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IBIMA Publishing Journal of Organizational http://www.ibimapublishing.com/journals/JOKM/jokm.html Vol. 2010 (2010), Article ID 322246, 13 pages DOI: 10.5171/2010.322246

Integrating and Human for Sustainable Performance

Norhaiza Binti Ishak, Uchenna C. Eze, and Lew Sook Ling

Multimedia University, Malaysia ______

Abstract

Strategic knowledge is increasingly becoming an engine for change and creativity in many industries and : enabling effective operational and strategic initiatives. Existing literature in knowledge management (KM), however, has focused mainly on generic outputs obtainable from KM . This paper examines the strategic relevance of KM in enhancing human management in firms. To achieve this objective we present a detailed literature review on the implications of KM on effective human resource development, and the consequences for an ’s ability to sustain competitive position in the marketplace. We propose that firms that develop and apply strong KM culture would be able to achieve consistent high performance. In addition, when a firm is able perform better than competitors; such a firm would be able to achieve sustainable advantage. This paper could serve as a frame of reference for researchers, and could enable practitioners to gain better understanding of key requirements for maintaining competitive performance in this 21 st century via effective integration of KM and initiatives.

Keywords: Human Resource Management, Knowledge, Knowledge Management, Sustainable Performance, Malaysia ______

Introduction 1. An evolution from rational For many countries, the degree of (engineered, fragmented, bureaucratic) knowledge application is becoming a key to natural (organic, psychosocial, measure of human capital and industry. humanistic) to open systems frames of Today’s technologically advanced meaning in the management and economies are setting great examples of organizational literature (Charles and typical knowledge-based economies Jean-Marie, 1999). This caused a (World Development Report, 1999) transformation from the Old Economy to the New Economy, from an Work in developed economies has emphasis on the main forms of migrated from agricultural to production being capital, land and manufacturing and more recently to labor to an emphasis on /knowledge based. The migration knowledge and technology. The New comes with two notable developments, Economy is moving beyond bulk- both of which carry significant implications material manufacturing to designing for human capital management (HCM) new technologies, beyond processing (Charles and Jean-Marie, 1999). The two physical resources to processing notable developments are: knowledge, beyond applying raw

Copyright © 2010 Norhaiza Binti Ishak, Uchenna C. Eze, and Lew Sook Ling. This is an open access article distributed under the Creative Commons Attribution License unported 3.0, which permits unrestricted use, distribution, and reproduction in any medium, provided that original work is properly cited. Contact author: Norhaiza Binti Ishak e-mail: [email protected] Journal of Organizational Knowledge Management 2

energy to applying ideas (Lang, 2001). and ‘doing’ at all levels of their operations. Because of this, it is commonly In doing so, they eliminate many layers of observed that organization designs and , which are managerial practices are becoming dysfunctional in terms of information flow. more differentiated, less bureaucratic, Flexible organizations also avoid excessive less reliant on hierarchical authority specialization and compartmentalization structures and more psychosocially by defining multi-task job responsibilities integrative (Charles and Jean-Marie, (which calls for multi-skilled workers) and 1999) by using teamwork and job rotation.

