Human Resource Management Knowledge Economy by frn19602


									Human Resource
Management in th
Knowledge Economy
                 "Knowledge is the most democratic source of power."
                                                     -Alvin Toffler

                "Idon't believe evolution is about survival of the fittest.
                       I believe it is about survival of the most useful."
                                                            -John Woods

W    hat is the knowledge economy? The knowledge economy en-
     compasses all jobs, companies, and industries in which the
knowledge and capabilities of people, rather than the capabilities of
machines or technologies, determines competitive advantage. Of
the 19.5 million jobs that are projected to be created in the United
States from 1998 to 2008, 19.1 million of them will be in the serv-
ice sector (Hecker, 2001). From retail sales to computers to biotech-
nology, these jobs will be more knowledge-intensive in their
demands on workers and organizations. Although the service sec-
tor is an obvious place to find more knowledge-intensive work, the

  ercialization of inform
what is collectively known as information te
1999).The rapid development of computers and microprocessors has
made it possible to collect and use vast amounts of information from
a variety of sources in a more integrative an interactive manner than

ever before. Networking and connectivity, coupled with the Internet,
have made it possible for informatio toL acquired and shared glob-
ally, so that pro*^ no longer d
work together collaboratively: Combined, these
cally altered business and everyday life.
   In this information-intensive egonomy, competitive advantage is
based primarily on the application of knowledge, and not all of the
data, intelligence, and wisdom with which a global company needs
            e can be found in one place (Doz, Santos, & Williamson,
              easingly, knowledge is dispersed around the world.
Furthermore, the cost of overcoming distance is falling rapidly for
commodities that are mobile, such as capital, goods, and informa-
tion. Consequently, these commodities are readily accessible to
firms that previously faced limitations because of their geographic
   Knowledge, rather than the concrete characteristics of goods or
services or the mechanics of production processes, is becoming the
defining characteristic of economic activities. The impact of knowl-
edge is pervasive in both the "old economy" as well as the "new
economy." Human know-how is a crucial component in virtually
everything we produce, and it determines how we produce valued
goods and services. As Don Tapscott (1996) asserts, more added
value is created by brain than brawn.

  Many agricultural and industrial jobs are becoming knowledge work.
  Already, almost- 60% of all American workers are knowledge
  workers and eight of ten new jobs are in information-intensive sectors
  of the economy. The factory of today is as different from the indus-

  with software.

   The knowledge economy is about adding ideas to products and
turning new i eas into new roducts. Tapscott
               Human Resource

  There are smart clothes with chips in the collar; smart vehicles brim-
  ming with microprocessors that do a hundred new things every year;
  smart maps that tell a ucker's location and automatically change tire
  pressure according to the weather and road conditions; smart radios
  that store the traffic report for you when you want it; smart houses that
  manage energy, protect you from intrusion, and run a bath for you be-
  fore you arrive; smart elevators that phone in when they're getting sick;
  and smart greeting cards that sing to you,

  Products like those described by Tapscott have six key attributes
that distinguish them from      acts that were avai
These attributes are the following (Botkin, 1999).

1. They learn. The more you use them, the smarter they get, The
   more you use them, the smarter you get, too. For example,
   some word processing programs create customized dictionaries
   and automatically correct spelling errors.
 . They improve with use.      ey are enhance ,rather than
  pleted, when used. They grow up instead of being used up.
  Internet banking, for example, can be customized over time to
  reflect a patron's transaction patterns.
 . They anticqate. hey know what you want; they recommen
  what you might want next. Grocery scanners use the customer's
  current basket of goods to automatically generate coupons on
  the back of receipts to stimulate future sales.

 . They remember. They record an              1 your past actions to
  velop a profile. Nearly every         net sales operation has so-
  phisticated customer                 ems to encourage related
6. They are customized. They are uniquely configured to your in-
  dividual specifications-in real time-at no additional cost.
  Injection devices for iabetics can adjust insulin dosages
  spond to current blood sugar levels and activity levels.

