Human resource development, social capital, emotional intelligence : Any link to productivity

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Human resource development, social capital, emotional intelligence Any link to productivity? Kit Brooks and Fredrick Muyia Nafukho University of Arkansas, Fayetteville, Arkansas, USA Abstract Purpose – This article aims to offer a theoretical framework that attempts to show the integration among human resource development (HRD), social capital (SC), emotional intelligence (EI) and organizational productivity. Design/methodology/approach – The literature search included the following: a computerized search of accessible and available material using the key words “human resource development”, “emotional intelligence”, “social capital”, “human capital”, “organizational productivity”, “productivity”, and “organizational performance”. Findings – The literature review provides evidence that it is logical to assume that the relationship among HRD, social capital, emotional and organization productivity is highly integrated. This finding influenced the authors to conceptualize an integrated model that illustrates the interconnectivity of HRD, social capital, emotional intelligence and organizational productivity with internal and external environmental factors. Research limitations/implications – The integrated model conceptualizing the dynamic relationship among HRD, social capital, emotional intelligence and organization productivity is based primarily on the review of the literature. Originality/value – The integrated model developed by the authors provides a framework that HRD scholars and practitioners may use to develop innovative instruments to measure the relationship among HRD, EI and SC and their subsequent impact on organization performance. Keywords Human resource development, Social accounting, Intelligence Paper type Literature review This paper seeks to accomplish three objectives. The first is to provide meanings of human resource development (HRD), emotional intelligence (EI), and social capital (SC) and how they relate to organizational productivity. The second is to develop an integration model showing the complex relationships among HRD, EI, SC and organizational productivity. The third is to demonstrate the need for organizations to invest in people through HRD programs, EI activities and promotion of the development of social capital in order to remain competitive and succeed in the current ideas era characterized with uncertainty and inevitable change. Lack of recognition of the interconnection among HRD, EI and SC in the literature motivated the authors to write this paper. The research linking HRD and performance improvement is a relatively new body of literature and has endeavored to integrate economic theories, psychological theories and systems thinking models (Pate et al., 2000; Nafukho and Hinton, 2003; Nafukho et al., 2004; Swanson, 1999). The current literature specifically The current issue and full text archive of this journal is available at www.emeraldinsight.com/0309-0590.htm HRD, SC, EI: any link to productivity? 117 Received October 2004 Revised July 2005 Accepted November 2005 Journal of European Industrial Training Vol. 30 No. 2, 2006 pp. 117-128 q Emerald Group Publishing Limited 0309-0590 DOI 10.1108/03090590610651258

Transcript of Human resource development, social capital, emotional intelligence : Any link to productivity

Human resource development,social capital, emotional

intelligenceAny link to productivity?

Kit Brooks and Fredrick Muyia NafukhoUniversity of Arkansas, Fayetteville, Arkansas, USA

Abstract

Purpose – This article aims to offer a theoretical framework that attempts to show the integrationamong human resource development (HRD), social capital (SC), emotional intelligence (EI) andorganizational productivity.

Design/methodology/approach – The literature search included the following: a computerizedsearch of accessible and available material using the key words “human resource development”,“emotional intelligence”, “social capital”, “human capital”, “organizational productivity”,“productivity”, and “organizational performance”.

Findings – The literature review provides evidence that it is logical to assume that the relationshipamong HRD, social capital, emotional and organization productivity is highly integrated. This findinginfluenced the authors to conceptualize an integrated model that illustrates the interconnectivity ofHRD, social capital, emotional intelligence and organizational productivity with internal and externalenvironmental factors.

Research limitations/implications – The integrated model conceptualizing the dynamicrelationship among HRD, social capital, emotional intelligence and organization productivity isbased primarily on the review of the literature.

Originality/value – The integrated model developed by the authors provides a framework that HRDscholars and practitioners may use to develop innovative instruments to measure the relationshipamong HRD, EI and SC and their subsequent impact on organization performance.

