be context generic when they are tiedto broad domains (e.g., social skills) or contextspecific when they are tied to narrow domains(e.g., skill in navigating a firm’s political nuances).Knowledge and experience may also be eithercontext generic (e.g., knowledge of accountingprinciples) or context specific (e.g., knowledgeof a client’s specific accounting situation).

Given this fundamental variation in the na-ture of KSAOs, it is erroneous and potentiallymisleading to refer to the human capital re-source as if all types of human capital were the

same. Rather, human capital should be definedin terms of content (cognitive human capital ver-sus noncognitive human capital) and specificity(context-generic human capital versus context-specific human capital). These observationssuggest that prior macrolevel research on hu-man capital, which emphasizes firm-specific ex-perience, skills, and knowledge, has consideredtoo narrow a range of human capital content: thehuman capital resource can emerge from theaggregation of a much broader array of individ-ual-level KSAOs. Consequently, the nature ofthe unit-level human capital resource is muchmore multifaceted, and, as a result, theory build-ing and empirical testing can become moreprecise.

Proposition 2: The content of humancapital resources may be cognitive(general cognitive ability, knowl-edge, skills, and experience) or non-cognitive (personality, values, andinterests) and context generic or con-text specific.

TABLE 2Individual-Difference KSAO Domains

Cognitive KSAOs (“Can Do”) Noncognitive KSAOs (“Will Do”)

● General cognitive ability (general mental ability,intelligence, or g) represents KSAOs that involve thecomprehension, manipulation, retention, and creationof information (Jensen, 1998). It is relatively stablethroughout adulthood and the strongest predictor ofeducational and occupational outcomes (Carroll, 1993;Gottfredson, 1997; Jensen, 1998; Schmidt & Hunter, 1998).

● Knowledge is an understanding of principles, facts,and processes. Knowledge can range from generic tospecific (e.g., knowledge of accounting to knowledge ofhow to use a particular firm’s accounting software). It isusually clustered within domains such as thoselearned through formal education (e.g., accounting)and/or experience.

● Skills represent a capacity to learn more information orlearn information more quickly (e.g., study skills,reading skills). They are tied to generic domainsreflecting much of what is learned through formaleducation or experience (e.g., problem solving, socialinteractions).

● Experience is a multifaceted construct that reflects anopportunity to learn and transfer knowledge fromgeneric to job and firm specific. There are multipletypes of experience (e.g., job, firm) that vary in terms ofamount, time, and type (Quinones, Ford, & Teachout,1995).

● Personality refers to a set of traits, generally stablethroughout adulthood, that direct and maintainconsistency in behavior. The Five Factor Model (FFM) ofpersonality (McCrae & Costa, 1996) is dominant andincludes emotional stability (resistance to anxiety andstress), extraversion (dominance, social striving),openness to experience (desire to learn and experiencenew things), agreeableness (empathy and desire to getalong with others), and conscientiousness (dependability,achievement, reliability).

● Interests and values are stable throughout adulthoodand represent an individual’s preferences for certaintypes of work. The best example of this individual-levelnoncognitive attribute is Holland’s RIASEC model (1997),which notes that people choose occupations that fit theirinterests and values.


Proposing that the human capital resourceoriginates in the KSAOs of individual employ-ees does not mean that the unit-level humancapital resource is identical, conceptually orempirically, to those individual KSAOs. In mul-tilevel theory the term isomorphism is used todescribe those situations where higher- and low-er-level constructs share some common featuresyet are conceptually and empirically distinct(Chan, 1998). It is extremely rare for higher- andlower-level constructs to be perfectly isomorphic;rather, partial isomorphism is the norm (see Chan,1998, and Kozlowski & Klein, 2000).

We propose that individual KSAOs and hu-man capital resources will likewise be partiallyisomorphic. To understand why, it is necessaryto recognize that the determinants that createthe human capital resource are different fromthe determinants that create KSAOs. The deter-minants of individual KSAOs are largely genet-ics and the person’s environment (Lubinski,2000), whereas the determinants of human cap-ital resources are contextual in nature. A simpleexample helps illustrate the point. Considerhow the cognitive ability of a given employee islargely determined by early childhood environ-ment and genetics (Jensen, 1998). However, atthe unit level the human capital resource is con-structed and reconstructed via the repeated ag-gregation (e.g., staffing and turnover cycles) ofemployees with relatively fixed levels of cogni-tive ability (Hatch & Dyer, 2004). As a result,while one individual’s cognitive ability does notchange, a unit’s cognitive ability human capitalwill change over time. More generally, humancapital resources are changeable and mallea-ble because they are based on the aggregationsof individual KSAOs, whereas individualKSAOs may or may not be changeable and mal-leable. The consequences of this insight are fun-damental to the model because they suggestthat researchers cannot assume that findingsfrom one level generalize to other levels.

What, then, occurs during the emergence pro-cess that results in a unit-level human capitalresource that is only partially isomorphic withthe individual-level KSAOs from which it origi-nates? Bliese calls the process through whichpartial isomorphism occurs “fuzzy composition,”noting that “the main difference between a low-er-level and an aggregate-level variable infuzzy composition models is that the aggregatevariable contains higher-level contextual influ-

ences that are not captured by the lower-levelconstruct” (2000: 369 –370; emphasis added).Thus, the notion of contextual influences on theemergent human capital resource provides theanswer to the question of why partial isomor-phism occurs. In the next section we introducethe emergence enabling process as the locus ofthe intermediary mechanisms that result in anemergent unit-level human capital resource thatis partially isomorphic with the individual-levelKSAOs at its origins.

Proposition 3: Human capital re-sources and individual KSAOs arepartially isomorphic because theyhave different antecedents.

