(knowledge stocks) helpsWrms create competitive advantage through the eVective
use, manipulation, and transformation of various organizational resources
required to perform a task (Nonaka 1994 ; Kogut and Zander 1992 ; Grant 1996 ).
In addition to knowledge stocks, Dierickx and Cool ( 1989 ) noted thatknowledge
Xowsare vital for the creation of new knowledge, as well as recombination of
existing knowledge. While a company’s knowledge stocks provides a foundation
for competitive advantage (Grant 1996 ), what diVerentiates successful companies
from others may very well be how companies manage knowledgeXows; that is, how
companies eVectively leverage, integrate, and create knowledge among individuals
within and across diVerent employment modes.
Recently, several researchers have directly addressed this issue and have shifted
our attention to the broader domain of intellectual capital with a key focus on the
importance of social capital. As noted by Youndt et al. ( 2004 : 337 ), intellectual
capital can be broadly conceptualized as ‘the sum of all knowledge an organization
is able to leverage in the process of conducting business to gain competitive
advantage’ and consists of human, social, and organizational capital. Human
capital refers to individual employee capabilities—their knowledge, skills, and
abilities. Nahapiet and Ghoshal ( 1998 )deWne social capital as the aggregate of
resources embedded within, available through, and derived from the network
of relationships possessed by an individual or organization (Brass et al. 2004 ).
Finally, organizational capital refers to ‘institutionalized knowledge and codiWed
experience stored in databases, routines, patents, manuals, structures, and the like’
(Youndt et al. 2004 : 338 ).
Subramanian and Youndt ( 2005 ) examined the relationships between these three
types of intellectual capital and innovation, and found that organizational capital
was positively associated with incremental innovative capability and social capital
was related to both incremental and radical capabilities. Interestingly, they also
found that human and social capital interacted positively to inXuence radical
innovative capability. One direct implication of this is that it suggests that
human capital provides the most value for innovative capabilities when employee
knowledge is shared among employees. Relatedly, Collins and Clark ( 2003 ) explored
the relationships among network-building HRM practices, internal and external
social networks of top management teams, andWrm sales growth and stock growth.
Their results provide support for a mediating eVect of top managers’ social
networks. As theseWndings suggest, knowledge stocks (human capital) are most
valuable when paired with appropriate knowledgeXow (social capital).
The importance of social capital and managing knowledgeXow highlights a
limitation of the HR architecture. While an architectural perspective helps to create
an overall picture of how an organization’s portfolio of knowledge stocks is
managed, diVerentiating employees based on their uniqueness and strategic value
does not account for how to promote knowledgeXow within and across diVerent
employment modes. Put simply, it does not take into account interactions and
employment subsystems and hr architecture 223