Abstract
Strategic knowledge is increasingly becoming an engine for change and creativity in many industries and organizations: enabling effective operational and strategic initiatives. Existing literature in knowledge management (KM), however, has focused mainly on generic outputs obtainable from KM systems. This paper examines the strategic relevance of KM in enhancing human capital 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 organization'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 21st century via effective integration of KM and human capital initiatives.
Highlights
For many countries, the degree of knowledge application is becoming a key measure of human capital and industry
The current employment trends indicate that a significant proportion of global workforce is increasingly evolving as knowledge workers and it is reasonable to propose that their importance to a firm’s ability to gain and maintain competitive advantage will exceed that of other types of employees by several orders of magnitude
human resource management (HRM) managers and their firms will need to develop innovative ways of attracting, retaining and motivating such employees, and compensation systems will play a critical role in coping with these new realities
Summary
The degree of knowledge application is becoming a key measure of human capital and industry. An evolution from rational (engineered, fragmented, bureaucratic) to natural (organic, psychosocial, humanistic) to open systems frames of meaning in the management and organizational literature (Charles and Jean-Marie, 1999) This caused a transformation from the Old Economy to the New Economy, from an emphasis on the main forms of production being capital, land and labor to an emphasis on information knowledge and technology. The organizational structure in the knowledge economy is more flexible and leaner as the business direction is focusing more on the upstream activities, which demand knowledge workers who are skilled in the application of knowledge and the use of information and communication technology (ICT). A Steering Committee has been established to guide and supervise the development of the National K-economy
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