Amplification of KSAO Content: TheEmergence Enabling Process

We now turn our attention to the question ofhow individual KSAOs are “amplified by theirinteractions” (Kozlowski & Klein, 2000: 55). Wepropose that the emergence enabling process isthe means by which individual KSAOs aretransformed into valuable unit-level human re-sources. This process consists of a relationshipbetween two interrelated components (center ofFigure 1). The first component is the complexityof the unit’s task environment, or the degree towhich the unit’s tasks require interdependenceand coordination among members. While thisrelates to the dynamism of the environmentalcontext in which the unit operates (Eisenhart &Martin, 2000), we conceptualize the complexityof the unit’s internal task environment as con-sisting of four dimensions: temporal pacing, dy-namism of the task environment, strength ofmember linkages, and workflow structure (Bell& Kozlowski, 2002). The second component com-prises the unit’s emergence enabling states andconsists of the unit’s behavioral processes, cog-nitive mechanisms, and affective psychologicalstates (Kozlowski & Ilgen, 2006). Simply put,emergence enabling states describe how unitmembers act, think, and feel.

This part of the model recognizes the impor-tance on human capital emergence of both de-mands in the task environment (task complexity)and social/psychological processes and states(emergence enabling states) that are mobilizedto respond to those task demands. The two com-ponents are interrelated. The complexity of the


task environment influences the nature of thebehavioral, cognitive, and affective emergenceenabling states (Ilgen, Hollenbeck, Johnson, &Jundt, 2005; Kozlowski & Bell, 2003; Kozlowski &Ilgen, 2006; Marks, Mathieu, & Zaccaro, 2001),but, as we will discuss, over time the emergenceenabling states can also influence how thetasks are structured.

Complexity of the task environment. The firstcomponent of the emergence enabling processconcerns the overarching complexity of theunit’s task environment.2 The literature on work-groups and teams (for comprehensive reviewssee Ilgen et al., 2005, and Kozlowski & Ilgen,2006) has identified how “team members com-bine their individual resources, coordinatingknowledge, skill, and effort to resolve task de-mands” (Kozlowski & Ilgen, 2006: 81). It has longbeen recognized that collective phenomenaemerge in team settings because the nature ofthe team’s tasks and workflow requires teammember coordination, interdependence, and in-teraction (see Bell & Kozlowski, 2002; Marks etal., 2001; McGrath, 1984; Steiner, 1972; Thompson,1967; Van de Ven, Delbecq, & Koenig, 1976). Ac-cordingly, we draw on insights from the teamsliterature to consider how four distinct dimen-sions of unit task complexity affect the emer-gence of unit-level human capital resourcesfrom individual-level KSAOs.

The first dimension of task complexity con-cerns the temporal pacing of unit members asthey perform their various tasks (Fleishman &Zaccaro, 1992; Marks et al., 2001). Asynchronouspacing means that unit members complete theirtasks at different points in time (e.g., sharinginformation over email), whereas synchronouspacing means that unit members must coordi-nate their behavior to perform the task (e.g.,face-to-face interaction). The second dimensioncaptures the dynamism of the task environment.Static environments mean the tasks are stableand relatively unchanging, whereas dynamicenvironments are highly fluid and marked bychange and uncertainty (Kozlowski, Gully, Na-son, & Smith, 1999). Importantly, the dynamism

of the task environment impacts processes em-bedded in organizational resource creation andreconfiguration (Eisenhardt & Martin, 2000;Teece, 2007). The third dimension of task com-plexity is the strength of member linkageswithin the unit. Weak linkages mean that thereis little need for unit members to know or com-municate with each other, whereas strong link-ages mean unit members have detailed and richinteractions and hold intricate information andknowledge of each other (Ancona & Chong,1996).

The fourth dimension of task complexity con-cerns the unit’s workflow structure. There arefour basic forms for the unit’s workflow struc-ture—pooled, sequential, reciprocal, and inten-sive (Bell & Kozlowski, 2002; Van de Ven et al.,1976)—that align with increasing levels of tem-poral pacing, environmental dynamism, andstrength of member linkages. Pooled workflowstructures are based on the simple addition ofindividual team members’ inputs. The unit taskenvironment is static, workflow pacing amongindividuals is asynchronous, and linkagesamong employees are weak. An example is atug-of-war contest where every member mustonly pull in the same direction. Sequential work-flow structures require temporal sequencing ofunit member interactions such that one mem-ber’s output becomes the next member’s input(i.e., unidirectional linkages among unit mem-bers). A simple example is fast food restaurantswhere employees working different functions(e.g., staffing the cash register, grill, fry station,and drink fountain) must work collaboratively,but sequentially, to service customers in an ef-ficient and quality manner (Kacmar, Andrews,Rooy, Steilberg, & Cerone, 2006). Reciprocalworkforce structures build from sequential, butthe flow of inputs and outputs can go forward orbackward. The task environment is more dy-namic since the workflow is bidirectional, creat-ing stronger linkages among employees. A fa-miliar example of a reciprocal structure iscoauthors who iteratively pass drafts of a manu-script back and forth to each other. Finally, in-tensive workflow structures require the greatestamount of synchronization, pacing, and coordi-nation. Here team members work simulta-neously, collaboratively, and interactively andmust adapt to each other’s behavior. The taskenvironment is also dynamic, and the workflowrequires multidirectional linkages among em-

2 Hereafter, we refer to the complexity of the unit’s taskenvironment more simply as task complexity. We do so onlyfor the sake of brevity but emphasize that units often performmultiple tasks and so the term task complexity should betreated as a comprehensive view of the complexity of theunit’s task environment.


ployees. An example is an emergency roommedical team providing trauma care on apatient.

Together, these four dimensions create a con-tinuum of unit task complexity. Simple unittasks require little need to synchronize memberinteractions, the task environment is static, thelinkages among team members are weak, andthe workflow is pooled. At the other end of thecontinuum, complex team tasks create intensiveworkflows and require close temporal synchro-nization where members must carefully pacetheir actions with other team members, adjusttheir behaviors to those of other members, andoperate in a dynamic task environment. Thelinkages among team members are strong andresult in considerable shared information.