2. The development involves the post- In view of the above trends in the new industrial revolution, which, spurred economy, there is a need for firms in especially by the information Malaysia to break through and shift to the revolution, has installed knowledge as recognizing a primary factor of production. In the knowledge as a core competence based on early 1990s, the classical factors of skills and experience. In the next sections, production – land, labor and capital – therefore, we highlight the key are becoming secondary to knowledge developments associated with knowledge as the primary resource for the New economy, introduced the term knowledge Economy (Charles and Jean-Marie, worker, define knowledge and knowledge 1999). management (KM), link KM and HCM, and identify the performance relevance of KM In view of the above developments, it is and HCM integration. now accepted that the productive economic core is being relocated from land, labor, capital and machinery to intellectual The Knowledge Economy resources, which emphasize information, knowledge and technology. The increasing The Knowledge-Economy Plan in Malaysia knowledge-based nature of competition is was advocated by the former Prime driving changes in how value chains are Minister, Datuk Seri Dr Mahathir managed across companies. It also signals a Mohammad in March 2000, with the aim of demographic shift in the workforce to transforming Malaysia into a knowledge- knowledge work, whose mobile exponents based economy by strengthening human demand a different type of work resources development and shifting the environment and executive . industrial structure to high value added production through fostering the IT The evolution in technology has enhanced industry. The goal is to transform Malaysia the borderlessness of the global market into an advanced K-economy by the year place and global knowledge work. Global e- 2020. To achieve this, the early stage of commerce and e- as well as transformation began in 2001 and unprecedented e-money flows develop continues through 2003 (and beyond) with speedily. The in national and corporate plans and budgets the knowledge economy is more flexible earmarked for this purpose. The mid stage and leaner as the business direction is now of transformation is targeted to be in 2010, focusing more on the upstream activities, when Malaysia will be fully compliant with which demand knowledge workers who the “new WTO” (K-economy , 1999, are skilled in the application of knowledge page 6). However, it is hoped that the and the use of information and evolution will happen more quickly communication technology (ICT). In other because the best practices will serve as words, it requires more strategists rather examples, which help Malaysia avoid than doers. reinventing the wheel.

Flexible and lean organizations reduce A Steering Committee has also been waste and increase the productivity of both established to guide and supervise the labor and capital by integrating ‘thinking’ development of the National K-economy 3 Journal of Organizational Knowledge Management

Master Plan. The Committee is chaired by production, such as those based on the the Secretary General of the Treasury, with information technologies, the greater representatives from the Economic the demand or highly skilled workers. Planning Unit, Ministry of International and Industry, Bank Negara Malaysia, Other studies show that workers who use the Malaysian Industrial Development advanced technologies, or are employed in Authority, the Inland Revenue Board, ISIS, firms that have advanced technologies, are the Malaysian Institute of Economic paid higher. This labor market preference Research, the Multimedia Development for workers with general competencies in Corporation and MIMOS as members. A handling codified knowledge is having Task force has also been established to negative effects on the demand for less identify high quality projects, including K- skilled workers (OECD, 1996). In the economy projects that qualify for special knowledge-based economy, individuals tax and non-tax incentives. employed in knowledge work perform symbolic analytic services, namely In view of the above development, the problem-identifying and problem-solving knowledge economy has become the services by consultants, brokers, nation’s main agenda and focus in the 21st professors, etc. The value of symbolic- century. The challenge for Malaysia will analytic services is not a direct function of now be to define a niche area to form a new how much time is spent on the job but competitiveness paradigm. This will mean rather creativity. This work is called real that Malaysia needs to work very hard to work, the work of thinking about and be on par with other countries. The time is acting on ideas relating to products, right for such a shift by injecting a catalyst markets and customers (Lang, 2001). such as knowledge and advances in technology into all sectors of the economy. The The world has changed: Exploiting the K-economy within the globalized Generation X has joined the workforce of trade environment has become the the new economy. Unlike the baby boomers current focus of attention for many who preceded them, generation Xers countries, which aspire to remain cannot and do not seek lifelong competitive. The trend in the employment but they do crave life-long economic growth is now favouring learning (Maureen and Elaine, 2002). This industries with high knowledge group of generation seek employability content because of the transition from over employment: they value career self- a production economy to knowledge reliance. Generation X has joined a economy. Thus, Malaysia must also workforce dominated by 77 million baby respond similarly to the challenges boomers, many of whom, because of poor and opportunities offered by the financial planning or personal satisfaction emerging K-economy. derived from work, do not willingly make room for Xers on the corporate hierarchical Change in employment: Employment ladder (Maureen and Elaine, 2002). As a in the knowledge economy is result the generation Xers perceive that, characterized by increasing demand even if they excel, they cannot move up so for more highly skilled workers who they move on. Due to this reason, Xers are are also enjoying wage premiums seen as preparing themselves for careers (OECD, 1996). Changes in technology, not for tenure in a specific organization and particularly the advent of since they cannot hope for career-long information technologies, are making support from the organization. They are educated and skilled labor more also increasingly self-reliant with high valuable and unskilled labor less so. human capital, technical skills, education, Studies in some countries show that learning and experience. the more rapid the introduction of knowledge-intensive means of Journal of Organizational Knowledge Management 4

