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Archives of Business Research – Vol. 8, No. 8

Publication Date: August 25, 2020

DOI: 10.14738/abr.88.8690.

Schultz, C. M., & Nel, P. S. (2020). Human Resource Business Acumen and Social Capital Applications in the African Context. Archives of

Business Research, 8(8). 197-211.

Human Resource Business Acumen and Social Capital Applications

in the African Context

Cecile M. Schultz

Department People Management Development,

Tshwane University of Technology, South Africa

Pieter S. Nel

Business and Enterprise Network

Unitec Institute of Technology, New Zealand

ABSTRACT

A theoretical review of business acumen and social capital was

conducted that would apply to human resource management practice

to identify the desired behaviour of high-performing human resource

professionals. The links of intellectual capital to human capital and

organisation capital are necessary to contextualise social capital and its

link with human capital resources and business acumen. A conceptual

framework was proposed, consisting of business aspects, personal

attributes and relationships to enhance human resource professionals’

business acumen. HR business acumen consists mainly of business

aspects, personal attributes and relationships to enhance social capital.

Specific business aspects involve thinking, knowledge, orientation and

skills. An HR professional needs to possess executive-level thinking and

systems thinking. They also must have business knowledge, a strategic

orientation and skills such as financial literacy and being able to do

metrics. Personal attributes such as agility, attitude, innovation,

creativity, leadership, trustworthiness and responsiveness are of the

essence. Lastly, relationships entail shared norms and values, trust,

engagement and collaboration.

Keywords: business acumen; human resource professionals; personal

attributes; relationships; social capital.

INTRODUCTION

There are 600 million smallholders or, phrased differently, so-called “primarily necessity

entrepreneurs” in the sub-Saharan region of Africa, and they produce 80% of the continent’s food

(Food and Agriculture Organization, 2012; Rockefeller Foundation, 2011). In various ways, their

effect on economic growth has been widely acknowledged and has also generated extensive

scholarly research (Adler & Kwon, 2002; Coleman, 1990; Davidsson & Honig, 2003; Light & Dana,

2013; McKeever, Anderson, & Jack, 2014; Nahapiet & Ghoshal, 1998; Putnam, 2000). The

possibility exists that many of their achievements might not have been realised without various

internal processes and the support of resources and networks.

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URL: http://dx.doi.org/10.14738/abr.88.8690 198

Schultz, C. M., & Nel, P. S. (2020). Human Resource Business Acumen and Social Capital Applications in the African Context. Archives of Business

Research, 8(8). 197-211.

It is well-known that inadequate availability to, for example, credit facilities may prevent

smallholders and entrepreneurs from achieving their full potential (Bongomin, Ntayi, Munene, &

Malinga, 2018). Their business prospects, among other things, revolve around how the respective

co-ethnic community networks and resources of social capital (SC) will lead to successful business

ventures. This topic is under-researched in the scholarly literature (Teklehaimanot, Ingenbleek, &

Van Trijp, 2017).

However, extensive traction in doing successful business could also result from numerous other

sources, such as intellectual capital, which includes the so-called knowledge, skills, abilities and

other attributes (KSAOs) of individuals as well. This in turn means that human resources

professionals should possess human capital (HC) and organisation capital (OC). Although this

might be at a micro level, in some cases, the SC required by smallholders and entrepreneurs to

survive cannot be underestimated. To be more competitive, human resources (HR) professionals

could, for example, contribute to the activities of smallholders and entrepreneurs regarding doing

business by exhibiting business acumen to support them in the various countries where they do

business.

To execute the mentioned activities, various links exist between the aforementioned components,

but these are under-researched (Nyberg, Moliterno, Hale, & Lepak, 2014). Consequently, the

sustenance offered by intellectual capital (IC) that smallholders and entrepreneurs utilise require

could be provided by the role that HR professionals play in terms of their business acumen and

related skills. SC is also an important element in business creation, business process and overall

business success for smallholders and entrepreneurs, as pointed out in scholarly literature

(Bongomin et al., 2017). This conceptual approach is another under-researched topic.

