Spiritual capital as the fourth capital in a TQM organization

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Zarz¹dzanie i Finanse Journal of Management and Finance Vol. 13, No. 2/2015
Zofia Zymonik*
Anna Dobrowolska**
Zofia Zymonik, Anna Dobrowolska
Spiritual capital as the fourth capital in a TQM
organization
Introduction
For at least three decades now spiritual capital has been considered
in organization and management studies as the fourth capital in an organization, apart from material, human (intellectual) and social capitals. It
represents a response to increasingly complex human resources management in the conditions of intensifying uncertainty of the environment and
‘greedy business’. This issue forms an integral part of behavioural theory
focusing on human behaviour and a reaction to a critical trend in management. It prefers such values as, for example, love for others, respect for human dignity, integrity and ethical conduct. On the one hand it is a relatively new notion in management studies, however on the other hand it is
an integral part of organization management. It is also related to quality
management. Its elements can be found in quality management concepts
(e.g. in TQM) and rules as well as in ISO international system standards.
The purpose of this paper is to:
1. Define the place for spiritual capital in organization management.
2. Identify the elements of spiritual capital in selected ISO management
system standards.
The literature review was used as a research method.
1. Capital of an organization
Capital is something available to an organization, which can be used
to fulfil its objectives. Conventionally, three types of capital in an organisation have been taken into account: material, human (intellectual) and
social capitals [Liu, 2007; Rima, 2013]. Material capital is defined
as a physical assets, such as land, buildings, equipment, etc. that is owned
* Assoc. Prof., Ph.D. Hab., Department of Management Systems, Faculty of Computer
Science and Management, Wroc³aw University of Technology, Wyspiañskiego 27, 50-370
Wroc³aw, [email protected]
** Ph.D. Eng., Department of Management Systems, Faculty of Computer Science and
Management, Wroc³aw University of Technology, Wyspiañskiego 27, 50-370 Wroc³aw,
[email protected]
148
by a company and used to produce goods or services. Social capital reflects the value of social networks, which is often evaluated by internal
trust and friendships among members, plus external reputation for any
individual or organization. Human capital, also called intellectual capital,
refers to knowledge and skills that may be used to generate wealth.
Recently, both theoreticians and practitioners have started to reflect
on the shape of organization management in the 21st century. A critical
trend has emerged in management science. Many of the developed concepts and methods are perceived as a tool for enforcing an increase in human efficiency in organizations [Su³kowski, Zawadzki, 2014, p. 44]. The
environment has changed to a highly uncertain one, in which employees
have problems with planning their future, management is in the dark
about their virtual employees’ actions and business is perceived as driven
by greed. Thence, the importance of a new capital, not related to the possession of tangible property, available knowledge or interpersonal relations, has been apprehended. This new capital has been called spiritual
capital. It takes account of, among others, the sense of human work, creativity, innovation and ethical behaviour. It has been also recognised
as the source of economic growth. Figure 1 presents correlations between
the four types of capital in an organization.
Figure 1. Correlation between four types of capital
Spiritual Capital
Human Capital
Social Capital
Physical Capital
Source: [Gracia, 2012, p. 130].
2. Spiritual capital definitions
–
–
–
–
There are several approaches to the definition of spiritual capital:
spiritual capital in a general sense,
spiritual capital as a religious capital,
spiritual capital as a part of social capital,
spiritual capital as a part of leadership.
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The most general definition of spiritual capital is based on the assumption that it forms a complementary part of the organization’s capital.
Spiritual Capital is a “power or advantage not rooted in material, intellectual, social realms.” [Liu, 2007]. It is an indispensable element of purposeful human actions: “Spiritual comes from its Latin root Spiritous that
which gives life or vitality to a system” [Liu, 2007]. “The spiritual in human beings makes us ask why we are doing what we are doing and makes
us seek some fundamentally better way of doing it. It makes us want our
lives and enterprises to make a difference [Zohar, Marshall, 2004]. “In literal sense, spiritual capital should be understood as that which gives vitality, life and animation to wealth, profit, advantage, and power “ [Rima,
2013].