The four dimensions of the unit’s task com-plexity are expected to directly influence whichspecific KSAOs may emerge into a human cap-ital resource. For example, the task complexityof customer service in a retail discount store islower than the task complexity of a top manage-ment team (e.g., sequential versus intensiveworkflows). Therefore, given the nature of thetask demands, human capital resource emer-gence may be primarily limited to noncognitiveKSAOs in the retail organization (Ployhart,Weekley, & Ramsey, 2009), whereas human cap-ital resource emergence may occur for both cog-nitive and noncognitive KSAOs in the top man-agement team (Hambrick & Mason, 1984;Wiersema & Bantel, 1992). Likewise, the taskcomplexity for retail employees may requireshared knowledge while the task complexity fora top management team will require bothshared knowledge and distributed expertise.

It is noteworthy that as task complexity withinthe emergence enabling process increases, sodoes the inimitability (Barney, 1991) and, thus,the unit-level value of the emergent human cap-ital resource. Drawing on seminal insights byDierickx and Cool (1989), we observe first thatincreasing task complexity increases the pathdependency within emergence processes. Sec-ond, the social complexity of the human capitalresource increases as the linkages among em-ployees become stronger and more synchro-nized. Finally, causal ambiguity increases withtask complexity because the relationships andlinkages among employees and resources be-come more bidirectional and multiplicative.

However, to fully understand the influence ofunit task complexity on the emergence of valu-able human capital resources, we must considerthe second component of the emergence en-abling process—namely, the emergence en-abling states. This is because the unit’s taskcomplexity influences the form of human capitalresource emergence via its influence on theunit’s behavioral, cognitive, and affective states.The specific content of the unit’s task is clearlyimportant, but critical for understanding the pro-cesses underlying human capital resource emer-gence are the interrelationships between thetask environment and the unit’s behavioral, cog-nitive, and affective states. Accordingly, we nowturn our attention to these important emergenceenabling states.

Emergence enabling states. There are threebroad classes of emergence enabling states: be-havioral, cognitive, and affective.3 Together,these states establish the social environmentthat facilitates and supports the emergence ofhuman capital resources (cf. Kozlowski & Ilgen,2006). As a result, the unit’s task complexity isnecessary, but not sufficient, to determine thenature of the emergent human capital resource.Indeed, if the behavioral, cognitive, and affec-tive enabling states are not present and/oraligned with the task environment, then a valu-able human capital resource will not emerge(Barney, 2001).

Borrowing Hackman’s (1976) language, emer-gence enabling states are the “glue” that bindsunit members together and allows their interac-tions through the task environment to amplifyand transform KSAOs into a unique, unit-levelhuman capital construct. In this way we think ofemergence enabling states as conceptually re-lated to social capital (Adler & Kwon, 2002) in-asmuch as we are concerned with the interper-sonal relational space that is created in the unittask environment. However, our use of the qual-ifier “enabling” is intentional to recognize thatthese states must exist in some form if humancapital resource emergence is to occur in a man-ner valuable for the unit. These three emergenceenabling states represent the highest order ofabstraction, but there are numerous specific

3 Some (e.g., Marks et al., 2001) refer to unit member be-haviors as processes rather than states. We appreciate thisdistinction but for simplicity refer to these behavioral pro-cesses as emergence enabling states.


manifestations of these states that may be rele-vant to specific situations and tasks. We de-scribe each set of emergence enabling statesseparately: we first describe the respectivestate, and we then consider how it interrelateswith the unit’s task complexity; we conclude bydiscussing how the states are interconnected.

Behavioral processes represent the coordina-tion, communication, and regulatory processesthat make individuals’ behavior interdependent(Hackman, 1987; Kozlowski & Ilgen, 2006). Whiletask complexity represents the demands of theunit task environment, behavioral processes arethe actual behavioral actions of members work-ing to fulfill the demands of the task environ-ment. For example, high task complexity maycreate an intensive workflow structure, but ifunit members fail to coordinate or choose not tocommunicate, then the unit will not effectivelymeet the demands of the task situation. Themanner in which the unit coordinates its mem-bers and fosters communication among them inresponse to task demands leads individualKSAOs to become increasingly similar or com-plementary (Ilgen et al., 2005; Kozlowski & Ilgen,2006). Unit adaptation and regulation representthe monitoring, adapting, and regulating of unitmember behavior in relation to the unit’s taskand other unit members’ actions (Fleishman &Zaccaro, 1992; Marks et al., 2001).

Task complexity will dictate how unit mem-bers will coordinate, communicate, and regulatetheir behavior (Bell & Kozlowski, 2002; Kozlowskiet al., 1999; McGrath, 1984; Steiner, 1972). At lowlevels of task complexity, unit members needonly a minimal amount of coordination to per-form effectively, and there is little need to syn-chronize member behavior. Communicationmay occur asynchronously, member ties areweak, and the static nature of the task environ-ment requires little need for members to adaptto each other’s actions. But human capital re-source emergence can occur even at this lowlevel of task complexity since simply by being amember of the unit individuals are exposed tosimilar experiences, socialization, training, andinformal interactions (Kozlowski & Klein, 2000).4

In this pooled workflow structure the human

capital resource that will emerge will be primar-ily characterized by similarity among the basicKSAOs needed to perform the task.