   The knowledge economy has even spawned a new type of global,
knowledge-based organization, labeled a "metanational" by Doz,
Santos, and Williamson (2001).In contrast to global organizations
that view the world as a single, fairly homogeneous market, or
multinationals that see each country as a distinct segment, these
metanational organizations view the world as a global Fanvas dot-
ted with pockets of technology, market intelligence, and capabili-
ties. Thus, metanationals are able to capitalize on the synergies of
global commonalities while adapting to specialized opportunities
generated by local capabilities. Metanationals see untapped poten-
tial in these pockets of specialist knowledge that are scattered
around the world. And, by sensing and mobilizing this dispersed
knowledge, metanationals are able to innovate more effectively
than their rivals. Rather than promoting a universal set of products
that are globally competitive, metanationals weave together a tap-
estry of many local specialized capabilities to create local cus-
tomization with global reach.
   The complexity of this type of organization requires extensive
knowledge management at all levels to achieve what Bartlett and
Ghoshal (1993) refer to as "distributed entrepreneurship." Bartlett
and Ghoshal argue that this explains why Asea Brown Boveri
 (ABB), an electrotechnical firm with worldwide operations, has
turned the conventional design of its HR activities inside out to
              Human Resource   anagement in the Knowledge Economy

                                          knowledge are becom-
               of competitiv dvantage distinguishing businesses
              nations. How s the knowledge economy change
the way business is conducted? We will address that issue next.

What's Different in the Knowledge Economy?

However, since there is no universal agreement on specific charac-
teristics that distinguish knowledge-based competition from other
economic forms, this is a challenging task. Furthermore, there is no
universal agreement on terminology. New concepts have necessi-
tated new jargon, and some of it is more descriptive and widely ac-

the knowledge econo
leading thinkers on this topic.
   First, the knowledge economy uses technology to create symbolic
goods (Burton-Jones, 1999). Electronic symbols represent informa-
                    to know about     sical goods to conduct busi-
                                      ese electronic symbols-ones
                                  nication, the elivery of gover
ment programs, the execution of health care, and business transac-
                              nagement in the Knowledge

                 Eleven Characteristics of h e Knowledge
Knowledge Economy
Characteristic    Definition

spbdic goods            Electronic symbols representing information about the physical goods that
Digiiization            we need to know to conduct the transactions (for example, details of a
                        banking transaction): human communication, delivery of government
                        programs, execution of health care, business transactions all become
                        based on ones and zeros.
Demassification         Reduced dependency on the need for phyilal concentration or massing
                        location) of labor, materials, and money.
Boundaryless            Knowledgetranscends firm, industry, and national boundaries; organizations
enterprise/             have time- and qmce-independence; work can be performed from a varieb
Globaiization           of locations.
Virtualizafion          Physicalthings can become virtual, such as corporations, teams, auction
                        sides, and so on.
Gmectedness/            Interconnertionswithin and between organizations and insfitutions; intercon-
unprecedented           nections between businesses and customers; no one organbation can have all
partnering/             the knowledge needed, so padneilng is essential.
Ditintemediation        Elimination of the intermediaries in economic activi      nything that stands
                        between producers and consumers.

Dynamic pricing
                        are constantly updated and shifted.
immediacy               Business is transacted in real time; enterprises continuously an
                        adjust to changing business conditions; produd life cycles beco
                        Human Resource

                  Eleven Characteristics of the Knowledge Economy (Continued)
Knowledge Economy
Clyracferistic    Definition