Keywords Human resource development, Social accounting, Intelligence

Paper type Literature review

This paper seeks to accomplish three objectives. The first is to provide meanings ofhuman resource development (HRD), emotional intelligence (EI), and social capital (SC)and how they relate to organizational productivity. The second is to develop anintegration model showing the complex relationships among HRD, EI, SC andorganizational productivity. The third is to demonstrate the need for organizations toinvest in people through HRD programs, EI activities and promotion of thedevelopment of social capital in order to remain competitive and succeed in the currentideas era characterized with uncertainty and inevitable change. Lack of recognition ofthe interconnection among HRD, EI and SC in the literature motivated the authors towrite this paper. The research linking HRD and performance improvement is arelatively new body of literature and has endeavored to integrate economic theories,psychological theories and systems thinking models (Pate et al., 2000; Nafukho andHinton, 2003; Nafukho et al., 2004; Swanson, 1999). The current literature specifically

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0309-0590.htm

HRD, SC, EI:any link to

productivity?

117

Received October 2004Revised July 2005

Accepted November 2005

Journal of European IndustrialTraining

Vol. 30 No. 2, 2006pp. 117-128

q Emerald Group Publishing Limited0309-0590

DOI 10.1108/03090590610651258

linking HRD, EI, SC and organizational productivity is limited at best. Therefore, theaim of this paper is to develop a model that conceptualizes this linkage and to advancethe discussion regarding its relevance to practice.

MethodThe key research question to be answered in this paper is: does investment in HRD, EC,and SC pay in terms of organizational productivity? Productivity is defined as anincrease in output per unit of input employed. This means that for every input of labor,capital or management employed, an extra or additional output is achieved. It is theideal that every organization seeks to experience. To achieve the objectives of the studyand to answer the key research question, a critical analysis of relevant literature wasconducted. The literature search included the following: a computerized search ofaccessible and available material on human resource development, emotionalintelligence, and social capital, and a manual search of existing literature. Thecomputer searches accessed PRO QUEST, EBSCO, WebSPRIS, and INGENTA(UNCOVER) to search ERIC documents. To locate dissertations germane to theresearch question, Abstracts International Databases were searched using the keywords “human resource development”, “emotional intelligence”, “social capital”,“human capital”, “organizational productivity”, “productivity”, and “organizationalperformance”. The sections of the paper that follow provide information obtained fromthe search.

What is HRD?Human resource development (HRD) is presented in this paper as the delivery systemused by organizations to develop individuals through training and development, careerdevelopment and organizational development. As noted, “HRD is a concept thatcomprises a variety of activities and processes” (Mankin, 2001, p. 74). While manyunderstand the value of HRD to organizations, the meaning of HRD remainscontroversial. “Attempts to define the concept of Human Resource Development (HRD)by academics, researchers and practitioners are proving frustrating, elusive andconfusing” (McGoldrick et al., 2002, p. 18). Although a universally accepted definitionof HRD is non-existent, several scholars have attempted to identify its essentialelements. For instance, McLagan and Suhadolink (1989) grouped organizationdevelopment, training and development, and career development as the primary foci ofHRD. Swanson and Holton (2001, p. 4) define HRD as “a process for developing andunleashing human expertise through organization development and personnel trainingand development for the purpose of improving performance”. This definition is moreinclined towards individuals, organizations and work groups or teams. An exploratorystudy of the definitions of HRD concluded that HRD’s definitions were culturallyinfluenced and varied internationally in scope of activities, intended audiences, andbeneficiaries (McLean et al., 2003). McLean and McLean (2001) have tried to defineHRD from an international perspective as follows:

Human resource development is any process or activity that, either initially or over the longterm, has the potential to develop adult’s work-based knowledge, expertise, productivity andsatisfaction, whether for personal or group, team gain, or for the benefit of an organization,community, nation, or ultimately, the whole of humanity (p. 10).

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One cannot discuss HRD without acknowledging the various disciplines from which ithas borrowed. Human resource development has borrowed from other disciplines suchas systems theory, psychological theory, and most recently economic theory (Aliaga,2001; Swanson, 1999). The difficulty with defining HRD reflects the evolving nature ofthe field. As noted, “a definition of Human Resource Development is controversial, ithas traditionally been defined in the context of the individual, the work team, or theorganization” (McLean et al., 2003, p. 41). As noted, “an important question that iswidely asked today within human resource development is: what is HRD?” (p. 41). Oneexploratory study in the USA concluded that no common agreement exists regardingthe definition of HRD (Weinberger, 1998). Short et al. (2003) aptly expressed thedifficulty of defining HRD:

We, the authors, experience human resource development as a paradox. This is a time whenHRD appears to be at its strongest in terms of publications and research outputs and whenthe environment appears right for HRD to demonstrate clear value-added to key stakeholders.However, in other ways, HRD appears inner directed and without substantial impact” (p. 239).

