Intellectual capital is regarded as a resource of organizational knowledge and the collection of all the knowledge in organizations by prior studies (Youndt and Snell, 2004; Youndt et al., 2004). Subramaniam and Youndt (2005) suggested that human capital and social capital are two primary aspects of intellectual capital, and there is a significant synergistic effect between them (Mosey and Wright, 2007; Wolfson and Mathieu, 2020). Specifically, the diverse thoughts and ideas resulting from human capital enable firms to facilitate social capital, and the potential of social capital, in turn, can link these ideas to make unusual and unpredictable combinations, and thus intensify the benefits of human capital (Hollenbeck and Jamieson, 2015). In spite of this argument, there are two contradictory claims, namely, congruence and in-congruence, regarding human and social capital combinations.

At present, research on the human-social capital interaction in new ventures presents multiple perspectives, particularly the access perspective and the utilization perspective (Klyver and Schenkel, 2013; Semrau and Hopp, 2016). On one hand, the access perspective argues that human capital may be helpful for the formation of network relationships and access to social capital, and that human capital is the basis for the formation of network relations in social capital. Considerable empirical evidence supports this notion. For example, studies on entrepreneurs have found a significant role of human capital in explaining entrepreneurs’ network positions, and can mobilize more resources through networks as well (Bhagavatula et al., 2010; Stam, 2010; Methot et al., 2018). In contrast, the utilization perspective, on the other hand, stresses the compensatory or complementary relationships. These studies that examined the utilization of human and social capital show mixed findings. Scholars supporting the compensatory view hold that a simple sum of the two variables cannot guarantee a particular outcome (Johnson et al., 2010), such as positive and negative interaction effects (Brüderl and Preisendörfer, 1998; Klyver and Schenkel, 2013). Others, in light of the complementary view, suggest that, in addition to the joint positive interaction effect, they can also separately result in bringing about a particular outcome (Florin et al., 2003; Batjargal, 2007; Meier et al., 2016).

Based on the above-mentioned logical analysis, this study classifies the combination of human capital (HC) and social capital (SC) into four conditions (see Figure 1). To be specific, among the four pairing situations, ① indicates a high level of capital congruence, ② means a low level of capital congruence, while ③, and ④ mean capital in-congruence. The four pairing situations present different synergistic abilities between the two types of capitals.

Recently, research focus has been on emotion management (Amabile et al., 2005; Akgün et al., 2009; Ashkanasy and Humphrey, 2011; Belfanti, 2017). Barsade et al. (2003) summarized the enthusiasm for emotion research in the past 20 years as an emotional storm, and claimed that the majority of these studies were conducted at the individual level. An organization, as an aggregation of individuals, has different emotions which are heterogeneous across the workplace (Ashforth and Humphrey, 1995). Hence, much attention is worth being paid to emotional issues at the organizational level. Fineman (1993) extended the construct of emotion to the organizational level and put forward the idea of organizational emotion. After the redefinition and improvement of emotional expression in the workplace (Bolton, 2005), research on organizational emotional issues becomes popular in such fields as organizational behavior, and management science and economics (Ashkanasy and Humphrey, 2011). Huy (1999) first developed the concept of dynamic of encouragement, and defined it as a kind of emotional dynamic state and an organizational capability to instill hopes among its members facing radical change efforts.

We, in this study, propose that emotion issue is more likely to be associated with the capital congruence mentioned earlier. According to the resource-based view, the sustainability of competitive advantage hinges on a series of idiosyncratic resources that are difficult to be transferable or replicable (Grant, 1991). Emotional capability is embedded in the interaction of idiosyncratic social networks and knowledge (Huy, 1999). Specifically, when human capital and social capital are congruent, employees with abundant knowledge and social network resources are inclined to put more resources into the process of resource transformation, especially heterogeneous resources, such as emotional resources (Gouldner, 1960). Some scholars further emphasize that emotional dynamism is an internal capability to integrate and reconstruct organizational redundant resources (Huy, 1999; Akgün et al., 2007a,b, 2008, 2009, 2011). Among these redundant resources, human and social capital are the most distinctive and inimitable, and enable firms to rein and convert other organizational resources effectively (Foss and Ishikawa, 2007). However, when human capital and social capital are in-congruent, knowledge, skill, and social network are misaligned in the organizational context, as high ability and low network status, or low ability and high network status, lead to negative emotion among individuals, thereby making it difficult for organizations to instill hopes among all of its members (Huy, 1999; Johnson et al., 2010; Semrau and Hopp, 2016). Based on the theoretical reasoning mentioned above, we posit that the congruence between human and social capital will lead to higher levels of dynamic of encouragement.