Customer communities ustomers talk with other customers on local and giobal scale (for example,
Sources: Topsc~n 996); Budon-Jones (1 999); Baird & Henderson (20011

ture associated with physical proxim
mon in the industria
  Third, the knowledge economy has no define boundaries
(Burton-Jones, 1999; Tapscott, 1996). Knowledge transcends
                   even national

locations. The proliferation of PalmPilotsTM,laptops, and other
connectivity technologies everywhere, from the airport to the
                               attests to the portability of work.
                                            anage workflows t

                       makes it possible to transform physical enti-
ties into virtual ones. A virtual corporation is one without walls
and dissolved to meet situational needs. This "unprecedented
p&tnering" is neceisitated by the fact that-no single organization
              of the knowledge it needs to compete skcessfully
       n, 1999). Consequently, firms must dbeiop new"di1Is h r
knowledge management activities that .capitalize on their ex-
panded reach. Businesses are more inter~oqnccted        with their cus-
tomers in ways not possible in the past.. Relationship marketing
and individually targeted advertising create a uniquely "personal"
impersonal relationship. It is now unusual, for example, to make
a catalog purchase without being asked for your email address, so
that the company can keep a customer posted on upcomin
specials and new products. This suggests that the talent poo
an organization is likely to include customers and employees o
the firms providing raw materials and the firm's own human
   Sixth, the middleman is (mostly) eliminated in business transac-
tions between an organization and its customers as well as between
an organization and its employees. Tapscott calls this facto
termediation." It is the elimination of anything that stands
producers and consumers. The erosion of travel agencies, full-
service gas stations, financial service intermediaries, and similar
transaction roles illustrates this trend. This phenomenon is also oc-
curring in HR as more org              ' o ~ s ,such as Dell C
Corporation, adopt electronic           elivery systems. These
systems allow employees and managers to get what they n
they need it (and without using an HR middleman). Activities that
merely transmit information or transfer objects from one location
    yielded such products as "smart telephones," which can be used for
    talking, reading email, surfing the Internet, and so on. These flui

    economy is a                                  of competition among eco-
    nomic sectors. Rivalry is not limited to product functionality but
    can focus, as well, on the basic nature of the solution being offered.
    Consider, for example, the contest currently taking place between
    personal computer an microprocessor allies (such as IBM an
    Compaq), who intend to maintain power on the desktop, and in-
     erface firms (suc                           icrosystems),
    move computing power to the network. Rede ed solutions mean
    that firms will nee                                     fficiently develo
    new capabilities.
       Eighth, the knowledge economy increasingly operates to provide
    tailored products and services that meet the unique needs of indi-
    vidual customers. Termed "personalization," "mass consumption "
    or c c p r ~ ~ ~ m p t i o n , " refer to cons    rs taking an active r
    in the production                                  dge, information, an
    ideas become part           the product specification process (Baird &
    Henderson, 2001; Botkin, 1999; Tapscott, 1996). As a case in
      oint, Dell Computer Corporation has pioneer mdss customiza-
                                           anufacturing i
    this, the lines between products an
                    s increasingly bundle services wit
    ucts (that is, information hotlines for everything from cookbooks to

6                     mgement in the Knowledge

make it easy, quick, and inexpensive to comparison shop in virtua
space. Moreover, the firms whose products and services. are bein
cornparedhave much less control over the processxthan ever before.
As a result, firms will need to develop new ways to influence con-
sumer behavior that rely on loose ties and building relationships
rather than on conventional advertising and special pricing policies.
   Tenth, in the knowledge economy, business is often transacted in
real time, that is, there are no delays .between steps in the process.
Successful companies continuously adjust to changing business
conditions, and they c do so immediately. Aircraft manufacturers
that have implemen         enterprise resource planning systems,
example, automatically initiate the production of components in
their supplier's factory when an order is placed for a plane.
Furthermore, product life cycles have become much shorter. Firms
such as Intel routinely invest in the manufacturing capabilities that
enable them to scale up production at the same time they are work-
ing on the technology bre             hs that will create the next gen-
eration microprocessor.                s it feels like businesses a
running the fast-forward                a videotape player. The spe
of action in the knowledge economy means that firms must
agile, resourceful, and adept at interpreting events and making
sense of the environment "on the fly."
   Finally, the knowledge economy has create customer corn
ties. Customers can talk with other customers on local and globa
 bases. They can talk and share information and do so in real time.
Reactions from other consumers are readily available to evaluate
 products and services as diverse as videos and movies, nationa
                   Human Resource Management in the Knowledge   cono om^   27