With increasing competition in and clients, vendors and partners) professional work and a generation of baby (Fawzy and Soliman, 2000). boomers about to retire, many organizations are concerned about losing More recently, Audrey and Smith (2001) expertise. The statistics are alarming. In the define knowledge as understanding, US, more than 25 percent of the working awareness, familiarity acquired through population will reach retirement age by study, investigation, observation, or 2010, resulting in a potential worker experience over the course of time. It is an shortage amounting to nearly 10 million individual’s interpretation of information people (Winkelen and McDermont, 2008). based on personal experiences, skills, and Definition of knowledge competencies.

In the new economy of the new To the organization, knowledge is defined millennium, knowledge has emerged as an as what people know about customers, asset to be valued, developed and managed. products, processes, mistakes and success It is a critical factor affecting an (Audrey and Smith, 2001). They further organization’s ability to remain add that such knowledge resides in competitive in the new global marketplace. or through sharing of Indeed, some argue it has supplanted the experiences and best practices, or through traditional factors of production – land, other sources both internal and external to labor and capital – to become the pre- the organization. There are many eminent corporate and competitive arguments in the literature stressing that resource (Maureen and Elaine, 2002). This knowledge is the subject for companies to is because knowledge does not wear out focus on because of the increasing and people can duplicate it practically competitive market place. For instance, in without cost. It is a source of value and classical economies, the sources of wealth productivity, where knowledge can add are land, labor and capital (Civi, 2000). value to an otherwise closed, zero-sum However, in this 21st century, other of value and it can increase value engines of wealth are at work. It takes without diminishing it somewhere else. many forms: technology, , science, expertise, creativity and Knowledge is defined as the ability to information. In a word, it is knowledge. sustain the coordinated deployment of Thus, knowledge is certainly the best assets and capabilities in a way that helps resource and the only sustainable the firm achieve its goals (Fawzy and competitive advantage. In a growing Soliman, 2000). These assets, or number of countries, with expanding firms "Knowledge Treasures", need a knowledge contributing, this knowledge is migratory map which describes how to find, what to in some forms, embedded, and slow to be find and where to find useful knowledge retrieved in other forms (Civi, 2000). within the organization. Acquisition and Building on this, Nonaka (1995) pointed enhancement of these assets have become out that successful companies are those crucial management concerns (Al-Atahari that consistently create new knowledge, and Zairi, 2001). disseminate it widely throughout the firm and quickly embody it in new technologies Knowledge or "”, could and products: explicit and tacit be in three forms, namely: (McCampbell, Clare and Glitters, 1999).

1. Human capital (evidenced in staff’s knowledge, skills and talents); Explicit : Explicit (objective) knowledge is 2. Structural capital (comprised of clearly formulated or defined easily systems for codifying, storing, expressed without ambiguity or vagueness, transmitting and sharing knowledge); and codified and stored in . Since and it is easily shared and communicated, most 3. Customer capital (resulting from organizations have captured this connections between organizations knowledge in ordered repositories, 5 Journal of Organizational Knowledge Management

