Building business excellence through psychological capital

Abstract

Scholars have long been concerned about investigating the various characteristics that affect organisational performance. The related research has used a range of approaches, including both the industrial organisation view and the resource-based view of the firm. Although continuous investment in financial and social capital is necessary, it has become increasingly clear that it is not by itself sufficient. As Dahlgaard-Park [(2012). Core values – The entrance to human satisfaction and commitment. Total Quality Management and Business Excellence, 23(2), 125–140. doi:10.1080/14783363.2012.655067] has suggested, the superficial knowledge and insufficient understanding of human beings cause the failure of a company to mobilise its human recourses. The vicissitudes of today's global economy call for different positive psychological capital within each employee. Initial studies indicate that the investment in psychological capital may yield substantial returns. Research has shown that psychological capital can influence employees’ work performance, increasing positive workplace behaviours while decreasing negative behaviours and combating stress. Accordingly, this study set out to review and explore the importance of psychological capital and has suggested a double-loop framework to explain the mechanisms of psychological capital.