Conceptualizing and measuring the economic value of human capital of the third kind Corporate culture

Purpose – The purpose of this paper is to deal with the conceptualization and measurement of the economic value of what we have termed “human capital of the third kind”, i.e. corporate culture. It also seeks to draw upon empirical research from the field of culture management to show how the economic value of human capital of the third kind can be measured. Design/methodology/approach – The paper presents a theoretical framework as well as some empirical research to show how economic value of the third kind can be measured. Findings – This has provided a different conceptualization of human capital relevant to human resources accounting. It has presented a typology of human capital consisting of three types: the economic value of individuals; the economic value of groups or teams; and the economic value of the total human organization. The paper also summarized an empirical investigation relevant to the economic value of human capital of the third kind. The results of this empirical investigation provide support for the notion that culture, or human capital of the third kind, is a significant component of overall financial success. While the results are not completely definitive, they do provide statistically significant evidence of the impact of culture as a component of human capital. This, in turn, opens the way to a new approach to human resource accounting and value measurement. Research limitations/implications – Based on this finding, we can conclude that human capital of the third kind (corporate culture) can be measured and that it does have a statistically significant impact upon financial performance. This opens the way to a new direction in human resource accounting. Originality/value – This paper presents a redefinition of the overall global concept of human capital, and points the way to a new direction for future research in human resource accounting.