systems or operating technologies of the motivated creativity, which refers to the firm, thus making it available to all will, , and adaptability for members of the organization. Three types success exhibited by employees working of explicit knowledge reside in a firm: within certain corporate cultures. They cognitive knowledge, advance systems further elaborate that it is difficult to skills and system understanding (Meso and identify the precise cause of care-why. Smith, 2000) However, literature on KM acknowledges that high levels of care-why significantly 1. Cognitive knowledge , also enhance overall performance of the firm termed “ know what ”, is the (Meso and Smith, 2000). “basic mastery of a discipline that professionals achieve through Nonaka and Takeuchi (1995) have also extensive training and established a dynamic model of knowledge certification” creation. In this model, they explain a 2. Advance skills or “know how” critical assumption that human knowledge refer to the “ability to apply rules is created and expanded through social of a discipline to complex real- interaction between and world problems.” explicit knowledge (Civi, 2000). This 3. System understanding , also interaction is known as "knowledge termed “know why” is the deep conversion" and their belief is that explicit understanding of the web of and tacit knowledge are not totally cause and effect relationships different. They interact with and underlying a discipline. interchange into each other in the creative activities of human beings. Nevertheless, Tacit : Tacit (subjective) knowledge on the Fawzy and Keri (2000) argue that joining other hand is the unarticulated knowledge tacit with explicit knowledge could be a that is in a person’s head, which is often very complex task and in some difficult to describe and transfer circumstances may not be possible. In (McCampbell et al., 1999). It includes other words, they state that reconciling lessons learned, expertise, judgments, rules what is in employees’ minds with what is of thumb and intuition (Audrey and Smith, stored in databases requires extensive 2001). It resides within the individual and research and, in spite of major advances in is difficult to express in words. knowledge-based technologies, this task is still in its infancy. There is a great wealth of tacit knowledge inside people’s heads and embedded in the way we do things. Every employee has a Knowledge Management Defined wealth of tacit knowledge deeply rooted in his/her actions and his/her commitment to The scope of knowledge management is a particular craft or profession, a particular wide and the existing literature gives an technology, a product market or the endless number of definitions for activities of a work group or team (Meso knowledge management. The definitions and Smith, 2000). and activities involved depend largely on which they are intended for, and every firm It is vital for business success that tacit has different approach to their knowledge knowledge is shared so that, when people management practices. In the literature, leave, their knowledge does not disappear knowledge management is concerned with with them (Bagshaw, 2000). Bagshaw capturing a firm’s stock of expertise (2000) states that rediscovering the through creation, collection, storage and knowledge of an employee who has gone application (Bollinger and Smith, 2001). It can be a very long and expensive process. means identifying and harnessing the Tacit knowledge can also be seen as that collective knowledge of the organization knowledge, which resides in the culture of gained through experience and the firm (Meso and Smith, 2000). An competencies. example by Meso and Smith (2000) is self- Journal of Organizational Knowledge Management 6

Organizations are interested in managing Human Resource Management and knowledge for several reasons. One reason Knowledge is that core competencies are based on the Management skills and experience of the people who do the work and may not exist in the physical As human resource management (HRM) form (Kridad and Goulding, 2006). provides broad strategies to influence the Therefore, it is important that firms find cultural assumptions and beliefs of ways to tap into this in employees, it should play a central role in order to preserve and expand their core the move towards a knowledge competencies (Bollinger and Smith, 2001). management culture (Silke and Alan, In view of this, knowledge management has 2000). become a critical subject of discussion in the business literature in the recent years. There is clearly a role for the HRM Both business and academic communities functions in helping firms to identify the believe that, by leveraging knowledge, a crucial knowledge base on which their firm can sustain its long-term competitive competitiveness depends, ensuring its advantage. appropriate development, and reviewing structures and process, both formal and Knowledge management ideally captures, informal, which help or hinder the transfers, and leverages what everyone in integration of knowledge base with the firm knows. Thus, there is a daunting decision making process (Winkelen and challenge as who is ‘everyone in the McDermont, 2008). However, according to organization’ and how does the firm her, this issue has not received sufficient manage its knowledge, human capital, thus attention in the context of HRM (Ryan, transforming it into intellectual capital? 1995). While the HRM function is justifiably concerned with such aspects of the firm’s social system as the development Definition of Human Resource of company culture and the management of Management (HRM) change, some important aspects of the relationship between social system and As defined by Noe et al., (2000), human technical knowledge base receive relatively resource management (HRM) refers to the little attention. Ironically, human capital , practices and systems that management as a discipline is naturally influence employees’ behavior, attitudes suited for both to performing KM functions and performance. They emphasize that and advocating KM activities. After all, HRM there are several important human is charged with capturing, analyzing and resource practices that need to be tracking variety of information about its considered to maximize their influence on company’s employees. By doing so, HRM company performance. Such practices can apply knowledge to find the right include: Human resource planning, assignments for employees as well as the Recruiting, Selection, Training and right employees for the assignments, with Development, Compensation, Performance the aim of ensuring that a company’s Management, and Employee Relations. human capital is put to its best use. Strategic HRM requires a balance of emphasis, which needs to integrate with Human resource employees are being the business strategy (Kaye, 1999). With called on more often to promote strategic HRM, employees are seen to be knowledge management inside their proactive, capable of development, and departments and across the organization. worthy of trust and . It David J. Dell, research director at The emphasizes communication, motivation, Conference Board Inc., a research network and leadership (Noe et al., 2000) and business membership firm in New York, says that the work of human resource departments overlaps completely with core knowledge management challenges and now it must rise to those challenges. The 7 Journal of Organizational Knowledge Management

