Regulatory agencies, the financial community and the investing public need to be aware that more effective investment recommendations and decisions require human capital analysis. It is important to the work of securities analysts, their clients and their industry. Bassi, Lev, Mcmurrer and Sissfield (2001) suggest that non-financial insights, particularly human capital related insights, make up a large proportion of investment decisions. More rigorous qualitative human capital analysis can illuminate the working of an organisation in a way that primary financial data on its own cannot achieve need. A model for outlining the human resource drivers of sustainable human capital is introduced and discussed in response to this need. In essence, an integrated approach is needed for the purpose of making more transparent investment recommendations. In Australia the Regulatory Agency, the Australian Securities and Investment Commission can assist in the adoption of this integrated investment process through the Training of Financial Product Advisors, Licensing Policy Statement 146.
Get full access to this article
View all access options for this article.
References
1.
American Management Association (AMA) (1996) Survey: Corporate Downsizing, Job Elimination, and Job Creation, AMA, Washington.
2.
Australian Securities and Investment Commission 2000/2001, Annual Report 2000/2001, ASIC: 1–108.
3.
AlymerS. (2004) ‘Greenspan Attacks White Collar Crime’, Sydney Morning Herald, 19 April: 10.
4.
BassiL.J., LevB., LowJ., McMurrerD.P. and SissfieldG.A.G. (2001) ‘Measuring Corporate Investments in Human Capital’, In BlairM.M. and KochanT.A. (Eds.), The New Relationship: Human Capital in the American Corporation, Brookings Institute, New York, pp. 334–382.
5.
BernsteinR. (2001) Navigate the Noise: Investing in the New Age of Media and Hype, Wiley, New York.
6.
BilmesL.WetzkerK.XhonneuxP. (1997) ‘Value in human resources: A strong link between companies’, Financial Times, 10 February.
7.
Blattel-MinkB.KramerC.MischauA. (2000) ‘The attitudes of women toward the compatibility of family and employment: the meaning of social situation for the idea of gender roles’, Equal Opportunities International, Vol. 19, No. 1, pp. 1–11.
8.
BoniL.WomackK.L. (2002) Wall Street's Credibility Problem: Misaligned Incentives and Dubious Fixes?, The Wharton School, University of Pennsylvania.
9.
CarlopioJ. and O'DonnellL. (1994) ‘Interpersonal Communication’, In CollinsR. (Ed.), Effective Management, CCH, Sydney.
10.
CleggB.WhyteJ. (2002) ‘Investors Seek to Recoup Millions’, The Weekend Australian Financial Review, May 25-26, 1, Sydney.
11.
CleggB.WhyteJ. (2002) ‘The truth about Australian stockbrokers — Australian stock brokers exposed’The Weekend Australian Financial Review, May 25-26, 1, 21-23, Sydney.
12.
CollinsJ.C.PorrasJ.I. (1994) Built to Last: Successful Habits of Visionary CompaniesHarper Collins, New York.
13.
CollinsJ. (2001) ‘Good to Great: Why some companies make the leap, and others don't’, Harper Business, New York.
14.
CollinsL. (2002) ‘Stock brokers under pressure’, Australian Financial Review, May 23: 21, Sydney.
15.
CoxT.O.BlakeB. (1991) ‘Managing cultural diversity: implications for organizational competitiveness’, Academy of Management Executive, Vol. 8, No. 3: 289–309.
16.
DeleryJ.E. (1998) ‘Issues of fit in Strategic Human Resource Management: Implications for Research’, Human Resource Management Review, Vol. 8, No. 3, pp. 289–309.
17.
DeleryJ.E.DotyD.H. (1996) ‘Modes of theorizing in strategic human resource management: Tests of universalistic, contingency and configurational performance predictions’, Academy of Management Journal, Vol. 39, No. 4, pp. 802–835.
18.
DunphyD.StaceD. (2001) Beyond the Boundaries: leading and recreating successful enterprises, McGraw-Hill, Sydney.
19.