finished products to accommodate unpredictable fluctuations in de-
mand. Furthermore, Henry Ford's mass production technology,
which could produce lots of cars efficiently (as long as they were all
the same kind) has given way to mass customization technologies
that are so sophisticated that they can provide individually tailored
products and services with the same or better efficiency as stan-
dardized production processes. Globalization is more than a mean-
ingless buzz word; markets for products, services, and labor are
truly international. People can work at home, organizations can
   ist in virtual reality, and industries ca

fast, very fast.

How Do Organizations Compete in the
Knowledge Economy?
Winners in the knowledge econo                   ave to outdistance t
competitors on three

1. Competing on the sensing plane
 . Competing on t e mobilizing
 . Competing on t
28   H;clman Resoure Muwgement in the Knowledge Econowy

is called "competing on the sensing; plane," and is. much- like
prospecting: It reqbires such competencies as reconnaissance and
discovery, Competing on the sensing plane enables.organizationsto
create the gutare,,
   Once useable knowledge is discovered, it must be. mobilized to
create a product. or service. Doz, Sant~s, ?iIUiilliatqsm (2001)
suggest that firms create cc.magnets,". which- are oqpriizational
structures that att~act knowledge from differ& o6.the corpo-
ration (and,sometimes with the help of customers) to ~en%$i   loca-
tions, swhere&t~an integrated and applied. To ,achieve this, firms
must have core compe4eacies .(integrated knowledge sets within an
organization that distinguish it from its competitors and deliver
value to customers) to provide an effective basis for selection and
assimilation (Bohlander, Snell, & Sherman, 20Q1).
   Pioneering new products and ser?icbs requires innovation.
Creative capabilities are needed to quickly develop t& jjroducts,
processes, and services that customers want at a competitive price;
to find new kdutions to old problems; and to adapt familiar solu-
tions to changing circumstances (Huang, 1998). This level of com-
petition is called "competing on the mobilizing plane" and requires,
among others, entrepreneurship and mobilization competencies.
   Finally, in the knowledge economy, as in the- old economy,
knowledge must be operationalized to create and distribute the
products or services. This more traditional level of competition is
evermore fierce as organizations look for efficiencies throughout
their entire value chains. Linkages among suppliers, distributors,
customers, and other institutions are crucial for eliminating

competitiveness.,lust as an individual blessed with good DNA (for ex-
ample, intelligen~e and athleticism) has a potential advantage in life,
&at ad~antage  .must be realized through deveiopment, application,
    ~pgo~u;ni@~,   The same is true for organizatimal capabilities.
               Human Resource Management in the Knowledge Economy    '   29

Having the capabilities is a necessary, but not sufficient, condition for
success. Organizations must also be able to develop those capabilities,
apply them, and match them to opportunities.
   To sum up, competition in the knowledge economy requires suc-
ceeding on three levels: sensing, mobilizing, and operationalizing.
Different competencies are needed for different levels of cornpeti-
tion. The combination of competencies needed for succeeding
across all three levels is collectively known as "organizational ca-
pabilities." Human resource management plays a significant role in
creating and      eloping the organizational capabilities neede
competing in       knowledge econo

