Session 402

Microfoundations of Strategic Human Capital

Track L

Date: Monday, September 22, 2014


Time: 11:00 – 12:15


Room: Copenhague

Session Co-Chairs:

  • Paolo Aversa, City, University London
  • Philipp Meyer-Doyle, INSEAD

Title: Efficiency and Influence in the Deployment of Human Assets: Evidence from M&A Leagal Advisors


  • Olivier Chatain, HEC-Paris
  • Philipp Meyer-Doyle, INSEAD

Abstract: We examine how firms deploy their human assets under efficiency considerations, and how individuals seek to influence the deployment for private gain. Our empirical context is the UK M&A legal market, where micro-data enable us to observe the allocation of lawyers to M&A mandates. We find that law firms actively equalize the workload among their lawyers and selectively stretch better/senior lawyers, consistent with efficiency consideration. However, lawyers also appear to influence the staffing process in their favor, leading to excessive stretching and less sharing of projects/clients. Paradoxically, law firms may adopt a seniority-based rent-sharing system, weakening individual incentives, to mitigate the impact of incentive conflicts on resource deployment. The study refines our understanding of resource deployment with incentive problems, and of micro-foundations of the RBV.

Title: How Incentives Affect Individual Learning and Human Capital Development


  • Sunkee Lee, INSEAD
  • Philipp Meyer-Doyle, INSEAD

Abstract: We integrate the literatures on learning and incentives, to explore how different performance incentives shape the type/nature of individual learning, and ultimately the development of human capital. Making use of micro-data on the commercial projects of sales employees at a South Korean e-commerce company, we observe how different incentive regimes shape the individuals' learning behavior/outcomes. We find that individual learning declines after a reduction in performance-based incentives, yet, interestingly, this decline is moderated by individuals' prior performance and the magnitude of their pay change. Interestingly, vicarious learning occurs but is unaffected by changes in incentives. Overall, this study makes a contribution by integrating individual learning and incentives, and by providing insights into important micro-foundations of the RBV.

Title: Microfoundations of Firms' Human Capital-Related Rents and Losses


  • Clint Chadwick, University of Kansas
  • David Wangrow, University of Kansas
  • Karl Kammerer, University of Kansas

Abstract: In developing a model for strategic human capital that goes beyond the upside potential of firms’ human capital and below the macro level, we take a close look at the microfoundational mechanisms that impact both the upside and downside potential for human capital related value creation and appropriation. Specifically, our model is rooted in two interdependent processes: the bargaining process that determines human capital pricing, and the management process that facilitates human capital-related value creation. We thus contribute to the strategic human capital literature by offering a unique theoretical lens for understanding the dynamic processes by which firms accrue rents or losses from their human capital.

Title: Why Do High Status Employees Underperform? A Study on Status Conflict Within Formula 1 Racing


  • Paolo Aversa, City, University London
  • Gino Cattani, New York University
  • Alessandro Marino, LUISS Guido Carli University

Abstract: This paper sheds light on current mixed findings associated with hiring high status individuals by probing the conditions under which high-status individuals are more or less likely to contribute the performance that is expected of them. We find that high-status positively affects individual performance, but as the difference in status among high-status individuals working in the same firm decreases, so does their individual results. Finally we find that the status of the employing organization has a negative moderating effect on the performance of its high-status employees. A longitudinal study in the Formula 1 racing (1982-2010) provides quantitative support to our findings. In addition, we qualitatively identify a set of inter-organizational dynamics that underpin these effects. Implications for theory and practice are discussed.

All Sessions in Track L...

Sun: 08:00 – 09:15
Session 280: Strategic Human Capital and Human Resource Management: The Role of Context
Sun: 09:30 – 10:45
Session 285: Micro-foundations and Human Capital: The Power of Multiple Perspectives
Sun: 11:15 – 12:30
Session 281: New Frontiers: CSR, Ethics and Human Capital
Sun: 15:45 – 17:00
Session 242: The Strategic Effects of Management Human Capital
Sun: 17:15 – 18:30
Session 608: Strategic Human Capital IG Business Meeting
Mon: 11:00 – 12:15
Session 402: Microfoundations of Strategic Human Capital
Mon: 14:45 – 16:00
Session 248: Strategic Talent Management
Mon: 16:30 – 17:45
Session 245: Human Capital Complementarities
Tue: 11:00 – 12:15
Session 247: Human Capital and Knowledge as Strategic Resources
Tue: 15:30 – 16:45
Session 244: Labor Markets and Strategic Human Capital
Tue: 17:15 – 18:30
Session 243: Strategic Perspectives on Employee Turnover and Retention

Strategic Management Society