In a narrow sense, spiritual capital is understood as a religious spiritual capital, defined as “the degree of mastery of and attachment to a particular religious culture” [Stark, Finke, 2000, p. 120]. The “mastery of” refers to the knowledge and familiarity needed to appreciate a religion
[Finke, 2003]. Or also “Patterns of religious beliefs and behavior, over
the life-cycle, between generations, and among family and friends”
[Iannaccone, Klick, 2003]. Spiritual Capital “is the effects of spiritual and
religious practices, beliefs, networks and institutions that have a measurable impact on individuals, communities and societies” [O’Sullivan,
Flanegan, 2008].
Spiritual capital is sometimes identified with a part of social capital.
In the opinion of Berger and Hefner “Spiritual capital might be thought
of as a sub-species of social capital, referring to the power, influence,
knowledge, and dispositions created by participating in a particular religious tradition” [Berger, Hefner, 2003].
In other approaches spiritual capital is perceived as an element
of leadership, defined as spiritual leadership, e.g. [Fry, 2003; Gracia, 2012].
“Comprising the values, attitudes, and behaviors that are necessary to intrinsically motivate one‘s self and others so that they have a sense of spiritual survival through calling and membership. This entails:
1. Creating a vision wherein organization members experience a sense
of calling in that their life has meaning and makes a difference;
2. Establishing a social/organizational culture based on altruistic love
whereby leaders and followers have genuine care, concern, and appreciation for both self and others, thereby producing a sense of membership and feel understood and appreciated.” [Fry, 2003, p. 269].
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Spiritual capital in this sense is also defined as “spiritual intelligence”
[Zohar, Marshall, 2004; Wingrove, Rock, 2008]. It is understood as a moral
attitude and leader’s values: “the uniquely human ability to make moral
choices and decide which problems we choose to solve, what goals we
think it is worth obtaining and our willingness to follow rules. Spiritual intelligence is at the root of our aspirations, our ambitions, our associations,
and our pain” [Zohar, 1997, p. 10].
The values of spiritual intelligence comprise such elements as
[Wingrove, Rock, 2008, p. 135]:
– vision and value led,
– honesty, humility,
– integrity, field independence,
– justice,
– celebration of diversity,
– respect for people,
– hard work,
– education – tendency to ask fundamental “why?” questions,
– intellectual curiosity, fulfilling potential,
– compassion, courage.
Similarly, Seligman [2005, p. 29; 2011] lists the virtues of a spiritual
man, that are also helpful in organization management, such as:
– wisdom and knowledge (curiosity of the world, creativity, willingness
to learn, intelligence, cognitive distance),
– courage (integrity, persistence, bravery and valour),
– humanity (love, goodness),
– justice (impartiality, diligence),
– temperance (self-control, modesty and humility, judiciousness, generosity),
– transcendence (appreciation for beauty and harmony, gratitude, openness to the future).
Spiritual capital in this sense is incorporated in the principles of positive psychology and is inseparably linked to organizational culture.
For this reason positive psychology has become an inspiration for
some researchers in management science. For example, researchers from
the University of Michigan, Cameron, Dutton and Quinn, examine,
among others, the possibilities of motivating people to work by positive
organizational culture [Cameron et al., 2003; Dutton et al., 2010].
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3. Management and spiritual capital
Modern organizations are based on the assumption of continuous development, relying on an increase in efficiency. They adopt management
objectives that can be classified with reference to the four type of capital:
material, social, human and spiritual. Table 1 presents the objectives and
elements of organization management typical for each type of capital.
Table 1. Organization management objectives and resources, with regard to
material, social, human and spiritual capital types
Type of capital
Management objectives
Management elements
Material capital
Effective use of material
resources.
Management of material
resources (e.g. fixed assets,
maintenance).
Social capital
Effective employee
management.
– Employee management.
– Organizational structure.
– Incentive system.
– Process management.
Human/
Intellectual
Capital
Enhancement of employees’ Knowledge management
knowledge and skills.