Human Resource Management's Opportunity
in the Knowledge Economy
Don Tapscott (1996: 260) argues that "the human resources func-
tion in general, and uman resource professiona
should be uniquely positione to provide leadershi
formation of the enterprise." However, rather than being an agent
of change and adaptation, the HR function is too often slow to re-
spond. As Tapscott notes, "'Although some human resource p
sionals are rising to the challenge, too many are not. The
problem is that in the first era, human resource professionals were
mere suppliers of human resource functions, such as staffing needs
and compensation planning. c his may have made a lot of sense
           riod of stability and steady growth. But as we move into


            esource Management i~ $the   owledge Economy

What Is Human Resource Management Wonh?
   the knowledge economy, HRM work will not
conventional functions of staffing, training and development, per-
formance management, and so on. Human resource managemem
work in the knowledge economy includes both activities that over-
lap with other traditional business functions (for instance, finance,
marketing, strategy) and some that are nontraditional (for instance,
knowledge management). For this reason, HRM is no longer sim-
ply focused on "managing people9' in the conventional meaning of
the phrase. Human resource management is n              sponsible for
managing the capabilities that people create a          relationships
that people must develop.

Who Does Human Resource Management Work?
HR professionals still do much of the traditional HR work, although
some of that work has been outsourced (staffing, benefits, and so on)
or digitized (for example, electronic HR). Furthermore, a substantia
portion of conventional HRM work is now being done by line man-
agers and professionals from other fields, such as information technol-
ogy, or in other parts of the organization, such as the entrepreneurial
units of ABB mentioned previously. In the knowledge economy, as
HRM work expands, responsibility for HR will truly be jointly share
among FIR managers, employees, and external vendors.

How Will Technology Change the Human Resource
Management Function?
              Human Resource Management in the Knowledge Economy   31

  Twenty-one HR systems professionals
            logy trends affe         at are in various stages o
            ities (Boyett et a

. Fast and cheap access to accurate real time HR information.
  Access and the abili to analyze, assess, interpret,
  everage, and share e information effectively will
                                       Successful data mining

2. Ubiquitous access to information to improve employee effec-
   tiveness and effiiency. This means working from anywhere an
   at anytime. The size, format, and footprint of technology deliv-
   erable~ move fr         departmental desktop devices operati
     nder the full contr         ser organization to a
     and-held, pocket-            ated devices and wir
   ages that provide needed access on a real time basis to central-
   ized processing and data storage capabilities. Instant access to
   all needed knowledge and to essential meaningful data will be a
   keystone for the successfu
    variety of analytics and decision trees. These expert systems
  will "walk" managers through every step of a decision about
  people issues. The information the manager receives at each
                      nagement itz the Knowledge

4. Smart self-service. This is self-service expanding to communi-
   cate through smart phones and handheld personal data assis-
   tants (PDAs). Much of the new Web self-service will reduce the
   need for call centers and most employee self-service
   tirely Web-based. In addition, natural language spee
   tion enables intuitive application to be implemented
   speech recognition is in the early stages of acceptance, it will be
   a factor in twenty-first-century self-service. For both employee
   and manager, self-service will have to be more intuitive than
   ever. This will include push             ethnology, content that is
                relevant for the               e role(s) they a
   forming and event driven, as well.
 . Castomized content. Human resource management systems in
  the twenty-first century will enable employees to perform opti-
  mally by providing knowledgeable content that has been fil-
  tered based on the employee's role(s) in the organization. The
  vendors of the future will provide not o
  systems necessary for this infrastructure
  come the "aggregators" of content for their customers and pro-
  vide a wide range of hosting as the demand for better, faster,
  and cheaper technology support prevails.

Why Human Resource Management Roles
              Human Resource           ent in the Knowledge

New Roles and New Challenges
for Human Resour e Management
                    pete in the knowle                y, organizations
                     t is role-based (that            to specific func-
tional responsibilities, as in the past) and contributes directly to the
creation of organizational capabilities. Four roles are identified that
make it possible to create those needed capabilities: hw
steward, knowledge facilitator, relationship builder, a
ployment specialist (see Table 2.2).

