Analyzing Human Capital's Critical Role in Global Business (INTL 3)

This essay delves into the critical significance of human capital in the context of international business. It emphasizes how human capital, encompassing employees' knowledge, skills, and values, is rapidly gaining importance. The discussion explores how human capital enhances competitiveness, a key factor in the global market. The essay highlights talent management as a modern trend, where companies prioritize a skilled workforce for a competitive edge, stressing the importance of employee retention. Furthermore, it addresses the significance of labor costs in international business, often leading companies to recruit from developing markets. The essay also examines the role of human capital in corporate social responsibility (CSR), where incorporating local communities is vital, and how human capital contributes to successful CSR initiatives. Ultimately, the essay concludes that human capital is a crucial determinant of success in international business, providing the expertise necessary for sustainable development.

Running Head: INTERNATIONAL BUSINESS
INTERNATIONAL BUSINESS
Name of the Student:
Name of University:
Author Note:

1INTERNATIONAL BUSINESS
The notion of human capital is associated with the knowledge, skills, abilities and values
of the employees. It is important to note that the significance of human capital in current
international business practice is growing at a rapid pace due to a number of factors. This
discussion is trying to find out the critical necessity or significance of the human capital in global
business scenario.
According to Boon et al. (2018) competitiveness in the international market is identified
as one of the important aspect that increases the importance of human capital. The paradigm of
talent management is a current trend in international business where the business companies are
willing to retain a strong and highly skilled workforce that can provide competitive edge in the
market. Therefore, it becomes a serious matter for the business companies to focus on the human
capital and reduce the rate of turnover to a great extent so that it will be beneficial for the
organisation to maintain sustainability in business.
In addition to this, in international business labour cost is considered to be one of the
important aspects on which the business companies must focus. Often the business companies
are trying to recruit people from the developing market due to have cheap labourers with high
skills (Manuti, Impedovo & De Palma, 2017). Therefore, it becomes pertinent for the business
enterprises to focus on the human capital and link it with the need of the organisation. The
comparatively cheap labour cost definitely creates competitive advantage for the business
organisations as it is always looking for strategic measure to reduce its operational costs. In
response to this, the vitality and efficacy of the human capital play significant role and it will
facilitate long term benefits for the business expansion of the organisation (Polo & Kantola,
2018).

2INTERNATIONAL BUSINESS
As a matter of fact, human capital can play pivotal role in the process of sustainable
development in the market. The concept of corporate social responsibility (CSR) has been played
a significant role for the survival of the organisation. In this respect, incorporating the local
communities is also part of the social responsibility of the enterprise where the company puts
focus on human capital (Kianto, Sáenz & Aramburu, 2017). The human capital definitely
contributes a lot to the social responsibility measure of the organisation and also defined as a
core element to deliver a successful corporate social responsibility initiative for the business
organisation. The human capital also guides the business companies to understand the efficacies
of the human capital and formulate an impact over proper execution of the corporate social
responsibilities.
From this point of view, it can be started that human capital played a significant impact
over the success and sustainable development of an organisation. In fact, the international market
is highly fluctuating and depended on a number of important factors. In response to this, human
capital projects enough expertise to the business organisation so that it can bring efficacy to the
organisational practice in course of delivering sustainability in business process. Therefore,
human capital is considered to be a critical factor for international business and identified as one
of the determinants of success in international business.

3INTERNATIONAL BUSINESS
Reference
Boon, C., Eckardt, R., Lepak, D. P., & Boselie, P. (2018). Integrating strategic human capital and
strategic human resource management. The International Journal of Human Resource
Management, 29(1), 34-67.
Kianto, A., Sáenz, J., & Aramburu, N. (2017). Knowledge-based human resource management
practices, intellectual capital and innovation. Journal of Business Research, 81, 11-20.
Manuti, A., Impedovo, M. A., & De Palma, P. D. (2017). Managing social and human capital in
organizations: Communities of practices as strategic tools for individual and
organizational development. Journal of workplace learning, 29(3), 217-234.
Polo, F., & Kantola, J. (2018, July). Valorizing the Human Capital Within Organizations: A
Competency Based Approach. In International Conference on Applied Human Factors
and Ergonomics (pp. 55-63). Springer, Cham.