Monica Lee, in her award winning paper entitled “A refusal to define HRD”, observed:

Each of us, in our professional lives, carries some responsibility as we contribute to whatHRD is becoming. We need to be aware that to attempt to define HRD is to serve political orsocial needs of the minute – to give the appearance of being in control. Instead I suggest weseek to establish, in moral and inclusive way, what we would like HRD to become, in theknowledge that it will never be, but that we might thus influence its becoming (Lee, 2001,p. 10).

In a more comprehensive definition, Gilley and Maycunich (2000) define HRD as:

. . . the process of facilitating organizational learning, performance, and change throughorganized interventions and initiatives and management actions for the enhancing anorganization’s performance capacity, capability, competitive readiness, and renewal (p. 6).

Garavan et al. (2000) show that HRD is mainly concerned with capabilities,psychological contracts, and learning organization/organizational learning. Holton(2000) argues that the debates on the meaning of HRD focus on the learning versusperformance perspectives. Thus learning, performance and change are three importantelements that define HRD. Regarding the controversy surrounding the definition ofHRD, it is noted, “HRD professionals, and in particular practitioners, need to learn howto ride the waves of change and view HRD in process rather than functional terms”(Mankin, 2001, p. 67). As defined above by various scholars, HRD has been found byother scholars to have a negative connotation of inhumane capitalism and the cult forproductivity (Bierema, 2000; Schied et al., 2001). The examination of the social capitalas an important variable in the performance of organizations in this article is meant toshow the urgent need to integrate HRD, SC and EI when discussing variables thatdetermine organizational performance. As noted, “HRD as a field of study has beenviewed as being supported by three theoretical foundations of economic, psychological,and system theories” (Yang, 2004, p. 142). The economic aspect of HRD is in support oforganizational productivity, while the psychological foundation supports theimportance of considering the emotional needs of people in organizations aspotential determinants of performance. Systems theory supports the need to vieworganizations from a holistic perspective and to acknowledge the interconnectedness of

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organizational performance, economic gain, social networks and social needs of peoplewithin organizations. Figure 1 illustrates this interconnectedness of people andprocesses within an organizational system. As illustrated in Figure 1, people inorganizations determine the production processes. Thus, by investing in peoplethrough HRD, by attending to people’s emotional intelligence and social capital issues,organizations should be able to better harness and allocate people’s talents. Figure 1illustrates the critical role that both the internal and external environments play indetermining people’s productivity. In Figure 1, the explicit relationship among HRD,EI, and SC as determinants of organizational productivity is displayed. In the latersections of this paper we use the term “integrated” to reflect most accurately therelationship among these four variables.

Social capital theoryIn this section of the paper, we discuss the meaning of social capital and its influenceon organizational productivity. Various economic theories have evolved and influencedorganizational operations during the past decade. This evolution has expanded thetraditional forms of capital, such as tangible assets like buildings and equipment, andnow includes neo-capital. These intangibles likewise contribute to organizationaldevelopment and growth. The term capital has gained currency in the literature, whichhas given rise to several variations of capital discussed in current literature. Thesevariations include human capital, relational capital, customer’s capital, intellectual

Figure 1.The relationship amongHRD, EI, SC andproductivity

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capital, and health capital (Nafukho et al., 2004). The theory of human capital inparticular is founded on economic theory and has been researched, tested, and proven.The analysis of training and development as investments in human capital waspioneered in the late 1950s and early 1960s through works of leading economicsscholars (Solow, 1956; Schultz, 1961; Denison, 1962; Mincer, 1962; Becker, 1964). Thecorrelation between worker knowledge and productivity has long been accepted.However, early definitions of human capital theory tended to equate workers’knowledge acquisition with their level of formal schooling. Correlating educationallevels with productivity and economic growth fostered the inference that moreschooling combined with work experience would subsequently lead to increasedproductivity and earnings.