DunphyD. (Ed.) (2000) Sustainability: The Corporate Challenge of the 21st Century, Allen and Unwin, Sydney.
20.
DunphyD.GriffithsA. (1998) The Sustainable Corporation: Organisation Renewal in Australia, Allen and Unwin, St Leonards.
21.
Economist (2002) The Economist, December 14: 67
22.
Economist (2002) ‘The Wickedness of Wall Street’, The Economist, June 8, pp: 11–12.
23.
Economist (2002) ‘Analysts on Wall Street, Sell? Dishonest Research and Gullible Investors’. The Economist, May 11: 68.
24.
Economist (2002) ‘Wall Street, What Glitters Ain't Gold’, The Economist, April 13: 70.
25.
FernandezF.A. (2001) ‘The Role and Responsibilities of Securities Analysts’. Securities Industry Association Research Reports (August): 3–10.
26.
Financial Services Reform Act (2001) Policy Statement 146: Licensing: Training of Financial Product Advisers, (PS 146), Financial Services and Markets, Chapter 7, and regulations, 8 October, 2001.
Financial Times (2001) ‘Shoot all the analysts’. Financial Times, March 20: 21.
29.
FloodR.L.JacksonM.C. (1991) ‘The nature of systems thinking’, in Creative Problem Solving: Total Systems Intervention, Wiley, Chichester, pp. 5–14.
30.
GalleryG.GalleryN.HsuC-M. (2002) ‘The Associations Between Management and Analysts' Earnings Forecasts in the Australian Continuous Disclosure Environment’, AANZ Conference, Cairns, (2002): 10.
31.
GasparinoC. (2001) ‘Deals and Deal Makers: Outlook for Analysts: Skepticism and Blame’Wall Street Journal, June 13, c1. New York.
32.
GebertD.BoernerS. (1999), ‘The open and closed corporation as conflicting forms of organisation’, The Journal of Applied Behavioural Science, Vol. 35, No. 3, pp. 341–359.
33.
GhoshalS.BartlettC.A. (1997) The Individualized Corporation, Harper Collins, New York.
34.
GlendonM.A. (1998) ‘The Work-Family Dilemma: How we Got There; Paths Out of the Mess’, In MackaveyM.G. and LevinR.J. (Eds.), Shared Purpose: Working Together to Build Strong Families and High-Performance Companies, 1st Edn, AMACOM, New York, pp. 9–22.
35.
GooginsB.K. (1997) ‘Shared responsibility for managing work and family relationships: a community perspective’, In ParasuramanS. and GreenhausJ.H. (Eds.), Integrating work and family: challenges for a changing world, 1st Edn, Praeger, Westport, Connecticut, pp. 220–231.
36.
GrahamBenjaminDoddDavid L.Cottle TathamSidney (1962) Security Analysis: Principles and Techniques, McGraw Hill, New York.
37.
GummensonE. (1991) Qualitative Methods in Management Research, Sage Publications, Inc., Newbury Park, CA.
38.
GuptaB.IyerL.S.AronsonJ.E. (2000) ‘Knowledge management: practices and challenges’, Industrial Management and Data Systems, Vol. 100, No. 1, pp. 17–21.
39.
HakimC. (1987) Research Design: Successful Designs for Social and Economic Research, 2nd Edn, Routledge, London.
40.
HarrisL.C.OgbonnaE. (2001) ‘Strategic human resource management, market orientation and organisational performance’, Journal of Business Research, Vol. 51, pp. 157–166.
41.
IttnerC. (2002) ‘Technological Wizardry Aside, How Can the Internet Reshape Your Business’, internet communication from Frank Theophile, Serco. (2002). Wharton School of Business, (knowledge.wharton.upenn.edu/articles). 6-1-(2002).
42.
KallebergA.L.KnokeD.MarsdenP.V.SpaethJ.L. (1996) Organizations in America: Analyzing their Structures and Human Resource Practices, Sage Publications, Inc., Thousand Oaks, CA.
43.