At higher levels of task complexity, effectivecompletion of the unit’s task requires a greaterlevel of unit members’ behavioral synchroniza-tion and coordination. As complexity increases,the dynamic nature of the task environment de-mands detailed, two-way communicationamong members. Further, members are closelyconnected and must carefully monitor andadapt to changes in each other’s behavior. Inthis intensive workflow structure human capitalresource emergence will occur not only basedon similarity among the individual KSAOsneeded to perform the task but also based onother complementary types of KSAOs needed forcommunication, coordination, and adaptation.That is, highly complex tasks may simulta-neously contribute to homogeneity among someKSAOs but heterogeneity among others. For ex-ample, the highly complex nature of an emer-gency room setting requires that members coor-dinate, communicate, and regulate in a mannerthat creates both homogeneity in KSAOs (e.g.,shared knowledge of basic operating proce-dures) and heterogeneity in KSAOs (e.g., supportstaff skill in adapting to the surgeon’s skill andbehavior, surgeon’s ability to coordinate andcommunicate with staff having distributed ex-pertise; Klein, Ziegert, Knight, & Xiao, 2006). Atthe highest level of task complexity, if unit mem-bers fail to coordinate, communicate, or regulateeffectively, then a valuable human capital re-source cannot emerge from individual KSAOs.

Proposition 4a: Unit task complexityinfluences the types of behavioralemergence enabling states mani-fested in the unit.

Proposition 4b: As task complexity in-creases, human capital resources aremore likely to emerge if the unit man-ifests appropriate behavioral states.

Cognitive states are the second of the emer-gence enabling states; these refer to the unit’sclimate, memory, and learning (e.g., Hinsz, Tin-dale, & Vollrath, 1997). The first—unit climate—reflects the members’ shared perceptions of theunit’s leadership, goals, expectations, and whatis valued and rewarded (Rentsch, 1990). Re-search has shown that there are different types

4 Indeed, organizational theorists have documented com-plex behavioral systems in the presence of low task com-plexity (e.g., Roethlisberger & Dickson, 1939).


of climates (e.g., climate toward service, climatetoward diversity) that not only influence unit-level outcomes but also serve as norms to createhomogeneity among members’ KSAOs (e.g.,Schneider, White, & Paul, 1998). Unit climate es-tablishes the norms through which unit mem-bers interact and communicate (Rentsch, 1990)and also helps assimilate new members into theunit more quickly and consistently than if theunit lacked such a climate (a contextual influ-ence on emergence). Unit climate becomes es-pecially critical as task complexity increases.Successful member interactions in intensiveworkflow structures require that members shareexpectations for the synchronization, pacing,and quality of their work (Bell & Kozlowski,2002). For example, developing a climate forsafety has been shown to reduce accidents inflight crews and medical intensive care unitsbecause members are more willing to admit andimprove upon mistakes (Sexton, Thomas, &Helmreich, 2000 ). Simultaneously, the complex-ity of the unit task contributes to the strength ofclimate perceptions because the greater amountof interaction among members allows more op-portunity for expectations to be communicatedand, hence, shared.

The second cognitive state—unit memory—represents the procedural and declarativeknowledge held by unit members that is neces-sary for them to work together effectively. Orga-nizing, managing, and integrating knowledgeare core strategic activities of the firm (Grant,1996; Youndt & Snell, 2004). One form of collec-tive memory is based on shared memories—forexample, unit mental models where membershave intimate knowledge of each other andwork processes (Klimoski & Mohammed, 1994).As unit members work together, their individualknowledge about each other and the task be-comes more similar, and this similarity leads tothe emergence of a unit-level phenomenon. In-creasing task complexity contributes to and, inturn, requires a greater exchange of knowledgeamong members. For example, the task de-mands for a sequential workflow require thatmembers know only the processes that immedi-ately lead to and follow from their own work; thetask demands for an intensive workflow requirethat members know the processes and relation-ships among all members within the unit.

A different form of collective memory is trans-active memory—for example, when team mem-

bers do not have shared knowledge but insteadknow who has each form of relevant knowledge(e.g., who on the faculty is good with statistics;Wegner, 1995). Here, individual memory aboutthe unit task is not shared, but there is a macroknowledge architecture that helps coordinateindividual member expertise and organization-al structures to facilitate the integration of suchknowledge (Grant, 1996; Youndt & Snell, 2004).The intensive interaction and stronger memberties associated with more complex unit taskscontribute to strengthening unit transactivememory. Indeed, transactive memory is argu-ably not needed for the emergence of humancapital resources in simple task (pooled work-flow) structures, but as complexity increases,the dynamic nature of the task environment willrequire that members know to whom to turn forexpertise. Note that to the extent unit transactivememory or unit mental models exist, they alsocreate a form of unit-specific knowledge. That is,unit transactive memory or unit mental modelsare inherently tied to the specific members ofthe unit and the task being performed.

The third cognitive state— unit learning—represents the unit’s ability to acquire, absorb,and transfer information and knowledge (Ar-gote, McEvily, & Reagans, 2003; Cohen &Levinthal, 1990; Zahra & George, 2002). Morecomplex tasks lead to the facilitation of learningopportunities and, hence, human capital re-source emergence because the members en-gage in more frequent, coordinated, and recip-rocal communication and interaction (Youndt &Snell, 2004). The passage of tacit knowledge ismost likely when members have frequent inter-action in the unit’s task environment (Liebes-kind, 1996). The greatest opportunity for humancapital resource emergence will occur with re-ciprocal and intensive workflow structures be-cause the reciprocal nature of member interac-tions requires and facilitates the social capital(Adler & Kwon, 2002) necessary to transferknowledge and information. This greater inten-sity of interaction helps knowledge and infor-mation transfer more quickly and widelythrough the unit. Further, as the strength anddensity of the member ties increase, knowledgegained by one member is quickly disseminatedto the unit. For example, in a project team amember may receive training on a new softwaresystem. This member may then teach the unithow to use the software so that the unit collec-


tively has knowledge of the software and canimprove coordination and efficiency.

Proposition 5a: Unit task complexityinfluences the types of cognitive emer-gence enabling states manifested inthe unit.

Proposition 5b: As task complexityincreases, human capital resourcesare more likely to emerge if the unitmanifests a shared climate andlearning and memory structures ap-propriate for the task (either sharedor distributed).