emergence of knowledge management has employees to participate in professional also caused a rise in the demands of networks and communities of practice that knowledge workers who require a different extend beyond a firm’s boundaries. order of thinking. Knowledge creation is achieved by creating Knowledge involves thinking with a supportive environment, through information and it takes human system to requisite HRM, for individuals, groups and realize it. Thus, to leverage knowledge, teams in order to be challenged by the HRM needs to enhance both thinking and firm’s problems, to search for the information. The most natural way to do it problems' solutions and to innovate. It goes is to build knowledge communities that from the creation of positions and teams, to cross teams, disciplines, time, space, and the provision of information feedback business units (Clarke and Rollo, 2001). flows, to the design of stimulating Four key challenges are involved in remuneration and other systems of building such communities in business: encouragement. It includes also investment in the of human 1. Technical – The technical capital. challenge is to design human and information systems that not only concerns various forms make information available but of learning, the creation of a knowledge- also help community members to sharing climate, establishment of training think. units, which asses and analyze training 2. Social – The social challenge is to needs, provide and evaluate training, and develop communities to share lead towards learning firm. knowledge and still maintain enough diversity of thought to Finally, knowledge utilization is about the encourage thinking rather than deployment of by means sophisticated copying. of proper leadership, division of tasks and 3. Management – The management responsibilities, remuneration systems, challenge is to create an and performance appraisal. environment that values sharing knowledge. 4. Personal – The personal challenge Recruitment and Manpower Planning is to be open to the ideas of others, willing to share ideas, and A central concern of human capital to maintain a thirst for new management, especially in relation to knowledge (Clarke and Rollo, knowledge workers, is the recruitment and 2001). retention of valued employees. The importance of managing the employment HRM Practices in Managing Knowledge relationship such that it generates value added resources for the firm has an According to Svetlik and Starvrou-Costea obvious link to the recruitment and (2007), if HRM is about managing people retention of staff (Carter and Scarborough, effectively, and if people’s most valuable 2001). Furthermore, the shortage of resource is knowledge, then HRM and KM knowledge workers will get worse as the are closely interrelated. They added that if birth rate drops and members of Baby we compare the KM cycle with HRM Boom generation retire. Therefore, human processes, we would find the various resource practitioners have to shift their activities shared between KM and HRM as focus to deal with the issue of knowledge mentioned below: transfer and get back to the basics of attracting, retaining and placing the best Knowledge acquisition entails recruiting people. Since the aim of recruitment and outstanding people and about helping them selection in the knowledge economy is to learn and grow as individuals and as source high talent possessing a range of professionals. It is also about encouraging capabilities related to the strategic Journal of Organizational Knowledge Management 8

