Eight Forms of Capital Free Sample

Question: Discuss about the Six Forms of Capital used by Businesses. Answer: The model of organization draws on various capital inputs and its shows how the operations of organization transform them into outputs. The major purpose of this reflective journal is to explain the various kinds of capital, without which the business cannot survive in the global environment. The journal includes my self-reflection on six forms of capital, which are needed by every business. Companies can create the value by combining the qualitative and quantitative information, which is from where the six types of capital come in. Generally, the capitals are defined as the stocks of value, which are influenced or converted by the outputs or activities of the organization. The journal classifies them as intellectual, manufactured, financial, human, natural, relationship and social. The concept of types of capital has different meanings. All are capitals, which have the capacity to generate the flow of desirable results. For a business, it is essential to maintain all the six kinds o f capital for sustainable economic development. Capitalism has not just been about the financial capital. It may be possible that the people are not aware about it. The businesses deal with different forms of capital. Without these kinds of capital, the businesses cant survive in the long run. Generally the people think that money is only the form of capital, but this is not right. Other than money, the organizations rely on the land, human resource, energy, water and community. My personal experience says that we have managed only financial part of the business (Roland Landua, 2011). We have accepted the measures on show to calculate profits, debts and assets. But generally, we talk very less about the kinds of capital except financial capital. The businesses do not know that other kinds of the capital may make or break them easily as financial capital can do. From an extensive research, I found that there are six forms of capital, which are essential for the business, such as; intellectual capital, manufactured capital, financial capital, human capital, natural capital, relationship and social capital. These capitals are given by McElroy (Gleadle, 2011). All forms of the capitals have their own importance in the business. The below diagram indicates that how the organizational model draws the flow of capital inputs and it shows how the processes convert them in outputs. When I looked at the financial capital, it was very familiar to me. It was included the available funds to the business, equity finance, money, securities, currencies and other financial instruments and debt also. If you want to become finance professional, then you can expand your knowledge about the implications of Basel III and other changes in the accounting policies (Cavinato, 2012). After studying the human capital, I understood that human capital was included in how the employer values the employees, but earlier I was not aware about its complications. It is a new concept, so it was very interesting to find out more. Analyzing human capital made me realize that a business can improve its operations by motivating and engaging the employees. Furthermore, intellectual capital can be defined as knowledge asset. I have discovered that the global education system is focused on communicating the intellectual capital, whether or not it is very important form for making successful and strong communities (Kohl, 2016). It is analyzed that intellectual capital is inspired by the need for social or financial capital. This further helped me in understand that intellectual capital can be included in the social and relationship capital. Social capital comprises of groups and teams, who work together and they share their intellectual capital for attaining a common goal. I learned that the people, who have good social capital, can take the favors, affect the decisions of the management and communicate proficiently. This knowledge makes me obvious that human capital is a mixture of intellectual and social capital. As we know, that production process cannot be started without the availability of fixed assets and raw materials. Manufacture d capital also has the similar importance like other forms of capital. It includes the tools, buildings and machines (Thiele, 2013). It seems integral to the success of organization. I came to know that it includes the distribution networks and products and how these goods are delivered to their customers. From the analysis, I understood that the all the capital sit in the natural capital, because it includes the natural sources like; ecosystem and climate changes. We can use the living capital term for the natural capital. I learned from the Jason Eaton of Social Thread LLC that the capital can be in the form of debt or equity. The social capital provides a person favors or power to influence the decision making to other person in the organization. I realized that the capitals are interconnected with each other. For example, what will a manufacturing company do, if its water supply stopped? What will happen to the stock price of a fashion retailer, if it will be accused of harming the children and animals? So, the organizations work with the concept of Multi-capitalism for sustainable development (Waldstorm Svendsen, 2008). I know that this is a weird term, but it includes the economic system in which the business run and technique of sustainable growth. This surprised me that our organizations are facing the problem of sustainability as we are using the stocks of human, social and natural faster than their production. I found that this problem can be resolved by controlling the rate of consumption. This can help in sustaining the capitals in the long run. I believe that by sustaining and trying to surge the stocks of these capitals, we can subsist the income without decreasing the capital. It is a responsibility of every business to manage all the capitals sustainably (Kline, 2015). I suggest the organizations that they should create a multi-capital scorecard as a measurement and report system. This scorecard can help the organization in assessing the performance in terms of effect on all the kinds of capital, not just financial capital. This was also proven to me after considering the sustainable society, which include various features of these capitals. References Amouzesh, N., Moeinfar, Z. Mousavi, Z. (2011). Sustainable Growth Rate and Firm Performance : Evidence From Iran Stock Exchange. International Journal of Business and Social Science. Vol. 2, pp. 249-255. Cavinato, L. (2012). Ethnic Entrepreneurship and Forms of Capital. GRIN Verlag.Gleadle, C. (2011). Sustainable Growth Through Sustainable Business:A Business Persons Easy Guide To - What, Why and How Sustainability Is the Only Way Forward. CreateSpace Independent Publishing Platform. Kline, M. (2015). The 6 Kinds of Capital Your Business Cant Survive Without. Retrieved from https://www.inc.com/maureen-kline/the-6-kinds-of-capital-your-business-can-t-survive-without.html. Kohl, K. (2016). Becoming a Sustainable Organization: A Project and Portfolio Management Approach. CRC Press. Roland, E. Landua, G. (2011). 8 Forms of Capital. Retrieved on April, 2011 from https://www.appleseedpermaculture.com/8-forms-of-capital/. Thiele, L.P. (2013). Sustainability. John Wiley Sons. Waldstorm, C. Svendsen, G.L.H. (2008).On the capitalization and cultivation of social capital: Towards a neo-capital general science. The Journal of Socio-Economics, Vol. 37, 1495-1514.