Affective states represent the third type of hu-man capital emergence enabling state. Affec-tive states are the emotional “bonds” that tieunit members together; they are what individu-als “feel” like when they are part of a group. Unitcohesion, trust, and affect (or “mood”) are affec-tive processes that render the unit task environ-ment open to, and supportive of, knowledgesharing and dissemination. Cohesion is the ex-tent to which unit members are attracted andcommitted to each other (Hackman, 1987). Cohe-sion becomes more critical as the task environ-ment becomes complex because members mustsynchronize their activities, respond to dynamicand unpredictable changes in the environment,and recycle work back and forth between eachother (Beal, Cohen, Burke, & McLendon, 2003).Thus, the greater commitment and attachmentto each other increases the strength and numberof bonds and ties among members. Cohesiveunits are also more likely to stick together andadopt proactive problem-solving strategieswhen dealing with adversity (Kozlowski & Ilgen,2006).

Likewise, units with greater degrees of trustare more likely to transfer knowledge, ideas,and innovations among members (Nahapiet &Ghoshal, 1998; Oldham, 2003). Trust is not likelyto be as critical when the unit task is of lowercomplexity. For example, only minimal degreesof trust are necessary in sequential workflowsbecause one need only have confidence that theprior members’ outputs will be adequate. Alter-natively, intensive workflows require high trustbecause the unit’s overall performance is a func-tion of reciprocal, interactive relationships andexchanges among members (e.g., Korsgaard,Schweiger, & Sapienza, 1995). To the extent

members distrust each other, they may withholdrelevant information or even provide mislead-ing information.

Unit affect represents the unit’s general posi-tive-negative emotional orientation; we canthink of this as the general “emotional state” ofthe unit’s task environment. When the unit man-ifests a generally positive orientation, it en-hances the sharing of knowledge and informa-tion, supports skill development, and increaseswillingness to remain with the team (George,1990; Nahapiet & Ghoshal, 1998). Individuals inmore positive moods seek to communicate andinteract more with other people (George, 1990),thereby enhancing the spread of informationand knowledge. Units are also likely to be morecreative and innovative when members are in apositive mood (Oldham, 2003). It is likely thatunit affect plays a lesser role in human capitalresource emergence when task complexity islow, simply because there is little need for in-terdependence or communication. However, astask complexity requires greater member inter-action, positive mood helps to promote and fa-cilitate intermember exchanges, encouragingmembers to enhance the sharing and transfer ofknowledge (Barsade & Gibson, 1998). Thus, theunit’s cohesion, trust, and mood will influencethe extent to which individual KSAOs becomeshared, supported, and mutually developed.

Proposition 6a: Unit task complexityinfluences the types of affective emer-gence enabling states manifested inthe unit.

Proposition 6b: As task complexity in-creases, human capital resources aremore likely to emerge if the unit man-ifests greater cohesion, trust, and morepositive mood.

Although we have discussed the emergenceenabling states separately, it is clear that theyare likely to be interrelated (e.g., Marks et al.,2001). We propose that the interrelationshipsamong unit behavioral, cognitive, and affectivestates become greater as task complexity in-creases. When the workflow is pooled, only min-imal behavioral coordination and communica-tion are needed to effectively perform the unit’stask; hence, there is little need for shared cog-nitive or affective states to facilitate human cap-ital resource emergence. In contrast, in inten-


sive workflow arrangements the human capitalresource will not emerge unless employeeswork interdependently and communicate, arewilling to trust each other, share their knowl-edge, and learn how to integrate the knowledgecollectively (Kozlowski et al., 1999; Mesmer-Magnus & DeChurch, 2009).

Indeed, there is an interdependency amongthe emergence enabling states such that behav-ioral states are fundamental to the existence ofcognitive and affective states (Kozlowski & Il-gen, 2006; Marks et al., 2001). If unit members donot interact, coordinate, communicate, or adaptto others’ behaviors, there will be little opportu-nity for unit members’ cognitive and affectivestates to manifest and support the emergence ofhuman capital resources. Shared experienceand interaction are critical for establishing trustand cohesion (Kozlowski & Ilgen, 2006), and thepresence of trust and cohesion is, in turn, criticalfor members to share knowledge and ideas(Mesmer-Magnus & DeChurch, 2009; Oldham,2003). If the unit does not develop sufficient co-hesion, unit members may begin to questiontheir involvement in the group and withdraw(Hackman, 1992). Likewise, tacit knowledge canonly be exchanged through interaction and com-munication (behavioral processes) as unit mem-bers learn each other’s roles and, hence, de-velop transactive memory (Fleishman &Zaccaro, 2002).

Perhaps the easiest way to appreciate the in-terdependence among emergence enablingstates is by considering instances where they donot mesh appropriately. There are highly visibleexamples of sports teams and music groupswith incredible talent who, because of dysfunc-tional cognitive or affective states, were unableto effectively perform together (e.g., the latterdays of the Beatles [Doggett, 2009], the 2004 U.S.Olympic basketball team).

Proposition 7: As task complexity in-creases, the interrelationships amongbehavioral, cognitive, and affectiveemergence enabling states becomestronger.

Proposition 8: Behavioral emergenceenabling states influence the manifes-tation of cognitive and affective emer-gence enabling states.

Manifesting a Collective Phenomenon: TheEmergent Human Capital Resource

We come now to the final part of the model ofhuman capital emergence. As noted before, Koz-lowski and Klein observe that the final stage ofemergence is “a higher-level collective phenom-enon” (2000: 55). Accordingly, in this section wedescribe that collective phenomenon and theforms that the emergent human capital resourcemay take as a function of the unit’s emergenceenabling process. By focusing our attention onthe nature of the unit-level resource, we are nowsquarely within the domain of macrolevel hu-man capital research, which, as we have noted,follows a resource-based logic (Barney, 1991; Pe-teraf, 1993) in arguing that human capital can bea source of competitive advantage if it is valu-able, rare, inimitable, and supported by the or-ganization (Barney & Wright, 1998; Wright et al.,1994). By and large, this literature has focusedon context-specific cognitive human capital,such as firm-specific knowledge, skills, and ex-perience (Grant, 1996; Liebeskind, 1996; Nelson &Winter, 1982; Wiersema & Bantel, 1992; Zander &Kogut, 1995; Zhang & Rajagopalan, 2003).

