The Four capitals of Organisational Development

Overview: The development of organisations relates to improvement to the four inter-connected forms of capital: i) Tangible Capital, ii) Human Capital, iii) Organisational Capital, iv) Social or Political Capital.

This text deals primarily with Organisational Capital. Human resource development and management is the subject of a separate report in this series and therefore deals with most issues relating to Human Capital. Important lessons regarding the status of this capital are highlighted herein as this underpins advancement of other capitals. None of the evaluations draw lessons on social/political capital.

Figure 2: Four Forms of Capital

Tangible

Land, research stations, libraries, laboratories, offices, equipment and financial assets.

Human/Intellectual

The skills, professionalism motivation creativity degree of problem-orientation of the staff.

Organisational

The appropriateness of the institution’s mandate, the quality of its internal management procedures, and its policies and decision-making procedures assessed in terms of their contribution to the creation and improvement of research outputs.

Social or Political

The political and economic support the institution is able to muster, which in turn is largely a function of its reputation and prestige in the eyes of its stakeholders.

Tangible Capital

Lessons Learnt

  • Computerisation represents a significant organisational gain, but it will be sustainable only if it there is reasonable assurance of adequate post-project provision for repair, maintenance and eventual replacement. Otherwise it could be seriously counter-productive, since it erodes traditional systems and skills. Since many projects (including those reviewed) now provide support for computerisation this lesson may be of general relevance.

  • The provision of equipment, refurbishment of facilities and infrastructure development is still regarded by many government officials as the most significant attribute of a project. If projects support this development a solid platform for senior decision-makers may be formed to engage influential persons in the reform debate but is dependent on the nature of linkage and individuals engaged and involved with both (e.g. compare PETRRA with FFP)

  • As staff become more computer literate they are able to access more information for their own self-development which indirectly contributes to human resource capacity building; likely to lessen necessity for expensive formal training intervention. Supporting computer literacy in organisations may reduce capacity building costs over the longer term.

Key Findings

  • ASIRP provided computers and software to a large number of DAE offices and set up computerised systems to handle a range of management and other tasks, so that many of the Department’s field offices are now quite computerised. This is also the case for FFP and the DoF.

  • Equipment procurement and infrastructure development is successfully completed in most RLP projects. DAE staff criticised ASIRP for not providing books and material on technical issues (not a project function).


Human or Intellectual Capital


This section highlights lessons from the institutionalising or internalising the process of building human capital.

Lessons Learnt

  • The human capital building process is still strongly linked to project prescribed activities (by the very nature of project design) and cannot be formalised into an organisational human resource development plan. Thus the development of institutionalised HRM/D structure cannot be achieved through an isolated project located at Department level.

  • With support from HRM/D specialists and commitment to overall organisational reform departments can institutionalise effective HRM/D reform because facilities, resource persons (for technical training), training resources are already available and accessible. If an overarching reform process in place this organisational component may be the easiest to reform.

  • Specific training programme and courses may be easily internalised and sustained within already existing course curricula and programmes.

Key Findings

  • Whilst the development of strategic HRM/D plans were completed successfully in DAE and DoF and exposure to the process was beneficial to staff involved, the plans were never implemented because these were not supported by overall organisational plans and Ministerial backing.

  • As part of the reform process significant time and effort was invested to establish central HRM/D coordinating and planning units (Training or HRD Wings) in both DAE and DoF. Without full organisational ownership (mainly tacit support) the Wings never fulfilled their intended roles as strategic HRD planning units and HRM components remain documented plans only. The DoF training Wing has continued to operate semi-autonomously but mainly through a FFP mandate.

  • A fully autonomous Divisional HRD strategy was implemented successfully (although guided by the FTEP-2 project) and demonstrated that DoF could implement the principles of the HRD process at certain staff levels. However this was not internalised as a sustainable process in the absence of an overarching organisational strategic HRD reform programme.

  • Most human capital building was linked to project activities and prescribed objectives. One livelihoods course was successfully sustained by integration into fisheries related courses at one university through the SUFER programme. This was achieved through personal commitment by key individuals in the university rather than a formal institutional process led by the apex body, University Grants Commission.

Organisational Capital

Turning to organizational capital, this is without doubt the most difficult of the four forms of capital to enhance, as attempts to do so tend to challenge a potent mixture of tradition, vested interest and inertia. However, it is also the most important form of capital an agency can possess and the one that will largely determine success of efforts to enhance the other three forms. Few public sector R&D institutions in the least developed countries (LDCs) are organised in such a way as to produce a stream of relevant high quality outcomes. The agencies themselves tend to blame their deficiencies on chronic lack of funding, but others, while accepting that funding has been scarce and getting scarcer, have identified a number of failings that have contributed to the situation. Prominent among these is a chronic inability to prioritise the allocation of scarce resources. Generally speaking they lack most or all of the following:

  • independent governance and management structures

  • an agenda that is client orientated and demand driven

  • a list of R&D issues that is based on national and sectoral development priorities

  • transparency and professionalism in project selection, management and evaluation procedures

  • mechanisms to decentralise decision making

  • remuneration levels that permit professional staff to work full-time

  • procedures for recruitment, promotion termination and selection for training that are transparent and merit-based, and that reward good performance and penalize underperformance

  • funding mechanisms that link financial flows to organisational performance.