According to the resource-based view, an organization is an aggregation of unique resources, and the essence of organizational development is the generation, integration, and reconstruction of those unique resources (Wright and Dunford, 2001). Semrau and Hopp (2016) stated that both human capital and social capital were exclusive organizational resources. More specifically, human capital is the core asset and dominant resource of an organization, which can affect new product development, process improvement, and service upgrading of an organization through dynamic capacity building, generation, interaction, and enabling of different organizational resources (Mohan and Mark, 2005; Engelman et al., 2017). Nahapiet and Ghoshal (1998) took social community as the essence of organizations, and pointed out that social capital, as a network of relationships for resource exchange, coordination, and integration, affected the knowledge value creation of organizations through structure and cognition. Yet, both scholars and practitioners are more and more inclined to believe that different combinations between human and social capitals in entrepreneurial enterprises have differential impacts on specific organizational results, for example, high levels of human and financial social capital could be conducive to entrepreneurial success (Semrau and Hopp, 2016).

Human and social capital have a highly cooperative and matching relationship (Schuller, 2001), while their consequences are diverse under different circumstances (Johnson et al., 2010; Meier et al., 2016). As some scholars suggest, social capital is a kind of relation network of applied knowledge resources, which is tacit and latent, while human capital is more controllable and transferable than social capital (Mosey and Wright, 2007; Stam, 2010). Thus, the synergistic effect of human and social capital is similar to that of explicit and implicit knowledge. Specifically, at the level of high human capital-high social capital, organizations win high energy in the capital resources balance, and explicit and tacit knowledge reflecting the inherent consistency in the process of internalization, combination, externalization, and socialization, thereby improving exploitative and exploration innovation of knowledge resource (Nonaka, 1994; Nonaka and Konno, 1998). Drawing on the resource-based view, it is easier for both organizations and employees with more knowledge resources to effectively augment and integrate resource inputs, accelerate the process of resource conversion, and thus transform these resources into innovative intellectual ones (Urgal et al., 2013). By contrast, at the level of low human capital-low social capital, although the knowledge resources in the capital are in balance, they are in a state of low energy and cannot meet the resource demands in the resource transformation process. Thus, it is difficult to form a fund of resources with potential competitive advantages and innovative enabling ability (Garud and Nayyar, 1994). Based on existing literature, compared with the low level of consistent capital situation, the high level of consistent capital can serve as a buffer and can stimulate synergism between organizational explicit and implicit knowledge, which may consequently drive the enabling process of knowledge resources in the creation and innovation activities. Numerous studies have shown social capital is the connection that combines and disseminates different knowledge or thoughts (Tushman and Anderson, 1986; Snell and Dean, 1992; Zahra and George, 2002; Hill and Rothaermel, 2003). Hargadon and Sutton (1997) considered the combining process as brokering, and further proposed that the unconventional combining was vital for innovative resources access. Therefore, it is hypothesized that:

We propose that the dynamic of encouragement mediates the linkage between capital congruence and organizational innovation. As mentioned before, the dynamic of encouragement illustrates organizational emotional capability and emotional resources, so it will be more appropriate for us to argue its interactive effects rather than discussing its antecedents or consequences, respectively. On the basis of Sophie and Luc’s (2010) theoretical work, Akhavan and Hosseini (2016) further suggested that capital could affect R&D, which in turn influenced firms’ innovation through shaping organizational capability. To be specific, with dynamic of encouragement, individuals are inspired to bring novel thoughts to old problems, find new problems, and provide innovative solutions (Perel, 2005). On one hand, the hallmarks of capital are network, skill, experience, and so on, while these resources entail an important soft environment provided by emotional integration capabilities to exploit and convert (Huy, 1999; Akgün et al., 2008, 2009, 2011). Previous research has stated that it is critical for knowledgeable employees to break through the technology boundaries of an organization (Kessler et al., 2000) that enhance the emotional capability to deploy and integrate capital resources (Huy, 1999; Akgün et al., 2007b), and further advance the transformation and utilization of prevailing resources, into the innovative resource. On the other hand, Tushman and Anderson (1986) suggest employees with ample skills and social networks are more inclined to alter organizational routines and norms. While inspiring emotions, as a tool of social influence in organizational roles, provide a bridge between a social network and organizational radical change (e.g., routines or prevailing norms) (Hochschild, 1983; Rafaeli and Sutton, 1989; Huy, 1999, 2002; Huy et al., 2014), thereafter shortening the production cycle, updating the organizational process, and altering the management methods. Therefore, it is hypothesized that:

