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date: 17 September 2021

Abstract and Keywords

This article looks at human capital (HC) in the context of the knowledge-based view of the firm. While personal notions of knowledge as HC are axiomatic, they also recognize collective or community processes. But their interplay is a problem, and the article argues that there has been little attention to the microfoundational aspects of aligning the interests of the various individuals involved. It proposes a relationship between the individual and the firm that takes divergent interests into account. The article reviews the history of HC theory and considers the relation between the individual knowledge-based HC and that of the firm. It concludes that three important results emerge from a democratic and cooperative approach to management: firm-level knowledge results only when individuals contribute beyond the terms specifiable in their employment contract, non-pecuniary rewards are essential, and the motivational aspects become those that define the firm.

Keywords: human capital, firm-level knowledge, employment contract, non-pecuniary rewards, motivational aspects

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