A recent Business Week article proclaims "The turn of the millen-
nium is a turn ffom hamburgers to software. Software is an idea;
hamburger is a cow. There will still be hamburger makers in the
twenty-first century, of course, but the power, prestige, and money

  In the Creative Economy, the most important intellectual property isn't
  software or music or movies. It's the stuff inside employees' heads.
  When assets were physical thi      ike coal mines, shareholders truly
  owned them. But when the vit        ts are people, there can be no true
  ownership (by anyone other than the individual employee). The best
  that corporations can do is to create an environment that makes the
  best people want to stay.
34     Human Resource Management in the Knowledge Economy

                New Roles and New hallenges for
                Management in the Knowledge Economy
New Roles for HRM         New Challenges for HRM

Human Capital               intelledual capital is not owned by the employer bui is bought and
Steward                     sold in human capiil markets.
                            Workers are volunteers or free agents.
                            Market contrads replace (most) employment contrads.
                            HRM must ensure that the organidion's human capital
                            capable, effective, and grows in value.
                            HRM must broker HR services, such as talent acquirifion, learning,
                            and so forth.
                          0 HRM must leverage human capital (that is, focus on doing the right

                            things and gaining maximum output for a given input).
                            There is a greater dependence on key knodedge workers and
                            ensuring they are attraded and retained.
                          e There will be higher entry-level requirements
                              areers replace iobs.
Knowledge Facibfator      e There is an increased emphasis on learning and encouraging people
                            to learn continuously.
                          9 There is a necessity to manage knowledge (acquidtion, dissemination,

                            and so forth),
                            The organizadion mud tap into all employees' knodedge as sources

                              obsolete behaviors.
     elationsMp Builder   e   There is an increased emphasis on cross-funaional t e a m r k
                              Technology will make information more accessible and w ioin
                  Human Resource           anagement in the Knowledge Economy

           -          -   --

             ew Roles and New Challenges for uman Resource
            Management in the Knowledge Economy (Continued)
New Roles for HRM         New Challenges for HRM
                              HRM must build networks and shared people communities around
                              the strategic objectives of the business to ensure competitiveness.
                              The HRM function will focus externally and internally and look more
                              like operafions management, dealing with vendors and managing
                              the supply chain.
Rapid Deploymen                 he new goal for HRM will be to manage markets, some of whic
Specialist                    will be rapidiy changing markets. HRM will anticipate what rapidly
                              changing product markets and business strategies will require by
                              way of human capabilities and find ways to deliver it.
                          0   Work assignments are fluid, involving responsibilityfor results rather
                              than tasks.
                          0   The future resides in the capacity to design a versatile, evolving,
                              flexible HRM architecture that supports an increasing pace of
                              change. The organizational infrastructure needs to be reconfigur-
                              able, that is, elements of information, business processes, and
                              organizational design must be capable of being combined in
                              different ways to meet situational needs.
                                 mmon purpose and core values supplant tight managerial contro
                              sysfems and iob descriptions.
                              Widespread sharing of organizational information is necessary.
36                      nagement in the Knowledge Economy

  Some of the challenges facing the human resource management
function as stewards of uman capital inclyde the

     Intellectual capital is not owned by the e
     and sold in human capital markets. How do you find and ob-
     tain that intellectual capital? Do you rent or purchase that in-
     tellectual capital?
     Workers are volunteers or free agents. How do you attract, mo-
     tivate, and reta volunteers? How do you facilitate volunteers'
     identification with the organization? Nonprofi
     organizations deal with these issues on a daily
     HRM adapt practices from these organizations for knowledge
     workers in private corporations!
     Market contracts replace (most) employment contracts.
     Employment contracts are more long-term; market contracts
     are more short-term and project-base                      e
     needed level of commitment from w
     rather than employment contracts?
     Human resource management must ensure that the organiza-
     tion's human capital is available, capable, and effective, and
     that it grows in va ue, How do y
     (into, within, and out of the orga
     mum continuous capability? Some of the best college football