Environmental factors have been regarded as significant boundary conditions known to influence organizational behaviors (Amabile et al., 1996; Dastmalchian, 2010; Delmas and Toffel, 2010). According to the resource dependence theory, an organization is essentially an open system that depends on external resources (Liu et al., 2011; Ganter and Hecker, 2013), and environmental characteristics can influence the chain of “capital-emotion-innovation” (Akgün et al., 2008), particularly environmental dynamics (Jansen et al., 2006). Environmental dynamics means the degree of uncertainty and the pace of change in the environment (Liang and Picken, 2010), in particular toward product and customer demands, raw material supply, and technology (Jansen et al., 2006).

According to Liu et al.’s (2011) work, the process of the organization and management system resources transition is contingent on the organizational environment. Based on the resource-based view, human capital and social capital are concretely presented as knowledge and network resources, respectively. Dynamic of encouragement is regarded as the application of emotional resources, which is consistent with Barrick et al.’s (2015) argument that different forms of resources can be transformed with each other via organizational engagement and motivational antecedents. With different levels of external dynamics, environmental variations will optimize organizational outcomes and promote organizational resources (Garg et al., 2003). On one hand, high environmental dynamism leads to the obsolete of some products, processes, and administration and calls for new ones to replace (Sorensen and Stuart, 2000; Jansen et al., 2005). In this case, the surrounding resources (such as knowledge, skill, and social network) will be mobilized to explore new markets and technologies through integrating emotion among members to solid strategic certainty and skill exploration (Venkatraman, 1989; Teece et al., 1997; Meyer et al., 2009; Ganter and Hecker, 2013), to build gain spiral of organizational resources, and eventually to satisfy the demands of organizational innovative resources (Zahra, 1996). Extant research shows that the perception of hope and encouragement can prompt employees to make use of experience, skill, and social networks to constructively probe inconsistent ideas, diverge from the status quo, and motivate risk-taking behaviors (Ludema et al., 1997; Harries, 2003; Akgün et al., 2008). As Jurkiewicz and Giacalone (2004) proposed, when organizations instill hope and happiness among employees, they are more able to handle stress stemming from the work environment, and thus enhance organizational innovation.

On the other hand, in a low uncertainty environment, organizations could foster a climate of satisfaction with the status quo, and employees are more likely to save their resources. Therefore, organizational innovation may be hampered due to a loss spiral and innovative resource reduction induced by the lack of consistent values and emotional atmospheres in organizations (Miller and Friesen, 1983). Huy (1999) has argued that for firms facing an increasingly dynamic environment, emotional energy reflects an enormous unexploited resource and enables organizations to realize a strategic stretch. Therefore, it is hypothesized that:

Hence, we propose a mediated moderation research model to manifest the relationships among all the main variables, as shown in Figure 2.

To test our hypotheses, we gathered pairing data from R&D teams (employees and their directive leaders) of new ventures in China, including electronic technology, software development, new materials, electronic communications, and machinery manufacturing industries. According to Zahra and Garvis (2000), new ventures were chosen based on the following two standards: (1) the survey was conducted in firms with over 25 employees given that those firms often had formal R&D systems, and (2) we chose firms with ages between 1 and 5 years. To minimize common method deviation, we investigated both employees and their directive leaders. R&D employees were asked to evaluate the dynamic of encouragement, while their leaders reported environmental dynamism, human capital, social capital, and organizational innovation. Participation was voluntary in our survey.

One of the authors is responsible to contact the leaders of target enterprises to communicate about the survey, and we send out the questionnaires to them after their permission. Finally, we delivered 456 questionnaires and 159 were returned during the period from June to September 2020. Of the 159 samples, the distribution of industry was as follows: electronic communication (N = 75 firms), software development (N = 11 firms), pharmaceuticals (N = 7 firms), chemical food (N = 31 firms), machinery manufacturing (N = 34 firms), and others (N = 1 firm). The distribution of organizational age was 1–2 years (54.7%) and 3–5 years (45.3%), while for organizational size was as follows: 25–50 employees (39.6%), 50–200 employees (40.3%), 200–500 employees (5.7%), 500–1,000 employees (13.2%), and over 1,000 employees (1.3%).