However, while this focus on context-specificcognitive human capital has empirical support,it may have obscured from theoretical consider-ation the effect on competitive advantage of anentire category of human capital resources thatemerge from individual-level, context-genericKSAOs. Here we develop this point and discussthe interrelationship between context-genericand context-specific human capital. Specifi-cally, the multilevel perspective on human cap-ital resource emergence offers the opportunity tosuggest ways in which context-generic humancapital can, in fact, be a source of unit-levelcompetitive advantage.

Context-specific human capital resourcesfrom context-generic KSAOs. As discussedabove, individual forms of generic and specificKSAOs become amplified through the emer-gence enabling process and are transformedinto collective human capital resources. Thissuggests an interesting insight at the level ofthe human capital resource (i.e., the level of thecollective phenomenon). Recall that task com-plexity has the effect of rendering the emergenthuman capital resource more inimitable giventhe inherent path dependency, social complex-ity, and causal ambiguity associated with


greater task complexity (Dierickx & Cool, 1989).Thus, because generic human capital resources(i.e., unit-level resources built from context-generic KSAOs) emerge as a function of theunit’s unique emergence enabling process, theyeffectively become unit specific.

This suggests a dramatic break with themacro literature on human capital. Althoughcontext- (i.e., firm-) specific human capital isunquestionably a valuable resource (Grant,1996; Liebeskind, 1996; Nelson & Winter, 1982;Zander & Kogut, 1995), units that have developedcontext-generic human capital resources mayhave also created a resource that is relativelyunit specific because it is based on a necessar-ily unique process of aggregating individualKSAOs into a unit-specific resource (Dierickx &Cool, 1989; Maritan & Peteraf, 2007). In otherwords, although the individual KSAOs may begeneric, the unit-level “complex resource” (Den-rell, Fang, & Winter, 2003) that originates inthese KSAOs is a unit-specific resource becauseit is based on the unit’s unique emergence en-abling process. This argument both supportsand elaborates the microfoundations perspec-tive discussed earlier (Abell et al., 2008; Felin &Hesterly, 2007; Teece, 2007). Here, those micro-foundations are not only the nature of the indi-vidual-level KSAOs at the origin of the unit-level resource but also the social andpsychological mechanisms embedded in theemergence enabling process.

To illustrate, consider a firm that has estab-lished an above-average stock of context-generic cognitive ability human capital. Al-though the relative performance contribution ofany one individual’s general cognitive ability inthat firm can be replicated by a second firm (e.g.,hiring another employee with equally high abil-ity), the first firm’s aggregate stock of humancapital cannot likely be replicated or imitatedunless the second firm duplicates the entireemergence process through which the humancapital resource is created (Amit & Schoemaker,1993; Maritan & Peteraf, 2007; Sirmon et al., 2007).

Proposition 9: Context-generic KSAOsbecome context-specific human capi-tal resources as a function of a unit-specific emergence enabling process.

The causal sequence of human capital re-sources. Context-generic human capital re-sources may also facilitate the creation of con-

text-specific human capital resources. Tounderstand this causal linkage we extend theconsiderable microlevel research finding thatcontext-generic KSAOs (e.g., general cognitiveability) influence context-specific KSAOs (e.g.,knowledge; Motowidlo, Borman, & Schmit, 1997;Schmitt et al., 2003). Context-generic KSAOs pro-vide the “building blocks” on which specializedexpertise can be developed (Ackerman & Heg-gestad, 1997; Carroll, 1993; Jensen, 1998; Kanfer,1990). For example, those with greater generalcognitive ability acquire specific knowledgeand skill more quickly than those with less abil-ity, which consequently produces greater taskperformance (Hunter, 1983). Further, generalforms of knowledge and skill (e.g., knowledgeacquired through formal education) facilitatethe acquisition of specific forms of knowledgeand skill (Becker, 1964; Beier & Ackerman, 2003;Hambrick, 2003). Thus, context-generic KSAOsfacilitate the development of context-specificKSAOs (Ackerman & Heggestad, 1997; Kanfer,1990). Figure 2 depicts this causal sequence.

We predict that a similar causal sequencewill apply to unit-level human capital resources.It is important to note that we do not suggestthat individual-level findings will identicallygeneralize to the unit level; indeed, to do so maybe a cross-level fallacy (Rousseau, 1985). Rather,the emergence enabling process we have de-scribed will maintain the basic relationship be-tween context-generic and context-specificKSAOs. Recalling that dynamic capabilities ingeneral manifest an iterative reconfiguration ofthe resource portfolio (Helfat et al., 2007), con-text-generic forms of human capital resourcesmay facilitate the adaptation of unit-specific hu-man capital resources to new tasks, or may in-crease the speed of acquiring new unit-specifichuman capital resources. For example, unitsthat have context-generic human capital aremore able to both develop and assimilateknowledge and skills that render the humancapital resource more context specific (Cannon-Bowers, Tannenbaum, Salas, & Volpe, 1995;Hackman, 1987; Ilgen et al., 2005; LePine,Colquitt, & Erez, 2000). Thus, because complextasks require greater adaptability and coordina-tion, we expect that context-generic human cap-ital resources (based on general cognitive abil-ity, personality, values, and interest KSAOs) willbe a strong determinant of the formation of con-text-specific human capital resources.