(training, education).
Spiritual capital
Building of organizational
– Selection of employees.
culture (employees’
– Formulation of objectives
behaviours) based on moral
based on ethics and
principles and ethics.
spiritual development.
Leadership based on
spiritual values (e.g.
integrity, ethical conduct).
Source: Own elaboration.
All types of capital have to be managed in the organization in a structured manner, taking account of their mutual interactions and interactions
with the environment.
4. Spiritual capital in ISO standards
There is no standard focusing on spiritual capital. However, some
of its elements can be found in system standards for organization management, established by ISO. Table 2 presents the elements of spiritual capital
contained in selected ISO standards.
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Table 2. Elements of spiritual capital in selected ISO system standards
Title of the standard
Elements of the standard contents concerning spiritual
capital
ISO 9000:2005
In the definition of quality, specifying the classes
of quality characteristics (item 3.5.1), a group
Quality management
containing behavioural features, e.g. curtesy, honesty,
systems.
veracity, is listed as one of the classes.
Fundamentals and
vocabulary.
ISO 9001:2008
There are no direct references to the elements
of spiritual capital. Only loose links can be found
Quality management
in the following terms: “management responsibility”,
systems.
“customer requirements” and “customer satisfaction”.
Requirements.
Management responsibility (item 5.2): “Top
management shall ensure that customer requirements
are determined and are met with the aim of enhancing
customer satisfaction”.
ISO/DIS 9001:2014
There are no direct references to the elements
of spiritual capital. The following terms can be referred
Quality management
to spirituality: “management responsibility”,
systems.
“customer requirements” and “customer satisfaction”.
Requirements.
ISO 9004: 2009
Managing for
the sustained success
of an organization –
A quality
management
approach.
ISO 31000:2009
Risk management –
Principles and
guidelines.
There are some references to the term “ethics” and
responsibility:
item 4.4 “Interested parties’ needs and expectations”:
“Needs and expectation of the interested parties:
society: needs of ethical behaviour”.
item 6.31 “Management of people”: “people
management should be performed through a planned,
ethical and socially responsible approach”.
The following terms can be referred to spirituality:
corporate governance, responsibility at different levels
in the organization, organizational culture, good
relations with internal and external stakeholders,
reliability, reputation, trust, helping others.
Title of the standard
ISO 26000: 2010
Guidance on social
responsibility.
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Elements of the standard contents concerning spiritual
capital
The following terms can be referred to spirituality:
responsibility, ethical conduct, integrity (fair
operational practices), justice, safety, education, respect
(respect for natural resources and biological diversity),
compensation, alleviation of poverty, trust.
The standard provides a definition of ethical conduct
(item 2.7), describing it as “the conduct compliant with
the adopted rules of correct or appropriate behaviour
in the context of a specific situation and consistent with
the international standards of conduct.” The standard
states that social responsibility (item 2.18) means
the responsibility for the influence exerted on
the community and the environment by decisions
taken by the organization, which can be ensured by
“transparent and ethical conduct”.
Source: Own elaboration.
The overview of selected management standards has demonstrated
that they contain only few elements related to spiritual capital. A general
term, ethics, occurs most often. The largest number of references to spiritual capital can be found in ISO 26000, a standard regarding social responsibility, which is in the form of a recommendation for business organizations. It can be explained by the specific nature of spiritual capital. It is not
susceptible to normalisation, particularly in the standards addressed to
organizations functioning in different cultures.
Conclusion
The significance of the role fulfilled by capital in the organization has
changed over time. At present, numerous publications emphasise the special meaning of human/intellectual capital affecting the achievement
of competitive advantage (quick changes, new technologies that require
in-depth knowledge). It has been highlighted, however, that the sustaining of competitive advantage for a longer time entails support provided
by spiritual capital. It prefers commonly recognised values, elaborated
over millennia by philosophers and basic religions (Judaism, Christianity
and Islam) as well as by good managerial practices. The analysis of selected ISO system standards has demonstrated that they contain only
scarce references to the elements of spiritual capital. The application
154
of these standards in organizations without taking account of the principles inherent in spiritual capital, based on responsibility, may hinder or
even prevent the development of the organization.