To test the hypotheses, we used mature scales from prior studies to measure the constructs in our study. The survey was conducted on a five-point scale, with 1 = never and 5 = always.

We conducted the confirmatory factor analysis (CFA) on all variables to evaluate the validity (Table 1) using Lisrel8.7. The results of CFA suggest that factor loadings are all above 0.55, AVE above 0.5, and CR above 0.8, which are acceptable.

Table 2 presents the descriptive statistics and correlations among the variables. As expected, all independent variables were significantly associated with dynamic of encouragement (r = 516, p < 0.01; r = 471, p < 0.01) and organizational innovation (r = 484, p < 0.01; r = 402, p < 0.01). This finding provides initial support for the hypotheses test. In addition, all the correlations of the variables were inferior to their corresponding square roots of AVE.

Our findings make several theoretical contributions to the literature on organizational behavior and human resource management. First, recent research shows a debatable result regarding the interactive effectiveness of human and social capital, namely, compensatory relationship (Brüderl and Preisendörfer, 1998; Klyver and Schenkel, 2013) and complementary relationship (Coleman, 1988; Florin et al., 2003; Klyver and Schenkel, 2013). Based on the resource-based theory, our study suggests neither fundamentally complementary nor fully compensatory claims between human capital and social capital (Semrau and Hopp, 2016). The findings confirm the conclusion that both human capital and social capital are critical organizational resources, and that all kinds of resources are converted to each other in an efficient or effective manner, as proposed by Miller et al. (2015). Thus, our study, on one hand, reconciles previous contradicting theoretical claims (compensatory or complementary) and offers direct evidence for a significant relationship between human capital and social capital in dynamic environments on the other.

Second, the findings of our study illustrate the mediation role of dynamic of encouragement in the linkage between human and social capital and organizational innovation performance. Innovation has been considered as a primary contributor to the development and survival of new ventures (Vera et al., 2016). Our study suggests that when a firm can instill hope and enthusiasm among its members, it is more likely to make full use of the knowledge and social network resources: (1) To constantly renovate its manufacturing process, improve its business process, and thus alter its production approach; and (2) to duly launch novel products and services.

Third, our work contributes to capital development and organizational capability by exploring their relationship in a complex context. Our results indicate that in a highly dynamic environment, capital congruence can be more beneficial for dynamic of encouragement, thereafter improving organizational innovation. In addition, a low dynamic environment cannot significantly influence the relationship between capital congruence and the dynamic of encouragement. This finding is not surprising, as new ventures are typical organizations with a strong innovative inclination and resource demands. Yet, the unique characteristics that new ventures show in the creative and innovative activities, for example, path ambiguity, time limitations, and skill specificity, suggest that new ventures are more sensitive to the dynamic environment.

Our study also provides some managerial implications for new ventures to boost organizational capability and innovation performance. First, managers should realize the importance of employees’ emotions, and further utilize employees’ emotions in both the innovation process and structure of the organizational daily work. Specifically, managers ought to rein employees “emotions, arouse employees” enthusiasm, and inspire them to achieve their goals. For example, managers could create an atmosphere of open dialog and interactions for employees through after-work meetings, to reconcile employees’ emotional divergence. Second, start-ups should take advantage of their innovative capability to gain and maintain a competitive advantage. For new ventures, innovations are primarily rooted in social network construction and knowledge application. Thus, new ventures should pay more attention to resource involvement, particularly the significance of knowledge and social network resources, and realize the role of emotional dynamics in the conversion of different resources under different environmental conditions.

Some limitations in this study need to be addressed in future studies. First, since the data were collected through a multi-source survey, we adopted some statistical methods (Podsakoff and Organ, 1986) to examine common method variance. Yet, despite this, we cannot rule out the bias due to subjectivity. Future studies could use different assessors to measure the main variables and gather data through multiple time periods. Second, we merely focused on high-tech start-ups. As a result, it remains unclear whether our findings can be applied to other industries. Future studies could use samples from other industries to verify the conclusions of our study.