Why Psychological Capital Matters?

Why Psychological Capital Matters?-1

Why Psychological Capital Matters?

July 2, 2019

Economical Capital + Human Capital + Social Capital + Psychological Capital = Competitive advantage


In a competitive and rapid changing world, organizations have to evolve with agility to survive in fierce competition. There are four types of capital leaders should invest to increase an organization’s competitive advantage:


Economical Capital – Financial strength of an organization, investment and resources in monetary terms

Human Capital – Education, knowledge, skills, ability, capacity and attributes of people

Social Capital – Interpersonal relationships, a shared sense of identity and belongingness of certain social groups

Psychological Capital (PsyCap) – The positive and motivational mind state consisting of the elements of Hope, Efficacy, Resilience and Optimism

Among the four types of capital, PsyCap is the most undervalued one. With an origin from Positive Psychology, PsyCap is a model proposed by Luthans, suggesting a practical framework to increase organization’s competitiveness. It greatly increases the well-being and productivity of employees. The best thing about PsyCap is: It does not incur large amount of investment. It is a cost effective way to increase organization’s competitiveness.

Even though many organizations are interested in developing employees psychologically, they have no idea how PsyCap can be developed for business success. In fact, PsyCap is a well-researched model that learning programs can be planned and designed with it.

Learn more about how you can enhance your organization’s competitiveness through a training program developed from the PsyCap H.E.R.O. framework.

Luthans, F., Luthans, K. W., & Luthans, B. C. (2004). Positive psychological capital: Beyond human and social capital.


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<Further Reading>

HOPE bring you around the World

The Birth of HERO – A Motivational Leadership Program



Leo Ng

Consultant (Assessment & Analysis)

I/O Psychologist



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