Research on absorptive capacity (Cohen &Levinthal, 1990) is illustrative in this regard. Intheir model of firm-level absorptive capacity,Zahra and George (2002) describe the processwhereby firms acquire and assimilate knowl-edge in a way that leads to sustainable compet-itive advantage. The process of knowledge ac-quisition and assimilation, however, assumes ahuman capital resource that is able to identify,integrate, and transform the external knowl-edge. Given the individual-level KSAOs at itsorigin, developing a high-quality stock of a con-text-generic cognitive human capital resource istherefore necessary to engage effectively in thisprocess. Importantly, however, this process ofknowledge assimilation and transformationdoes not leave the human capital resource un-changed. Indeed, by transforming the acquiredknowledge into a unit-specific source of compet-itive advantage, the human capital is, itself,transformed. New context-specific knowledgestructures are created and remain embedded inthe unit-level human capital. Thus, context-generic human capital facilitates the process ofabsorptive capacity (Zahra & George, 2002),which, in turn, results in the creation of context-specific human capital.

Importantly, the causal sequence we posithere suggests that firms that develop a higher-quality stock of context-generic human capitalalso may be more able to adapt the human cap-ital resource to respond to environmental dyna-

mism and change (Eisenhardt & Martin, 2000;Helfat et al., 2007; Teece, 2007): having a stock ofcontext-generic human capital facilitates theability of the firm to dynamically adapt theemergent context-specific human capital. Thisargument leverages the core argument of theDCV perspective (Eisenhardt & Martin, 2000; Hel-fat et al., 2007; Teece, 2007) outlined earlier. If aparticular human capital resource ceases to pro-vide competitive advantage as a function of en-vironmental change (Eisenhardt & Martin, 2000),the ability of the firm to adapt the human capitalresource becomes itself a source of competitiveadvantage (Helfat & Peteraf, 2003). Thus, our ar-guments regarding the causal sequence of hu-man capital content imply that a stock of con-text-generic human capital is a vitallyimportant element of the firm’s ability toachieve competitive advantage inasmuch as itfacilitates the dynamic creation and adaptationof context-specific human capital.

Proposition 10: Context-generic hu-man capital resources lead to the de-velopment of context-specific humancapital resources.

DISCUSSION

Organizational researchers working in manydifferent scholarly traditions have invoked thehuman capital construct but, simply put, have

FIGURE 2Domains of Individual-Difference KSAOs and Their Causal Interrelationships

Context- generic KSAOs

Cognitive

Noncognitive

Context- specific KSAOs

Cognitive ability Generic knowledge

Generic skills Generic experience

Specific knowledge Specific skills

Specific experience

Personality Values

Interests

…facilitate the development of…

Note: Context-generic KSAOs are generally stable across situations and time, while context-specific KSAOs are generallymalleable. KSAOs in bold are those studied in macro human capital research.


often described different things. Across the bodyof organizational scholarship, this has resultedin a fractured and, we argue, incomplete theo-retical understanding of the human capital re-source. Thus, for researchers interested in un-derstanding how individual human resourcesbecome a unit-level human capital resource, thetime is right to integrate the considerable bodiesof literature related to this question. We haveendeavored to do this by tying together theinsights from microlevel, intermediate-level,and macrolevel organizational research withthe concept of emergence from multilevel the-ory. In so doing we have both borrowed fromand broken with the within-level human cap-ital scholarship that precedes us. This neces-sarily has a range of implications that weconsider now.

Conceptual Implications

Defining the human capital resource as theunit-level emergence of individual KSAOs may,on the surface, appear similar to existing con-ceptualizations. For example, Barney andWright defined human capital as including“such things as the skills, judgment, and intel-ligence of the firm’s employees” (1998: 32), andSkaggs and Youndt defined human capital as“the skills, knowledge, and expertise of employ-ees” (2004: 86). However, our definition makes asizable break from prior conceptualizations be-cause it emphasizes the cross-level origins ofthe human capital resource. First, we define thelevel of theory for human capital resources atthe unit level but identify its origins in the psy-chology of individuals—hence, the human cap-ital resource is, by definition, a multilevel emer-gent phenomenon. Second, our definition ofhuman capital recognizes that the unit-level re-source may originate from multiple types of in-dividual KSAOs. In this regard our conceptual-ization is more inclusive than prior approaches,allowing for a more complete and nuanced per-spective. Third, by defining the level of theorygenerically at the “unit” level, the human capi-tal resource can exist at the group, department,store, or firm level of analysis, with the relevantaggregation of individual-level KSAOs mea-sured at the level that is theoretically and em-pirically relevant (see Ployhart, Weekley, &Baughman, 2006). This is desirable because itbroadens the conceptualization of human capi-

tal to connect many diverse theories, bodies ofliterature, and levels.

The conceptual approach we advocate alsoreconciles an apparent “paradox” between mi-crolevel and macrolevel scholarship: microscholars emphasize the importance of context-generic KSAOs, whereas macro scholars em-phasize the importance of context-specific hu-man capital resources. The multilevel modelreconciles this paradox by recognizing that thehuman capital resource is an emergent phenom-enon and is only partially isomorphic with indi-vidual KSAOs. Thus, micro scholars should notassume that relationships between individualKSAOs and individual performance ensure sus-tained competitive advantage, and macro schol-ars should not assume that only context-specifichuman capital resources can be a source of sus-tained competitive advantage. Research testingthese possibilities could have far-reaching im-plications. For example, universalistic micro-level assumptions that “more cognitive ability isbetter” may not be true at the unit level becausethe competitive advantage in an organization’senvironment might, quite simply, not be drivenby cognitive human capital (Barney, 2001). Find-ings for such questions could challenge some ofthe core “truths” of management scholarship.