KotterJ.HeskettJ. (1992) Corporate Culture and Performance, Free Press Macmillan, New York.
44.
LewinR.RegineB. (1999) The Soul at Work: Unleashing the Power of Complexity Science for Business Success, Orion, Lonon.
45.
LewisS.KaganC.HeatonP. (2000) ‘Managing work-family diversity for parents of disabled children’, Personnel Review, Vol. 29, No. 3, pp. 417–430.
46.
MichaelyR.WomackK.L. (1999) ‘Conflict of Interest and the Credibility of Underwriter Analyst Recommendations’, Review of Financial Studies, vol. Special (1999)no. 12, pp. 653–686.
47.
MilesM. (1979) ‘Qualitative Data as an Attractive Nuisance: The Problem of Analysis’, Administrative Science Quarterly, 24: 590–601.
O'DonnellL. (1994) ‘Managing the Network Organisation’, Management Matters, CCH, Sydney.
50.
O'ReillyC.A.PfefferJ. (2000) Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People, Harvard Business School Press, Boston.
51.
RanftA.L.LordM.D. (2000) ‘Acquiring New Knowledge: The Role of Retaining Human Capital in Acquisitions of High-Tech Firms’, The Journal of High Technology Management Research, Vol. 11, No. 2, pp. 295–319.
52.
RoomeN.J.E. (1998) Sustainability Practices for Industry: The Future of Corporate Practice, Island Press, Washington DC.
53.
RoyalC. (2000) Internal Labour Markets and Human Resource Management in an International Investment Banking Institution: Deal Makers in the Global Economy, PhD dissertation, University of NSW.
54.
RoyalC. (2001) ‘Recruitment, Selection and Internal Labour Markets — Evidence from Three Divisions of an International Investment Bank’, Working Paper Series No. 137: School of Industrial Relations and Organisational Behaviour, University of New South Wales.
55.
RoyalC. (2003) ‘Snakes and Career Ladders in the Investment Banking Industry. The Making of Barclays De Zoete Wedd’, (BZW), 1982–1996, Accounting, Business and Financial History, Vol. 13, No. 2, pp. 233–262, UK, (July 2003).
56.
RoyalC.AlthauserR.P. (2003) ‘The Labour Markets of Knowledge Workers: Investment Bankers' Careers in the Wake of Corporate Restructuring’, Work and Occupations, Vol. 30, No. 2, pp. 214–233.
57.
SchackJ. (2001) ‘Should Analysts Own Stock in the Companies They Cover?’Institutional Investor April, pp. 60–71.
58.
SchusterF.E. (1986) The Schuster Report: The Proven Connection Between People and Profit, Wiley, New York.
59.
SengeP. (1992) ‘Ending the war between work and family’, in The Fifth Discipline: The Art and Practice of the Learning Organization, Griffin, Adelaide, pp. 306–312.
60.
StaceyR.D. (2001) Complex Responsive Processes in Organizations: Learning and Knowledge Creation, Routledge, Lonon.
61.
SzaryczC. (2001) ‘Developing Strategic Management Systems: Integrating the Balanced Scorecard (BSC) Rolling Forecasts, Economic Value Added (EVA) and Activity Based Costing (ABC) to improve your strategic performance’, Beyond Budgeting Conference Proceedings, Sydney, pp. 1–7.
62.
TrevelyanR. and O'DonnellL. (2001) ‘Systems for Sustaining Change’, In TrevelyanRose, (Ed.), Systems for Change — Course Material for Executive MBA Program, AGSM, University of NSW, Sydney.
63.
TurnerD.CrawfordM. (1998) Change Power: Capabilities that drive corporate renewal, Business and Professional Publishing, Sydney.
64.
Watson Wyatt Worldwide Research (2002) Human Capital Index: Linking Human Capital and Shareholder Value, Watson Wyatt Worldwide Research, Washington, D.C.
65.
WhyteJ. (2002) ‘Research Shake Up on the Cards’. Australian Financial Review, 23 May: 21, Sydney.
