Discussion and conclusions
At the outset of this paper, it was noted that much of the existing literature has focused on either human capital accumulation or human capital depletion. As such, we lack a complete picture of the nature of human capital flows in the business failure process. In an attempt to address this lacuna in our understanding, we developed an integrated conceptual model which explicates dynamic inward and outward flow of human capital in processes leading to business failure. The detrimental effects of the departure of highly skilled individuals from declining firms include hampering turnaround efforts and depleting the knowledge base of the firm. However, the analysis emphasises the benefits of the departure of highly skilled individuals in declining firms in paving the way to bring in new blood and perspectives to restore and develop the business. The analysis also highlights that inward flows may stem from actions to generate a turnaround by turning to highly skilled individuals and organisations with prior experience of generating successful turnarounds. The analysis indicates that outflows can be triggered by factors such as attempts to mitigate stigmatisation, diminished value of human capital and pursuit of more promising opportunities elsewhere. Thus, we provide a comprehensive set of factors that influences the direction and flow of human capital just before business failure. The inflows and outflows are linked through third-party organisations such as talent brokers and management consultants, who play a pivotal role in not only influencing the pace of decline leading to collapse but also in signalling to markets the benefits of fresh human capital inflows.
