The Central Role of Knowledgein Today’s Economy• Tangible resources such asland, equipment, and money• Intangibles such as brands, image, andcustomer loyalty• Knowledge economy an economy where wealthis created through the effective management ofknowledge workers instead of by the efficientcontrol of physical and financial assets
IntangiblesIntellectual capital = Market value of firm − Book valueof the firm• Human capital• Social capital• Explicit knowledge• Tacit knowledge
Human Capital: The Foundationof Intellectual CapitalAttractingHuman CapitalDevelopingHuman CapitalRetainingHuman Capital
Attracting Human Capital• “Hire for Attitude, Train for Skill”• Organizations are increasingly emphasizinggeneral knowledge and experience, socialskills, values, beliefs, and attitudes ofemployees.
Developing Human Capital• Encouraging Widespread Involvement• Transferring Knowledge• Monitoring Progress and TrackingDevelopment• Evaluating Human Capital
Retaining Human Capital• Identifying with an Organization’s Missionand Values• Challenging Work and a StimulatingEnvironment• Financial and Nonfinancial Rewards and• Incentives
Enhancing Human Capital: TheRole of Diversity in the Workforce• Cost Argument• Resource Acquisition Argument.• Marketing Argument.• Creativity Argument.• Problem-Solving Argument.• Organizational Flexibility Argument.
The Vital Role of Social Capital• The key role of social capital in leveraginghuman capital within and across the firm• Social capital is the friendships and workingrelationships among talented individuals• Competitive advantage• Employees working in teams, sharingknowledge, and learning from each other addsvalue to the firm and they are less likely to leave
Social Networks: Implications for KnowledgeManagement and Career Success• The importance of social networks in knowledgemanagement and in promoting career success• Managers need to shift from a top-downbureaucratic control, to a more open, decentralizedmodel• Coordination, cultivation, and collaboration areincreasingly becoming the new mode of work atevery level
Social Networks Cont.• This shift can be done through social networkanalysis• Analysis of the pattern of social interactions amongindividuals• This analysis is helpful because social ties within andoutside the group affects how members:• Convey needed resources, exchange information andsupport, have motivation to treat each other in a positiveway, and develop trusting relationships that improve thegroups’ effectiveness
Using Technology to LeverageHuman Capital and Knowledge• Using networks to share information• Can be good, or bad, it’s important to regulatehow it’s being used• Codifying knowledge for competitive advantage• Codified knowledge: knowledge that can bedocumented, widely distributed and easilyreplicated• Can take advantage of this knowledge and bereused many times at very low costs
Using Technology to LeverageHuman Capital and Knowledge• Electronic terms: Using technology to enhancecollaboration• Electronic teams: a team of individuals thatcompletes task primarily through emailcommunication• Advantages: less restricted, effective in forming“social capital”• Challenges: process loss due to geographicdispersion
Protecting the IntellectualAssets of the Organization• Intellectual Property Rights are more difficult todefine and protect than physical assets• Patents• Contracts• Copyrights• Trademarks• Trade Secrets• Protection incentivizes the development of newproducts and services
Protecting the IntellectualAssets of the Organization• Dynamic Capabilities:• Entail the capabilities to build and protect acompetitive advantage through entrepreneurialprocesses.• Knowledge, assets, competencies, complementaryassets and technologies, recognition ofopportunities, generation ofknowledge, reconfiguration of existing assets andcapabilities