Human Capital and External Knowledge Acquisition in Nonprofit Organizations

Abstract

Human Capital (HC) is defined as the human knowledge and knowing capability that an organization possesses that provide a competitive edge to the organization in the market. Organizational members' tacit knowledge, abilities, and skills to sense and understand the needs of external stakeholders, and constantly interact appropriately with the stakeholders for the benefits of their organizations, can be seen as a unique set of HC. External knowledge can be acquired through HC for strategic advantage and renewal. A review of the literature and a series of semi-structured in-depth interviews with 15 nonprofit members from 7 Australian NPOs reveal that there is a strong link between HC and external knowledge acquisition. This chapter argues that a better understanding of the relationship between HC and external knowledge acquisition is necessary if knowledge management, organizational learning, and an intellectual capital-view of the firm are to be fully integrated.