Relationship between type of capital and company boundaries

• The change in the type of capital a company focuses on affects its boundaries.

• When the capital of interest is money and property

  • Clear boundaries are created by a legal system that recognizes ownership in legal entities.
    • (When did ownership rights become available to legal entities that are not natural persons?)
  • Mr. Company owns the goods and money.

• When the capital of interest is knowledge - knowledge capital is in the brain of the individual employee and moves with the employee when the employee changes jobs.

  • Under current law, a company cannot force an individual who wants to change jobs to stay with the company.
    • Slaves were once owned by their employers, but that was a long time ago.
    • Knowledge capital is drained not by the will of the company, but by the will of individual employees.
  • With respect to the acquisition of capital
    • As for physical capital, the company was able to purchase factory machinery at its will.
    • Knowledge capital is difficult to acquire even if the company has the will, without the motivation of individual employees who serve as the container for that capital.
  • Capital outflows and inflows at will of individuals beyond the boundaries of the company

• When the capital of interest is social relations

  • Capital is between people.
  • The metaphor of “capital accumulation within the company” no longer fits.
    • Strange that “SOC Accumulation Strategies.”
    • Even within the company alone, productivity would certainly improve if trust among employees were increased.
    • However, rather than closing the company to the outside world, it is better to connect with the outside world as well.
    • A “strategy for the development of social relational capital” that connects and expands more and more.
  • More “Blurring of company boundaries” # Blurring of organizational boundaries # Blurring of boundaries
    • Not so important “if you are an employee or not.”
    • Retirees have more social capital than new hires.
    • It is more beneficial to maintain a trusting relationship with retirees
  • Developing social relationship capital is not limited to making connections with your company.
    • Creating value by helping others connect
    • The value comes back in the form of increased trust in the company. - How to use social capital
    • [There is no Mr. Company.

• Real companies do not do business with just any one capital.

  • Even if a company actively invests in building networks with external parties and in motivated employees’ willingness to learn, the money that underlies this investment is conventional “capital owned by the company.
  • A system of three different natures of capital interacting with each other
    • Social relational capital contributes to the efficiency of acquiring knowledge capital and financial capital
    • Knowledge capital contributes to the efficiency of financial capital acquisition
    • Financial capital is needed as a source of funds for other actions to acquire capital.
  • It’s this superposition.
    • There are three levels of perspectives: “focus only on money and physical capital,” “focus on money, physical capital and knowledge capital,” and “focus on money, physical capital, knowledge capital and social-relationship capital.
    • Accounting standards tend to focus only on money and physical capital
      • Equipment is capitalized when money is used to buy equipment.
      • Not accounted for when money is spent to acquire knowledge capital or social relationship capital.
      • There are cases where cash is converted to equipment and the books look healthy but the cash flow is not, so even under current accounting standards, attention should be paid to cash flow, not just balance.

The one I tried to draw 20 days ago at Company Mental Models, Evaluation Systems, and Engineer Learning but couldn’t get it right was retrieved. Thank goodness.

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