In this article, the components of business acumen are elaborated on first; thereafter, the link with

the various facets of IC is explored. The links of IC to HC and OC are necessary to contextualise SC

and its link with human capital resources (HCRs) and business acumen to construct a conceptual

framework. The question arises: Which HR business acumen is necessary to network and to

develop relationships among people who live and work in a particular society? In other words,

which HR business acumen will assist in ensuring that SC is effective?

The objective of this study was to develop a conceptual framework for HRs business acumen and

SC applications in the African context. This framework will allow managers to deal with and

improve HR performance in the workplace.

LITERATURE REVIEW

Conceptualising business acumen

We began our examination by clarifying the nature of business acumen. According to Cohen (2015,

p. 209), business acumen is the “ability to understand and apply information to contribute to the

organization's strategic plan”. Wasniewski (2014) also mentions that business acumen consists of

strategic agility, business knowledge, systems thinking, economic awareness, effective

administration, HR and organisational metrics, analytics and business indicators as well as

knowledge of finance, accounting, sales, marketing, business operations and logistics, labour

markets technology, government and regulatory guidelines.

According to Ashton, Haffenden and Lambert (2004, p. 33):

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Archives of Business Research (ABR) Vol.8, Issue 8, August-2020

[F]or HR to be a business partner, it has to cut the mustard in the business debate. This means not

just understanding the business and its drivers, but anticipating business needs and proposing

solutions, and also articulating the quantified business opportunities, risks and impacts of people

management decisions.

Business acumen must therefore be incorporated into leadership development programmes of HR

specialists to stay relevant to rapidly emerging needs (Prince, 2008). Goodge (2006, p. 5) proposes

that HR professionals need to know the business inside out to build knowledge and credibility by

getting to know the business. Lee and Yu (2013) mentioned the HR business-related competencies,

as proposed by General Electric, Ingersoll Rand and CISCO, include business acumen, business

advisor and client engagement. Deloitte Consulting LLP and Bersin (2014, p.110–112) mentioned

that organisations need to develop HR skills in business management and that these skills should

entail a deep understanding of business and industry trends, what drives long-term competitive

advantage and how to drive innovation. HR should understand what the impact of their role is and

how they can improve the overall effectiveness of the organisation (Nel & De Wet Fourie, 2013).

Business acumen is the capability to bring about positive business outcomes and create capital

(Schultz & Van der Walt, 2015).

Relevant business acumen for HR professionals

Longenecker and Fink (2015) stated that HR managers ought to possess strong business acumen,

and that one of the foundations of being an exceptional HR professional is to possess strong

business expertise that goes well beyond the HR function itself. Ashton et al. (2004) are of the

opinion that the future of the strategic HR business partner lies in their ability to understand the

business and to identify the key measures of performance relevant to the organisation. A lack of

relevant business acumen limits the HR professional’s ability to influence business strategy and

advance business goals (Schultz & Van der Walt, 2015)

Baber, Waymon, Alphonso and Wylde (2015) described networking as a process that involves

initiation, maintenance and utilisation of relationships. Strategic connections indicate specific

interpersonal skills and concepts necessary to turn contribution-based workplaces into

collaborative workplaces. An HR professional must thus develop the acumen to be a strategic

connector in network-oriented workplaces to have an influence on big issues, such as strategy

execution, engagement, innovation, responsiveness, productivity, competitiveness and trust.

In the new business environment, trust plays a crucial role, without which collaboration in

business is unlikely. HR professionals equipped with certain competencies effectively build the

trust factor with internal and external contacts. While trust building is easier and faster in face-to- face or in-person networking, technology-based methods, such as email, chats and social

networking, help to maintain such networks. Once developed, the trust element strengthens the

relationships and, in turn, the strong relationship energises the whole network, which becomes

more productive and successful. With this new synergy, the networking is enhanced as a learnt

business skill by HR professionals.

HR professionals can easily and quickly develop networks that are based on trusting relationships,

and it is a learnt behaviour to execute it well. Advanced networking skills and connections of HR