Human Capital and Strategic Competitiveness in the 1990s

The development of human capital is critical for firms to gain competitive advantage. However, short‐term, risk‐averse managerial behaviour often produces lower investments in the development of human capital. Short‐term risk‐averse managerial behaviour is often the result of managerial energy absorption in mergers and acquisitions, higher debt levels, increasing diversification and size, inappropriate downsizing and lack of managerial vision. Such problems can be reversed through downscoping, retaining valuable employees during restructuring,emphasizing the importance of human capital, cultivating an effective learning‐oriented corporate culture, developing an entrepreneurial spirit, promoting a long‐term focus, and promoting high‐quality products and services. With these changes, a strategically targeted human resource development programme can be established.