How Resource Scaling Reshapes Strategic Human Capital Management

Abstract

This paper studies how resource scaling - the simultaneous deployment of the same resource across a large set of organizational units - reshapes the strategic deployment of human capital resources. We advance that scaling up resources which facilitate firm growth may increase worker productivity while simultaneously reducing firm’s reliance on human capital as a source of competitive advantage. This result emerges as organizations scale up resources that increase the returns of specializing workers on tasks which do not rely on unique worker-level. The study employs a multi-method approach to examine resource scaling in the context of private higher education in Brazil, where a group of corporations implemented strategies to scale up hybrid learning, standardized courseware, and professional management following waves of acquisitions. Using a unique dataset on ownership changes, labor contracts, and establishment characteristics, we conducted panel event-study estimations comparing acquired establishments to matched non-acquired establishments. The results provide evidence that only acquisitions coupled with resource scaling led to superior establishment performance, teaching productivity, faculty specialization in teaching, and sustainably higher levels of faculty turnover. In-depth qualitative interviews with deans and faculty suggested that faculty became more replaceable as they specialized in teaching rather than in activities perceived as more value-adding, such as research or course development. This paper advances the resource reconfiguration and strategic human capital literatures by showing that resource scaling can increase the productivity of human capital while specializing workers and decreasing the role of their human capital as a source of competitive advantage.