More recently, social capital theory has emerged from sociology as a potentialinfluence on organizational performance. Social capital can be expressed as “theresources embedded in social networks accessed and used by actors [. . .] and can alsobe envisioned as investment by individuals in interpersonal relationships useful in themarkets” (Lin, 2001, p. 25). Coleman (1990) explains that in social capital, the socialrelationships are relations with predictive capacity and can be utilized to createsomething of value. Unlike human capital and traditional organizational assets, socialcapital is unique in that it is developed by and as a result of meaningful socialrelationships that individuals invest in creating together over time (Storberg, 2002). Inher excellent review of the evolution of social capital theory, Storberg (2002) indicatesthat, like human capital theory and HRD, conflicting definitions and rationale for itsmeasurement can be found in the management, sociology, and HRD literature.However, Lin (2001) suggests that while definitions may differ, most scholars agreethat social capital “benefits both the collective and individuals of the collective” (p. 26).

Opposing approaches to social capital are most evident when considering itsrelationship to culture. Cohen and Pursak (2001a, b), define social capital as “trust,mutual understanding, and shared values and behaviors” (p. 4), and Putnam (1993)states that social capital includes networks, norms and trust that serve to increasesociety’s productive potential. Conversely, Lin (2001) believed that while culture, trust,and shared values may promote relationships, they should not be assumed to bethemselves alternate forms of social capital. In describing the applications of socialcapital, Schmid and Robinson (1995) found that relationships have an effect oneconomic transactions, production, loyalty, and willingness to assume risk. Thebenefits of social capital include reduction of transaction costs because it facilitatescooperation and coordination, which minimizes transactions costs, such as negotiationand enforcement, imperfect information and layers of unnecessary bureaucracy. Itpromotes greater coordination among individuals and between departments (seewww1.worldbank.org/prem/poverty/scapital/scources/firm1.htm).

Whether trust is synonymous with social capital or a facilitator of its developmentremains the subject of ongoing debate among those researching this topic. However,there is significant evidence to support the relationship between trust and productivity.Fukuyama (1995) has conducted extensive research on the role of trust withinorganizations and suggests that trust and common purpose are at the heart of buildingand sustaining organizations that function effectively. Additionally, Humphrey andSchmitz (1998) found that in Germany, Japan, and Italy, trust between economic agentsis a source of competitive advantage. Management theorist Charles Handy (1995)

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points to the role trust plays within successful firms. Conversely, low trust, industrialdisputes and poor workforce relations can be thought of as outputs of negative socialcapital. In his article “Taking social capital seriously”, Sturgess (2000) argues thatsocial capital needs to be researched further and its impact on organizationalperformance made explicit. Looking at social capital in this manner shows thatorganizations investing in human resources through HRD cannot ignore the importantrole of social capital. Well-trained and educated employees need an environment thatwill propel them to the top. Such an environment can only be achieved throughinvestment in social capital.

Emotional intelligenceEmotional intelligence – another important intangible asset – is defined by Saloveyand Mayer (1990) as the intellectual processes involved in the recognition, use,understanding, and management of one’s own and others’ emotional states and theability to use those feelings to motivate, plan, and achieve. Just as there are variousdefinitions and applications of HRD and social capital, scholars take variousapproaches to understanding emotions as they affect individual and organizationalperformance. Where psychology once considered human emotion as disruptive,disorganized, and characteristic of poor adjustment, new theories suggest thatemotions play an important role in organizing, motivating, and directing humanactivity (Salovey and Mayer, 1990). Wechsler (1958), who is generally attributed withdeveloping the Intelligence Quotient (IQ) test, included the capacity to act purposefully,to think rationally, and to deal with environmental demands in his definition of generalintelligence. Over the past 15 years, new technology has allowed breakthroughs inbrain research that has increased our understanding about the mutual interactionbetween feelings (affect) and cognition (thought). Defining the nature and significanceof this interplay between thought and emotion is at the heart of the emerging researchon emotional intelligence. HRD professionals continually grapple with the issuesassociated with organizing, motivating, enhancing, and evaluating human activity;emotional intelligence research can inform HRD practices within organizations.

Fineman (2000) noted:

. . . feelings shape and lubricate social transactions hence emotional intelligence as anorganizational development tool is widely accepted among managers, consultants, andpractitioners as a means for solving problems and enhancing social capital (p. 11).

