Academic journal article Academy of Strategic Management Journal

Human Capital Development Dynamics: The Knowledge Based Approach

Academic journal article Academy of Strategic Management Journal

Human Capital Development Dynamics: The Knowledge Based Approach

Article excerpt

ABSTRACT

Discussions on how to reduce cost and improve on gains in organizations have increased. As a result, effective utilization of resources in the organization has been daunted as the key to creating a competitive advantage (Wernerfelt, 1984). Human capital is among key organizational resources that are hard to imitate therefore, maintaining and developing it is crucial for organizations to stay in the forefront. Organizations have used different approaches to develop human capital. As organizations become more dynamic, so does the approach to human capital development. Technological changes, especially in the virtual world have greatly influenced different human capital development approaches. Therefore, this paper proposes to look at current human capital development approaches and their integration into the knowledge based approach. The paper will further explore the importance of human capital development approaches in achieving a strategic competitive advantage. The first section of the paper will explore the current literature on human capital development approaches in firms and their strategic necessity in the knowledge sphere of the organization. In the second section, the paper will connect human capital development approaches to the five knowledge utilization characteristics described by Grant (1996) : 1)transferability- How do human capital development approaches affect the transfer of both tacit and explicit knowledge?; 2) capacity for aggregation- how do the right human capital development approach affect the best aggregation methods; 3) Appropriability- does the human capital development approach create a possibility for return on human capital development investment; 4) specialization in knowledge acquisitionHow do human capital development approach affect transfer of required knowledge; and 5) the knowledge requirements of production- does human capital development approach matter in the input and output of knowledge in human production? In the third section, the paper will seek to explore the strategic importance of human capital development approaches in expounding the nature of knowledge in a firm and how this ties to a firm existence. In conclusion, this paper will seek to look at ways in which human capital development approaches play a role in the future contribution of the knowledge based view.

INTRODUCTION

Human capital development has been described as a key economic driver (Benhabib & Spiegel, 1994; Schultz, 1961). How a society develops may result from the accumulation or absorptive power of knowledge available to them. The economic muscle emanating from human capital is depicted in the endogenous growth model where Romer (1990) articulates a positive relationship between large pulls of human capital and faster economic growth. Human learning occurs continuously and is influenced by their surroundings and contact with others. Therefore, learning becomes a critical factor at an organizational and individual level (Malerba, 1992). How you strategically operationalize learning in the real world may determine your success in the use of the knowledge acquired. Investing and rebuilding, customizing or adjusting skills has a positive effect on human capital development (lepak & Snell, 1999). Technology has boosted learning and consequently human capital development in general. Organization Human capital development approaches (HCDA's) aim to improve value, team work, consciousness among individual employees and overall collective performance. Today, technology plays a big part in human capital development as the demand for new skills and relational requirements in organizations increases. (Waldeck & Leffakis, 2007). The 1950's through 1970's saw the dominance of the production industrial economy. During this period a labor based human capital was very important to the organizational processes. However, today with change in organizational demographics, globalization, and technological changes; emergence of the knowledge based worker has taken prominence as the new model in organizations (Chinowsky & Carrillo, 2007; Merriam, Caffarella & Baumgartner, 2007). …

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