knowledge areas, the challenge for HRM Smith, 2001)]. These firms focus on practitioners is to select the employees providing employees with a full set of who are capable of contributing to the firm competencies and experiences, which in a variety of ways now and future, rather should be utilized. As for the development than simply filling the current vacancy of human capital, such development (Whicker and Andrew, 2004). opportunities would include opportunities Training and development for project, coaching and counselling of employees, mentoring and 60-degree Discussion of human capital accumulations feedback processes and occurs frequently in the recent literature as assessment/development centers (Garavan a key outcome of human capital et al. 2001). Based on the above literature, development (Garavan et al. 2001). There the nature of knowledge-based work is is also evidence that firms likewise view fundamentally different from that known investment in human capital to be previously and requires a different order of important. Increasingly firms seek, through thinking. the implementation of sophisticated human capital development and workplace Professional intellect within a firm learning, strategies to develop employee frequently becomes isolated (Smith and competencies to enable them to respond Rupp, 2002). It is a fact that the existence of quickly and flexibly to business needs a large creates (Garavan et al. 2001). They further state conflict with other groups, such as that professional competence is best marketing or manufacturing conflicting developed through the use of mentoring with research and development and job rotation processes. departments. Thus, at the heart of an effective professional organization, Changes in firm structure have created a managing and developing the professional situation where job insecurity is common intellect is critical for sustained with the consequence that individuals are competitive performance. Advice for now required to take ownership and successful “coaching” practices to ensure responsibility for career management the development and growth of the (Garavan et al. 2001). New careers, in this professional intellect include: Recruit the regards, requires individuals to focus on best; Force intensive early development; remaining employable across many firms constantly increase professional rather than just one (Garavan et al. 2001). challenges; and evaluate and weed (Smith Progression up the hierarchy is replaced by and Rupp, 2002). the accumulation of competencies. According to Garavan et al. (2001) the dominant theme is one where individuals Compensation & Benefit are required to exhibit competencies such as team working, the development of While traditional compensation and network relationships, and the acquisition reward systems pivot on the disbursement of knowledge and learning capability. of monies, those located in knowledge Therefore, firms are encouraged to provide environments do not. Non-monetary some help to employees simply because rewards become important factors and rely goals such as increased profit and heavily on symbols of personal and productivity are dependent on the professional excellence. Such arrangements innovation and creativity of the employees make it a point to recognize achievement, allow researchers to pursue their own Competency enhancement can also be projects and offer the praise, achieved through the employee actively acknowledgement and independence, seeking to move into other areas within the which have been found critical to firm (Garavan et al. 2001). Firms should innovation (Depress and Hiltrop, 1995). facilitate this movement as it allows a firm General Motors, for example, sponsors the to develop opportunities for networking Kettering Awards, which recognize within and outside the firm (Bollinger and outstanding scientific achievement. Phillips 9 Journal of Organizational Knowledge Management