     HR services that are availabl
0   Human resource management must leverage human capital
    (that is, focus on doing the right things and gaining maximum
    output for a given input).         o you combine uman capita
    for maximum output? How do you combine human and other
    capital for maximum output?
* There is a greater dependence on key knowledge workers and en-
    suring they are attracted and retained. How do you create a work
    environment that adapts to meet the needs of key workers? How
    do you sense and respond to the needs of key workers?
                                    requirements for employment.
                                motivate knowledge workers? Ho
                                for personal growth among kno
    edge workers?
    Careers replace jobs. How do you balance the need for corpo-
    rate as well as professional identification and commitment?
    How do you create an environment that best utilizes temporary
    talent as long as you                  o you match t
    the corporation and the needs of temporary talent?
    Policies regarding proprietary information become more chal-
    lenging to design. What policies should govern non-compete
    agreements? How is proprietary information defined and distin-
             from tacit knowle ge that must be share

Knowledge Facilitator
by other organizations make full use of a firm's product function-
ality. As Intel discovered, not only was it essential far itszowaem-
ployees to share technology advances among themselves, it was
equally important for firms making the software and hardware tha
uses their microprocessors to incorporate new concepts into their
products. Cutting-edge technology allows employees in the lower
levels of organizations to seize opportunities and get breakthrough
ideas to the market first. Language barriers> are eroding: Employees

and freelancers anywhere in the world.wil1 soon be able to converse
in numerous languages online without the need for translators.
   A new role for I-IRM is to facilitate drganizatiorial learning an
knowledge sharing between employees, among departments,
throughout the organization, and with external GO-producers.    Some
of the challenges facing HRM in this role include the following.

  There is an increased emphasis on learning and encouraging
  people to learn continuously. How do you find people who
  want to learn? HOWdo you encourage employees to learn con-
  tinuously? How do you facilitate continuous learning? How do
  you retain work-life balance with continuous learning?
  There is a need to manage knowledge and data actively and
  rectly (acquisition, dissemination, and so forth). How can
               e acquired and made available to those who nee
  it when they need it? How should knowledge be managed?
  What types of information systems best meet organizational
               Human Resource Management in the Knowledge Economy   39

    Human resource management must determine how to reward
    knowledge ac uisitionand sharing. Rewarding knowledge ac-
    quisition may be the easier challenge of the two. How do you
    get employees t o share knowledge that, once shared, will no
    longer provide them with a personal competitive advantage and
    will make them expendable?
4   Information must be made available and accessible to employ-
    ees. How much information should be made available to em-
    ployees? How do you make information available to
    employees? What information formats facilitate effective co
    munication? How do you both make information widely acces-
    sible and still retain proprietary confidentiality?
    New knowledge must lead to new behaviors. As David Garvin
    (1993) explains, knowledge is of little use unless a firm is able
    to adjust its actions, decisions, and relationships to capitalize
    on the insight. What organizational capabilities are crucial for a
    firm to use knowledge more adeptly, quickly, an
    What processes enable rapid learning, unlearning, and relearn-
    ing? How can employees maintain a consistent focus for their
    efforts while constantly incorporating new ideas?

Relationship Builder
Along with facilitating the sharing of knowledge within an organiza-
tion, another important new HRM role is that of relationship builder.

                               relationships among fellow employees,

even rivals. The power of relationships is in creating synergy within
  e organization and across the marketplace. Agile combinations o
    employees who have developed .relationship networks can create
    more value for the organization than the mere sum of their individ-
    ual contributions.
       One of the lessons from the work on complex adaptive syste
    (Pascale, 1999) is that relationships hold the key to organizations
    resourcefulness and resilience. The ways in which people interact
    substantially determine the extent to which the full benefits of their
    capabilities are realized by a firm. Some of the challenges facing
    HRM in this role include the following,

