This chapter focuses on: CENTRAL ROLE OF KNOWLEDGE as the primary means of wealth in today’s economy. The key resource, HUMAN CAPITAL, the foundation of intellectual capital. SOCIAL CAPITAL – Networks of relationship among a firm’s members. The role of TECHNOLOGY in leveraging human capital
CENTRAL ROLE OF KNOWLEDGE Employee loyalty and commitment Experience and skills of employees Customer relationships Company Values Reputation Brand names
How does the company create value in the knowledge-intensive economy?Consider the ff:
General knowledge and experience Social skills Values Beliefs Attitudes Current employees may be best source of new ones Incentives for referrals
-It is not enough to hire top-level talent and expect that the skills and capabilities remain throughout the duration of their employment. Training and development must take place at all levels • Active involvement of all leaders at all levels Monitor process and track development • Whatever training a firm uses, they must tract individuals for progress and transfer/share the knowledge to their co-employees
- Finding ways to keep employees away from transferring to another companyIdentify with organization’s mission and values• People who are committed to the core mission and values are less likely to stray or transferStrong alliance to organizationChallenging work and stimulating environmentFinancial and Nonfinancial Rewards and Incentives
Vital Role of Social Capital • Attraction, Development and retention of talent is a necessary but not sufficient condition for creating competitive advantage • Knowledge workers are more often loyal to their colleagues and profession than to their employer • Social capital (i.e., friendships, working relationships) may help tie knowledge worker to a firm. Networks ofrelationship among a firm’s members.
Terms: Pied Piper Effect Teams or networks of people are leaving one company for another. This process is referred to as “Hiring via Personal (Social Networks)” • Some job candidates may bring other talents with them • Can provide mechanism for obtaining resources and information from outside the organizationPotential Downside of Social Capital Groupthink • Companies have been damaged when people identify strongly with a group, they sometimes support ideas that are wrong Cost of financial resources