This document discusses the importance of knowledge and human capital in today's economy. It argues that intellectual capital, including human capital, social capital, and knowledge, is a key source of competitive advantage for organizations. It also emphasizes that attracting, developing, retaining, and leveraging human capital through knowledge sharing and social networks is vital for business success. Finally, it addresses the need to protect organizations' intellectual assets through various means like patents, contracts, and trade secrets.

2. The Central Role of Knowledge
in Today’s Economy
• Tangible resources such as
land, equipment, and money
• Intangibles such as brands, image, and
customer loyalty
• Knowledge economy an economy where wealth
is created through the effective management of
knowledge workers instead of by the efficient
control of physical and financial assets

3. Intangibles
Intellectual capital = Market value of firm − Book value
of the firm
• Human capital
• Social capital
• Explicit knowledge
• Tacit knowledge

4. Human Capital: The Foundation
of Intellectual Capital
Attracting
Human Capital
Developing
Human Capital
Retaining
Human Capital

5. Attracting Human Capital
• “Hire for Attitude, Train for Skill”
• Organizations are increasingly emphasizing
general knowledge and experience, social
skills, values, beliefs, and attitudes of
employees.

6. Developing Human Capital
• Encouraging Widespread Involvement
• Transferring Knowledge
• Monitoring Progress and Tracking
Development
• Evaluating Human Capital

7. Retaining Human Capital
• Identifying with an Organization’s Mission
and Values
• Challenging Work and a Stimulating
Environment
• Financial and Nonfinancial Rewards and
• Incentives

8. Enhancing Human Capital: The
Role of Diversity in the Workforce
• Cost Argument
• Resource Acquisition Argument.
• Marketing Argument.
• Creativity Argument.
• Problem-Solving Argument.
• Organizational Flexibility Argument.

9. The Vital Role of Social Capital
• The key role of social capital in leveraging
human capital within and across the firm
• Social capital is the friendships and working
relationships among talented individuals
• Competitive advantage
• Employees working in teams, sharing
knowledge, and learning from each other adds
value to the firm and they are less likely to leave

10. Social Networks: Implications for Knowledge
Management and Career Success
• The importance of social networks in knowledge
management and in promoting career success
• Managers need to shift from a top-down
bureaucratic control, to a more open, decentralized
model
• Coordination, cultivation, and collaboration are
increasingly becoming the new mode of work at
every level

11. Social Networks Cont.
• This shift can be done through social network
analysis
• Analysis of the pattern of social interactions among
individuals
• This analysis is helpful because social ties within and
outside the group affects how members:
• Convey needed resources, exchange information and
support, have motivation to treat each other in a positive
way, and develop trusting relationships that improve the
groups’ effectiveness

12. Using Technology to Leverage
Human Capital and Knowledge
• Using networks to share information
• Can be good, or bad, it’s important to regulate
how it’s being used
• Codifying knowledge for competitive advantage
• Codified knowledge: knowledge that can be
documented, widely distributed and easily
replicated
• Can take advantage of this knowledge and be
reused many times at very low costs

13. Using Technology to Leverage
Human Capital and Knowledge
• Electronic terms: Using technology to enhance
collaboration
• Electronic teams: a team of individuals that
completes task primarily through email
communication
• Advantages: less restricted, effective in forming
“social capital”
• Challenges: process loss due to geographic
dispersion

14. Protecting the Intellectual
Assets of the Organization
• Intellectual Property Rights are more difficult to
define and protect than physical assets
• Patents
• Contracts
• Copyrights
• Trademarks
• Trade Secrets
• Protection incentivizes the development of new
products and services

15. Protecting the Intellectual
Assets of the Organization
• Dynamic Capabilities:
• Entail the capabilities to build and protect a
competitive advantage through entrepreneurial
processes.
• Knowledge, assets, competencies, complementary
assets and technologies, recognition of
opportunities, generation of
knowledge, reconfiguration of existing assets and
capabilities