Additionally, leadership in the twenty-first century requires new skills that includethose associated with emotional intelligence. Where past leaders were generallyrevered for having hard, strong personal qualities, Hawley (1996) suggests that futureleaders “will be those who can demonstrate a greater empathy and concern for peopleissues and those who do not rely on position or rank for their status” (pp. 217-31). Giventhe increase in global enterprises and the cultural issues associated with keepingorganizational transactions lubricated, emotional intelligence as an organizationalconcern is defendable.

Leadership, culture, and organization development are part of the organizationalgrowth, and issues associated with emotional intelligence cut across the entireenterprise. Goleman (2000) presents convincing evidence that the most effective leadershave a repertoire of skills that include those associated with emotional intelligence.

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Additionally, Goleman et al. (2002) illustrate the impact of emotions on organizationalclimate, culture and performance. To understand the influence of emotions at work isto recognize the power of emotional energy to mobilize conflict or determine a sense oforganizational belonging (Collins, 1990). Kets de Vries and Miller (1984) suggest thatorganizational success and failure can be determined by the emotional tone set by theexecutive or presumed leader of an enterprise. Therefore, emotional intelligence can beconceptualized as collateral for developing social capital within organizations. In thesection that follows, we make effort to integrate HRD, EI, SC and organizationalproductivity.

The integration modelFigure 2 illustrates the relationships among HRD, emotional intelligence, social capitaland productivity. In Figure 2, the inputs are those variables that facilitate thedevelopment of social capital. These inputs include HRD processes and functions suchas individual development, career development, and organizational development.Individual development focuses on the importance of employee training and the needto engage in lifelong learning (Nafukho, 2004). For instance, Martin et al. (1999), in alongitudinal case study of a well-known Scottish company, established that there was apositive relationship between lifelong learning programs and employee perception ofcareers, fairness, and certain key outcomes of psychological contracts. They furtherobserved that in both the USA and the UK, it has been established that organizationsare now focusing on the employee opportunities to improve marketability andemployability instead of career progression. Additional inputs that are critical to socialcapital development include the need to understand the emotional needs of people in

Figure 2.Integrating HRD, EQ, SC

and organizationalproductivity

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organizations; hence the need to research emotional intelligence. Thus, having a clearknowledge and understanding of the employees’ emotional intelligence should helpcreate an organizational environment that has a propensity to develop and sustainsocial capital. The double-headed arrows connecting the facilitating variables withsocial capital illustrate the open-loop relationship among them. Thus, the facilitatingvariables influence the development of social capital and are influenced by itsdevelopment. Social capital can be conceptualized as an intangible process that outputscompetitive advantage and productivity when it interacts with the other facilitatingvariables such as people’s emotional intelligence and their soft skills, knowledge andattitude gained through various HRD programs. Besides the internal organizationalenvironment, there is the external environment that may affect the organization, asshown in Figure 2.

Linking HRD, EI, and SC to organizational productivityOrganizations continue the search for innovative approaches to increase theircompetitive advantage in this ideas era which is defined by the utilization of people’stalent. According to Appleby and Mavin (2000):

The unique positioning of each individual organization provides that difference through itsculture and the human resources. It is human capability and commitment which distinguishsuccessful organizations from the rest (p. 555).

They further suggest that people, and the way they are managed and deployed, are thesingle most sustainable source of competitive advantage (Appleby and Mavin, 2000):

Other advantages, such as technology, global reach, or IT systems, can all be copied andexceeded by competitors. The current drive for differentiation is to generate ideas andinnovation through the organization’s human resources (Appleby and Mavin, 2000, p. 555).

Appleby and Mavin (2000) lastly highlighted the fact that “ideas are now the DNAof organizations and therefore learning and development of people become crucial toeconomic survival” (p. 555). Statements like these reinforce the importance of HRDto the strategic initiatives of the enterprise. It is widely held that we live in aknowledge age. However there is evidence that the ideas or innovation era hasemerged. In an ideas or innovation era, individuals and organizations with thecapacity to create and recreate themselves and their outputs are rewarded bydeveloping and sustaining a competitive advantage in the marketplace. HRD is thedelivery system of individual and organizational development on which theorganizations depend in this ideas era. Additionally, just as the human pulmonarysystem is impacted by the type of inhalants to which it is exposed, theorganizational climate is reactive to the emotions that are evident within theworkplace. Organizations are illustrative of open-loop systems, those systems thatdepend on external sources to sustain themselves (Goleman et al., 2002). At theindividual level, individuals rely on others for emotional stability whilesubsequently influencing the emotions of others. For example, displays of toxicemotions such as rage and unbridled coercion can contribute to negativity andimpede collaboration and innovation, whereas positive emotions promotecollaboration and feedback, essential elements for innovation and productivity atthe workplace. Therefore, to maximize the potential of social capital as an importantfactor in organizational performance; the internal environment must be emotionally