Measurement and Analysis Implications

Defining human capital as a unit-level con-struct also has broad implications for empiricalmeasurement and testing. Describing the pro-cess of emergence is often a methodological en-deavor in the microlevel literature and is nearlywholly ignored in the macrolevel literature. Bothmicro and macro scholars can use the model totheoretically explain the origins and processesof human capital emergence. For example, de-pending on the unit’s task complexity, there maybe instances where simple additive aggrega-tions of KSAOs represent a valid measurementof the human capital resource, while in otherinstances reseachers may find that human cap-ital resources interact. The unit-specific emer-gence enabling process will determine whetheradditive or multiplicative KSAO aggregationsoccur. Although it may not always be possible tomeasure the entirety of the emergence enablingprocess, in general, human capital scholarshipwill be enhanced when researchers articulatehow and why human capital emergence should


occur (see Liao & Chuang, 2004, for an excellentillustration).

Second, researchers should be careful to opera-tionalize the form of the human capital resourcein a manner consistent with their theory of theemergence enabling process. Human capital re-source emergence may exist on a continuumranging from homogeneity in KSAOs (composi-tion) to heterogeneity in KSAOs (compilation;Bliese, 2000; Chan, 1998; Kozlowski & Klein,2000). On the one hand, for example, the emer-gence enabling process may lead to homogene-ity of KSAOs, and, thus, a composition measure-ment model is appropriate and human capitalresources should be operationalized as the av-erage KSAOs within the unit. On the other hand,the emergence enabling process may lead toheterogeneity of KSAOs, and, thus, a compila-tion measurement model is appropriate and hu-man capital resources should be operation-alized as the variability of KSAOs within theunit. Chan (1998), Bliese (2000), and Kozlowskiand Klein (2000) provide in-depth guidance foroperationalizing different forms of emergence.

Finally, research should avoid using proxymeasures (e.g., HR practices, education) or sin-gle-respondent self-reports of human capital.Although we realize that practical constraintsmay frequently necessitate the need for proxymeasures and that some disciplines (such aseconomics) may have different views aboutwhether proxy measures are problematic, webelieve that, whenever possible, it is preferableto use measures of KSAOs and then aggregatethem as appropriate for the emergence modeltheorized (e.g., Fulmer et al., 2003; Gerhart, 2005;Wright & Haggerty, 2005).

Exogenous Implications

An important and potentially exciting area forfuture research will be identifying factors thatinfluence human capital resource emergence.One of the most promising avenues for futureresearch will be linking the literature on HRMsystems, policies, and practices (e.g., Becker &Huselid, 2006; Becker, Huselid, & Beatty, 2009;Boudreau & Ramstad, 2005; Delery & Shaw, 2001;Jackson & Schuler, 1995; Lepak et al., 2006; Os-troff & Bowen, 2000) with the model of humancapital emergence. If human capital resourcesemerge from KSAOs embedded within orga-nizational units, then it is the organization’s

HRM systems, policies, and practices thatshould most strongly shape the nature of theindividuals admitted to, developed in, and re-tained within the firm. Thus, future researchmight examine how different HR systems canlead to different forms of human capital re-source emergence (see Lepak et al., 2006, formany possibilities). The multilevel model alsoprompts new ways of conceptualizing the ef-fects of HR by recognizing that the relation-ship between HR systems, policies, and prac-tices and unit effectiveness is indirect, crosslevel, and mediated through human capitalemergence. Finally, the multilevel modelhelps develop actionable steps for managingor creating a “differentiated workforce”(Becker et al., 2009; Lepak & Snell, 1999) byshowing how human capital can be purpose-fully created for different employee groups.

More generally, the model we have developedsuggests that changing the nature of the unit’stask will result in the emergence of a differenthuman capital resource. Recall that the baselinemotivation of the multilevel model of humancapital emergence is the creation of a resourcethat can be a source of competitive advantage(Barney & Wright, 1998) and that the process ofresource creation is a dynamic capability (Hel-fat et al., 2007) that is, in and of itself, a source ofcompetitive advantage. If the unit’s emergenthuman capital resource ceases to be a source ofcompetitive advantage, then strategic change tothe human capital resource base can beachieved through changes to the processthrough which it is created (Maritan & Peteraf,2007). Thus, changing the emergence enablingprocess will change the emergent human capi-tal resource. This has nontrivial managerial im-plications. Altering the unit’s task complexityand/or workflow will change the way that mem-bers interact behaviorally, cognitively, and af-fectively, and this will necessarily result in theemergence of different kinds of human capitalresources.

CONCLUSION

The multilevel model of human capital emer-gence defines human capital as a unit-level re-source that is created from the emergence ofindividuals’ knowledge, skills, abilities, andother characteristics (KSAOs) and takes two the-oretical insights as givens. First, individuals dif-


fer in their endowments of KSAOs; second, hu-man capital is a resource that can relatemeaningfully to unit-level performance. Our ob-jective was to connect these two fundamentaltheoretical insights from micro and macro orga-nizational scholarship and ask, “How do indi-vidual differences in KSAOs become a valuableunit-level resource?” Multilevel theory providedthe point of entry to this question, and the modelwe have described is our proposed answer. Bydrawing on multilevel theory to connect theselevels, we have endeavored to address the lim-itations and assumptions that are by-products ofwithin-level thinking. More important, connect-ing the micro and macro human capital litera-ture in a multilevel model illustrates a powerfulsynergy between insights within the two bodiesof literature. It is our hope and expectation thatthose synergies will serve scholars working inboth areas to develop their research in excitingnew directions.

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Robert E. Ployhart ([email protected]) is a professor of management and MooreResearch Fellow at the Darla Moore School of Business, University of South Carolina.He received his Ph.D. from Michigan State University. His primary interests includestaffing, recruitment, human capital, and advanced statistical methods.

Thomas P. Moliterno ([email protected]) is an assistant professor of manage-ment at the Darla Moore School of Business, University of South Carolina. He receivedhis Ph.D. from the University of California, Irvine. His research explores the creationand management of organization-level resources and capabilities.


Documents

EMERGENCE OF THE HUMAN CAPITAL RESOURCE: A · PDF filea unit-level1 resource that is created from the emergence of individuals’ knowledge, skills, abilities, and other characteristics