EXCERPT FROM THE STUDY
Schultz (1961) proposed the human capital theory, which was further expanded by Nobel Prize winner economist Garry S. Becker in 1962 and 1964. Because of the competitive nature of businesses, the presence of globalization factors, technology, economic challenges, and changing customer demands and tastes in both advanced and developing economies, organizations are compelled to seek other sources of competitive advantage in a variety of industries. Following that, acquiring a competitive edge entails that firms use methods that are distinct from those used by others, particularly those in the same industry. Human resources, according to the notion, are at the heart of all organizational resources since they are the most valuable organizational capital for development. According to the notion, human capital performs all duties, tasks, and responsibilities in connection to the many activities necessary to get an organization up and operating. This is especially true given that human resources make use of all other organizational and social resources. As a result, the idea suggests that organizations cannot prosper in the absence of human resources. As a result, the theory acknowledges that human capital is critical to the growth and success of companies, and that certain key practices and policies are necessary in all areas of management that effect human capital.
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