References
1. Berger P.L., Hefner R.W. (2003), Spiritual Capital in Comparative Perspective, http://www.metanexus.net/spiritual_capital/pdf/Berger.pdf
2. Cameron K.S., Dutton J.E., Quinn R.E. (2003), Positive Organizational
Scholars, – Foundations of a New Discipline, Berrett-Koechler Publishers,
Inc., San Francisco.
3. Dutton J.E., Roberts L.M., Bednar J. (2010), Pathways for Positive Identity
Construction at Work: Four Types Positive Identity and the Building of Social Resources, “Academy of Management Review”, Vol. 35, No. 2.
4. Finke R. (2003), Spiritual Capital: Definitions, Applications, and New Frontiers, Prepared for the Spiritual Capital Planning Meeting, October
10–11.
5. Fry L. W. (2003), Toward a theory of spiritual leadership, “The Leadership
Quarterly”, Vol. 14.
6. Gracia C. (2012), Spiritual Capital the New Border to Cross, “Journal
of Applied Ethics”, Issue 3.
7. Iannaccone L.R., Klick J., (2003), Spiritual Capital: An Introduction and
Literature Review. Preliminary draft, prepared for the Spiritual Capital
Planning Meeting, October 9–10, Cambridge, MA.
8. IS0 9000: 2005, Quality management systems. Fundamentals and vocabulary.
9. ISO 9001: 2008, Quality management systems. Requirements.
10. ISO/DIS 9001: 2014, Quality management systems. Requirements. (draft)
11. ISO 9004: 2009, Managing for the sustained success of an organization –
A quality management approach.
12. ISO 26000: 2010, Guidance on social responsibility.
13. ISO 31000: 2009, Risk management – Principles and guidelines.
14. O’Sullivan M., Flanegan B. (ed.) (2008), Spiritual Capital: Spirituality
in Practice in Christian Perspective,
15. Liu A. (2007, 2008, 2010), 4Capital and Performance. The RM Institute,
http://www.researchmethods.org/4capital.htm.
16. Rima S.D., (2013), Spiritual Capital. A Moral Core for Social and Economic
Justice, Gower.
155
17. Seligman M. (2005), Prawdziwe szczêœcie. Psychologia pozytywna a urzeczywitnienie naszych mo¿liwoœci trwa³ego spe³nienia, Media Rodzina,
Poznañ.
18. Seligman M. (2011), Pe³nia ¿ycia. Nowe spojrzenie na kwestiê szczêœcia
i dobrego ¿ycia, Media Rodzina, Poznañ.
19. Stark R., Finke R. (2000), Acts of Faith. Explaining the Human Side of Religion, University of California Press.
20. Su³kowski £., Zawadzki M. (ed.) (2014), Krytyczny nurt w zarzadzaniu,
Difin, Warszawa.
21. Wingrove K.A., Rock M. (2008), Spiritual Intelligence and Transformational Leadership – A Values Perspective, “CSL Leadership Review”,
Vol. 2, Issue 2.
22. Zohar D., Marshall I. (2004), Spiritual Capital: Wealth We Can Live By.
Berrett-Koehler Publishers, Inc, San Francisco.
23. Zohar D. (1997), ReWiring the Corporate Brain, Berrett-Koehler Publishers, Inc., San Francisco.
(Summary)
The purpose of the paper is to define spiritual capital in organization management and identify the elements of spiritual capital in selected ISO system standards. Spiritual capital is often called the fourth capital in an organization, apart
from material, human (intellectual) and social capitals. The issue of spiritual capital has been investigated against the behavioural management theory and
the critical trend in management. The research has focused on the analysis of concepts referring to this capital. It has been concluded that standardised systems for
organization management contain only few elements of spiritual capital.
Keywords
capital, spirituality, organization, management, standard

Spiritual capital as the fourth capital in a TQM organization

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