      There is an increase emphasis on cross-functional te
      How do you organize optimal team structures? How do you
      create a whole that is greater than the sum of its parts? How
      do you achieve balance between individual (functional)loyalties
      and team identification? How do you create and dissolve proj-
      ect teams and sustain high performance? There is no single,
      correct answer. W. L. Gore and Associates rely on what they
      term a "lattice structure" (Shipper &: Manz, 1992) that empha-
      sizes integration, whereas Technical and Computer Graphics
      (TCG) relies on a cellular form that emphasizes flexible auton-
      omy (Miles et al., 1997).
      Technology will make information more accessible and join
      ple together in different ways. What technologies can l n people
      together? How do you train people to maximize the effectiveness
-     of these technologies? How do you minimize communication
      failures? What dimensions of social capital are required to trans-

       people communities
       ness to ensure competitiveness. How do you persuasively com-
       municate the organization's strategic o ctives? How do you
       build commitment t those objectives
       workforce has only a partial relations
                                                    uch of your
                                                     the organiza-
                               anagement in the

  tion? Kaplan and Norton (2001) suggest that HRM can use
  individual balanced scorecards to effectively communicate
  strategic themes an to gain commitment across
    he HRM function will                         internally an
  look more like operations management, dealing with vendors
  and managing the supply chain. How do you gain the trust of
  other members of t               ain? What infor
  share among members of the supply chain? How do you maxi-
    ize effectiveness an efficiency in the supply c

       Deployment Specialist
The rapid pace and constantly changing environment that many or-
ganizations and industries confront creates another new challenge
and new role for HRM: the rapid deployment specialist.
Competitive advantage gained by bringing new products to the
          efore competitors
variety of different ways to create value, will allow competitors to
meet or exceed such advantages almost instantaneously. Rather
than creating and sustaining a long-term competitive advantage
that is defended ov                 organizations in the kno
                                          , in-and-out, guerr
ties in the marketplace. Once the adva
these organizations will move on to the next opportunity. Many
                      nagement in the Know

Fortunately, improved information technologies are available, or
are being developed, to facilitate this. However, the challenge for
HRM in the knowledge economy is substantial and significantly
different from H                         century, Some of the cha
lenges facing HR in this role include the following.

@   The new goal for HRM will be to manage the contributions in-
    dividuals make to specific externa markets, some of yvhic
    be rapidly changing markets. Increasingly, HRM will need to
    emphasize and understan events taking place beyond the
      ers of the firm. Human resource management will anticipate
    what rapidly changing product markets and business strategies
    will require by way of human capabilities and find ways to de-
    liver it: How can you anticipate what human capabilities may
    be needed to enact business strategies? How can you prepare
    human capabilities when markets change rapidiy? What mix
    core and contingent workers provides maximum flexibility an
    maximum effectiveness?
0   Work assignments are fluid, involving responsibility for results
    rather than tasks. How do you define what people will do in
    their work assignments? How do you coordinate across work
    assignments that are fluid?         you manage careers
    work assignments are fluid                design effective
      erformance measurement                 the objectives are
             Human Resource Management in the Knowledge Economy   43

                         ore values supplant tight rnanageri
                                 ions. How do you ensure
                                   you coordinate across jobs
  and between organizational functions? How do you achieve
  order without chaos?
  Widespread sharing of organizational information is necessary.
  How do you share information widely?      o gets access
  what information? How do you prevent disclosure of propri-

One thing is certain: "Our profession, the HRM profession, is at
the epicenter of a profound transformation, We have never been so
visible-or so vulnerable" {Sartain, 2001). Much like the prover-
 ial dog that      es cars, we may ask, what do we do once we've
caught the ca       man resource anagement can eirher fai
advantage of the opportunity and become less important, while
other groups assimilate these new roles, or it can carve out a new
territory by assuming these new roles, ones that can lead to both
greater prominence an greater impact. The next four chapters de-

                  of organizations in the knowledge economy.

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