Petroleum builds advertising campaigns around its innovative researchers, and knowledge workers at the Batelle The traditional performance management Memorial Institute receive 10% of the focuses on narrowly defined tasks or job royalties on their inventions. Most people roles and observable outputs rather than value their self-respect and the self- long-term and diffuse contributions. Thus, satisfaction derived from a job well done Whicker and Andrew (2004) suggest that more highly than they do material rewards in today’s economy, performance (Depress and Hiltrop, 1995). management must be re-conceptualized Studies focusing on scientific with knowledge work in mind. The process breakthroughs indicate that knowledge by which people obtain results become less workers, who undertake pioneering significant and the focus shifts to managing research typically dislikes bureaucracies, outcomes, many of which are long term and resent administration and work most difficult attributes to individual. Balanced creatively when satisfying their own scorecard is an increasingly popular curiosity (Depress and Hiltrop, 1995). In approach in identifying performance line with this, knowledge workers tend to measures from a holistic, long-term have high needs for autonomy, significant perspective (Garavan et al., 2001). Each drivers for achievement, stronger identity stage of the performance management, i.e. and affiliation with a profession than a system development, appraisal process and company and a greater sense of self- feedback, should ensure procedural direction, making them likely to resist the fairness, interpersonal fairness and authoritarian imposition of views, rules outcome fairness (Garavan et al., 2001). and structures (Depress and Hiltrop, 1995). Silke and Alan (2000) also claim as non- monetary rewards become important, as in Employee relations a knowledge-intensive environment, employees are potentially more motivated Studies focusing on scientific by intrinsic career considerations. breakthroughs indicate that knowledge Examples include professional recognition workers who undertake pioneering and working in a challenging area and research typically dislike bureaucracies, valuing their self-respect and their self- resent administration and work most satisfaction (Depress and Hiltrop, 1995). creatively when satisfying their own curiosity (Depress and Hiltrop, 1995). In Depress and Hiltrop (1995) suggest that, in line with this, they state knowledge the knowledge age, effective systems will workers tend to have high needs for embrace three major dimensions: autonomy, significant drives for achievement, stronger identity and 1. They will be externally affiliation with a profession than a competitive in order to attract company and a greater sense of self- and retain competent staff, and direction, making them likely to resist the sensitive to employees' authoritarian imposition of views, rules perceptions of internal equity. and structures. 2. They will be perceived as rational in their organizational context, Studies also show that needs for autonomy, administered in a consistent way achievement and personal growth are met over time, and contributors to the when job structures and leadership styles company's strategic direction. promote and self- 3. They will be constituted in a new management. Many R&D job designs order of thinking, which makes promote autonomy, and the desirable cultural, socio-political and work leadership style is one, which is more challenge issues primary, and pay, collegial than supervisory, shares bonus and incentive schemes information, delegate responsibility and secondary. encourages upward and horizontal communication. Despites the above Journal of Organizational Knowledge Management 10

arrangements, a work setting needs to be timing of facilitating support for created in which work contributions, knowledge management activities serving organizational needs, are also by the human resource valued by individuals as path towards department could assist the desired personal rewards and where success of the program. employees are able to use their full 6. Learning and mistake handling: If potential. staffs are encouraged to discuss Soliman and Spooner (2000) state that their mistakes openly, a culture of there are at least seven roles for human “openness and seeking help” capital management department in could lead to the creation of supporting knowledge management . The human cultures, which include: resource department could assist in creating a learning 1. Social gathering of staff: In some environment far from fear of firms, talking to colleagues may punishment and penalties. This be considered a no value-added could in turn facilitate the activity. The human resource knowledge management department could facilitate staff activities. meetings to support knowledge 7. involvement management activities. and support: The inclusion of 2. The office layout: The layout of senior management in the spaces for staff to meet informally knowledge management effort is important to encourage provides additional motivation exchange of ideas and share for staff to share knowledge and knowledge. The human resource increases the chance of success of department could liase with the knowledge management management to create office program. Human resource space for staff engaged department assistance in knowledge management motivating staff could lead to meetings. increasing support of knowledge 3. Trust between employees of the management activities. firm. In general, increased trust between employees improves According to Slagter (2007), HRM in the that chance of . knowledge economy must: The human resource department could play a role in building trust 1. provide expertise in among staff so that they can share understanding and defining knowledge. firm-level strategic knowledge 4. Differences in culture and capabilities; language: Clearly the more 2. develop and manage knowledge languages staff speak the better workers by leveraging the their ability to acquire knowledge knowing-learning-doing nexus; of customers and markets, 3. build knowledge value as an especially in global markets. The organizational as well as an human resource department individual asset; and through its role in recruitment 4. minimize the organization’s and staff development could knowledge risk associated with assist in selecting with loss of requisite capability and appropriate cultural and knowledge. linguistic backgrounds to support knowledge management Influence of Organizational Factors on activities. KM 5. Timeliness: The timing of knowledge management effort is Effective knowledge management is most important for its success. The likely in that find the right 11 Journal of Organizational Knowledge Management