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conducive to its development. Social capital posits that social relationships arerelations with productive capacity and can be utilized to create something of value(Coleman, 1990), and are developed by and as a result of meaningful socialrelationships that individuals invest in creating together over time (Storberg, 2002).Developing emotional intelligence within the organization creates an environmentthat enables the opportunity for social capital to develop, thus enhancingorganizational performance.

Implications and conclusionThis paper aims to provoke a debate on the link among human resourcedevelopment, emotional intelligence and social capital theory and how these variablesdetermine organizational performance. While there appears to be a clear relationshipamong HRD, social capital, emotional intelligence, and organizational productivity, itis difficult to create measurement instruments that can show the contributions ofeach to organizational productivity. This challenges scholars and practitioners todevelop innovative instruments to measure the relationship among HRD, EI and SCand their subsequent impact on organization performance. While it seems obviousthat organizations would seek to employ and develop workers with high emotionalintelligence, advanced cognitive skills and knowledge developed through HRD, andabilities that contribute to developing the social capital of the enterprise, limitedresearch known to the authors has attempted to establish how the three variablescould be combined to optimize employee talent and desired organizational outcomes.In reviewing the literature for this article, we saw the urgent need to research the linkamong investments in HRD, emotional intelligence, social capital and productivity.Not only do controversies exist regarding the definitions and perspectives associatedwith HRD, social capital, emotional intelligence and productivity, there is somequestion whether they are even distinct constructs. We suggest that that HRDscholars and practitioners endeavor to develop instruments that can measure andshow the contribution of HRD, emotional intelligence and social capital toorganizations. While HRD scholars have paid great attention to the critical role ofHRD in organizations, limited work has been done to show the combined value andcontribution of emotional intelligence and social capital to the organizations. Whilemost organizations must concern themselves with profit maximization, it isinconsistent with systems theory to separate a critical indicator from its context.Therefore, the sole measure of an enterprise’s success should include measures thatimpact revenue generation. In addition to past or lagging indicators such as profits,attention should be given to advancing or evolving indicators associated with theenterprise. Unlike a lagging indicator, which is “old news” when analyzed and cannotbe changed, dynamic advancing indicators such as social capital, emotionalintelligence and HRD processes can be analyzed in “real time” and altered. Theintangibles inherent to the systems model may alert the enterprise to environmentalfactors that, when strategically monitored and adjusted, could influence productivityand revenue generation. This therefore calls for research that examines the emotionalneeds, social and psychological needs as well as economic needs of the organizationas a business entity and how the three variables combined influence organizationalproductivity.

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About the authorsKit Brooks teaches Adult Education/Human Resource Development (HRD) at the University ofArkansas, Fayetteville. Her experiences as an external consultant have influenced her teachingphilosophy and guide her research agenda, which focuses on bridging the gap between theoryand practice in HRD and leadership development. In addition to faculty responsibilities, shefacilitates professional development services for clients of the Sam M. Walton College ofBusiness Center for Management and Executive Development. Dr Brooks is currently workingwith a team of professionals to provide leadership development to an international non-profitorganization at their various locations across the globe.

Fredrick Muyia Nafukho holds a PhD in HRD from Louisiana State University, where he wasa Fulbright Fellow, and an MEd (Economics of Education), and BEd in Business Education andEconomics from Kenyatta University. He is an Associate Professor of Adult Education and HRD,University of Arkansas. Prior to joining UA, he was a Senior Lecturer and Head of theDepartment of Educational Administration, Planning & Curriculum Development at MoiUniversity. He has authored/co-authored over 60 articles, book chapters, and two books,Foundations of Adult Education in Africa (Pearson/UNESCO, 2005) and Training of Trainer:Strategies for the 21st Century (Moi University Press, 2002). Fredrick Muyia Nafukho is thecorresponding author and can be contacted at: [email protected]

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