balance between organization systems, such as developing new opportunities or which on the one hand are sufficiently open creating value for the customers. and flexible to allow creativity to flourish, but on the other possess enough formality Effective integration of HCM and KM would and discipline to ensure that creativity enable a firm to harness its capabilities in a produces tangible outcomes. They argue systematic and comprehensive fashion, that bureaucracy and formal which will aid in the effective allocation of communication inhibit spontaneity, firm resources. This would consequently, experimentation and the freedom of create avenues for cost reduction and expression necessary for innovative enable greater maximization of capabilities. responses to environmental change. They Consequently, the firm would have greater also acknowledge that a great deal of strength in taking up opportunities in the knowledge originates from marketplace. The ability of a firm to personal intuition, networking and chance harness its human capital and expertise in encounters, but contend structured and a way superior to competitors would create standardized procedures are needed to key competencies in the firm that could be capture, and connect the rare and inimitable, which could provide knowledge thus gained to business the firm a chance to gain and maintain high objectives. performance in the industry. According to The focus of KM should be placed on Lubit (2001), firms are able to use their individuals themselves, and the impact knowledge resources to not only create made by human resource management on effective HRM performance, but also build KM practices, and that KM is actually an sustainable competitive position in the evolved form of human resource (Svetlik market. He further explains that to create and Starvrou-Costea, 2007). In line with the competitive position, firms’ need to: 1) resource based-view, employees with all internally spread tacit knowledge, and 2) their capacities become desirable and real create KM capabilities and approaches in resources for the firm if they are to a high fostering innovation. degree: valuable and scare, inimitable, non- substitutable and appropriable (Boxall and Purcell, 2003). Conclusion

Knowledge is fast becoming a key success Sustaining Performance and KM- factor for many companies. The current enabled HCM employment trends indicate that a significant proportion of global workforce Numerous firms have recognized that is increasingly evolving as knowledge knowledge plays an essential role (Choi et workers and it is reasonable to propose al., 2008) and is a crucial resource in that their importance to a firm’s ability to gaining sustainable performance in any gain and maintain competitive advantage industry (Alton and Dion, 2008, will exceed that of other types of Anantatmula and Kanungo, 2007, Civi, employees by several orders of magnitude. 2000). Civi (2000) found that achieving HRM managers and their firms will need to competitive performance ranks high as the develop innovative ways of attracting, most important application of knowledge retaining and motivating such employees, in terms of its contribution in attaining an and compensation systems will play a effective human capital management and critical role in coping with these new the overall firm objectives. For many firms, realities. HRM managers will need to shift gaining sustainable advantage lies in the their focus from old organizing models to capability to create and apply intellectual new ones, together with a change in expertise (Choi et al., 2008). Firms should, compensation systems that are more therefore view knowledge as a valuable flexible, process-oriented and team-based. asset for building a strong human capital These new compensation systems will be department in a firm. According to Lloria based on different forms of leadership, (2008), the strategic objectives of KM vary, authority and structure from those that Journal of Organizational Knowledge Management 12

now prevail, and will be critically important in determining the environment Bogdanowicz ,M.S. & Bailey E.K. (2002), of a successful knowledge-intensive firm. “The value of knowledge and the values of Whether or not a corporation speaks of the new knowledge worker: generation X knowledge management, human capital in the new economy,” Journal of European practitioners will have to learn to redirect Industrial Training, (26:2/3/4), pp. 125- themselves and their corporate culture 129. toward sharing, collaboration and cross- functional teams. They also have to apply Bollinger, A.S & Smith, R.D. (2001), those standards to finding and retaining “Managing organizational knowledge as a the best talent in the market, along with strategic asset,” Journal of Knowledge capturing as much as possible employees’ Management, (5:1), pp. 8-18. knowledge before they leave the firm. A healthy interaction between knowledge Boxall, P. & Purcell, J. (2003), “Strategy and management efforts and the existing Human resource management,” England, organizational culture will undoubtedly Palgrave McMillan, result in changes to that culture, which may indeed lead to the competitive and Carter, C., & Scarbrough H. (2008), successful application of knowledge “Towards a second generation of KM? The management initiatives. people management challenge ,” Education and Training , (43:4/5), pp. 215-224.

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