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INTRODUCTION: There has been a discussion going on about knowledge work,

knowledge-intensive firms and the critical role of organizational competencies. Knowledge in organizations is considered to become an increasingly important source of value creation and competitive advantage for them. Therefore the creation, sharing and protection of knowledge are crucial to the success of a modern organization. Especially knowledge-intensive organizations depend upon the generation, utilization and uniqueness of their knowledge base. The analysis of these issues deserves the attention of researchers, and in these discussions, the necessary attention should be given to the role of HRM in KM. Organizations nowadays also undergo organizational changes, changes in leadership and employee roles. They use information and communication technologies in order to enable a quick flow of information, and to improve their performance. The growing role of innovation also shows the need for looking at human resource management from the knowledge perspective. Why are professional service organizations the right organizations to be studied in connection with knowledge management and human resource management? The answer can be found in the typical characteristics of professional services. When we try to understand the knowledge development processes, insight is more likely to come from studying knowledge intensive service firms than from traditional firms for they employ mostly people with higher education, and they depend very much on their ability to attract, mobilize, develop and transform the knowledge, and they also depend on the way of the value creation and knowledge delivery by these employees. Services are based on a professional assessment by experts involved and, partners may be personally held legally responsible for potential liability claims. They create value for their clients. The aim of this paper is to show certain aspects of the relation between knowledge management and HRM theory and practice. In accordance with this aim, this paper highlights different issues, insights and findings which can have significant

implications for the management of human resources in organizations in the knowledge era



Intellectual capital and related knowledge need to consciously manage to best developed and leverage their potential value to the organization. The field of knowledge management is little more than 10 years old. Kael Wiig, a consultant and A1 specialist, is one of the fields most prominent advocates and most likely the probable founder of knowledge management movement. He coined the term at a 1986 conference in Switzerland sponsored by the United Nations- International Labour Organization. Knowledge management is a systematic, explicit and deliberate building, renewal and application of knowledge to maximize enterprise knowledge related effectiveness and returns for its knowledge assets. Knowledge management is the formalization of an access to experience, knowledge and expertise that crew new capabilities, enable superior performance, encourage innovation and enhance the customer value.

Critical importance of knowledge management in organization:

We have seen the industrial age to be eclipsed by the information age between 1960 and 1990. And then, during the 1990s, the knowledge age has emerged to supersede the information age. Much of the value added work in enterprises today is primarily knowledge-based and there seems to be no end in sign to this trend. For example, the work of the following functions or departments is nearly totally knowledge-based.

Customer service Information system Finance Hr / Administration


Even in the manufacturing, where there is a physical product, much of the work revolves around computer-aided and manufacturing (CAD/CAM) work flow management and just in time scheduling and deliver.

Knowledge management process:

Knowledge management is considered an important part of strategy to use expertise to create a sustainable competitive advantage in tomorrow s business environment. Beckmans has proposed comprehensive eight-stage process for knowledge management--a) Identify stage, b) Collect stage, c) Select stage, d) Store stage, e) Share stage, f)

Apply stage,

g) Create stage and, h) Sell stage.

The identify stage determines which competence are critical to success. For example, every organization needs robust knowledge about its customer needs and expectations, product and services, finance, processes management, employees and other organization and environmental aspects. Then the related strategic and knowledge dominants are identified. Knowledge dominants are specialized subject matter areas where recognized experts can demonstrate superior performance. Next the existing levels of expertise in the workforce are assessed for each knowledge domain. Once the gap between existing and needed expertise are determined, the domain, experts can be constructing education programmes and performance support system to improve expertise level. The collect stage deals with acquiring existing knowledge, skills, theories and experience needed to create the selected core competences and knowledge domains. In order to be useful, knowledge, expertise and experience must be

formalized by making it explicit. In addition, practitioners should know where and ow to purchase the needed knowledge and expertise in the form of database and

expert system. In order to acquire expertise, valid knowledge sources should be identified. For example, employee suggestion programmes, domain experts and best practices database might provide a valuable source of knowledge. The select stage takes the continuous stream of collected and formalizes knowledge and assesses its value. Is their insight within the acquired information? Is this piece of knowledge already in the organizational memory? Is the acquired knowledge a new plausible domain theory that needs to be added to the knowledge repository? Clearly dominant expert must access and select the knowledge to be added to the organizational memory. Without a strong filtering mechanism, the corporate memory will be nothing more than tour of sable. Where the valuable nuggets of knowledge are lost in sea of informational data. However, it is important that, a diversity of viewpoints from multiple dominant experts is represented where appropriate. Initially, one framework should be selected as the basis for organizing and classifying knowledge to be stored in the knowledge repository. The store stage takes the nuggets of knowledge and classifies them and adds them to the organizational memory. This corporate memory resides in different forms of human minds, on paper and electronically. Knowledge in human minds needs to be made explicit and formalized in order to be useful. Knowledge mist be organized and represented into different knowledge structure within a knowledge repository just as the data and information are organized and represented in differing types of database. Much of this knowledge can be represented in electronic form as expert systems. The share stage retrieves knowledge from the corporate memory and makes it accessible to use. The workforce makes their needs and personal interest known to the corporate memory which then automatically distributes any incoming new knowledge to its subscribers either electronically or on paper. In addition, individuals, groups and departments often share ideas, opinions, gossip, knowledge and expertise in meetings. It is crucial that the potentially valuable portions of these communications, discussions, arguments and collaborations are made available to the capture stage of knowledge management process, for example--- differing points

of view and their ratio should be captured as part of any decision-making process as well as the method used to reach the final decision. The apply stage retrieves and uses the need knowledge in performing tasks, solving problems, making decision, researching ideas and learning. In order to easily access, retrieve and apply the right pieces of knowledge at the right time in the right form more than a query language is needed. Integrated Performance Support Systems (IPSS) Uliuslow and Bramer are being used by leading organization too greatly increase the performance and capabilities of knowledge workers. First to easy the access, natural classification systems need to be built for browsing or retrieving knowledge. To retrieve just the right knowledge the system is required to understand the users purpose and content. To receive the knowledge at the right time requires a proactive system that monitors the users action and determines when it is appropriate to intervene in the form of a job or training module. Users can easily customize the format in which knowledge is presented. Finally, users can request reference, advisory, testing and certification modules for the same. The create stage uncovers new knowledge through many avenues. Such as observing customers, customers feedback and analysis, casual analysis, bench marking and best practices, lesson learnt for business re-inquiring and process improvement projects, research, experimentation, creative thinking and automated knowledge discovery and data mining. This stage also covers how to elicit nonverbal, unconscious knowledge from domain expert and turn it into documented formal knowledge. New source of knowledge and insight are formalized and captured by knowledge management process and made available to users who need the knowledge. An eight stage may be added, that is, the sell stage in which new product and services are crafted from the intellectual capital that can be marketed external to the enterprise. Before this stage is possible, considerable maturity should be attained in the other seven stages. There appears to be two paradigms for knowledge management. The one that has the greatest currency at this point is concerned with managing information contained in some kind of repository or other, be that a set of electronic database, a professors

collected lectures or company archives going back 37 years stored in stable that nobody dares to dispose of because of fear of law suit. The archival paradigms are well represented in corporate processes management consultants expertise, and a variety of tools. Second paradigm for knowledge management has to do less with the administration of existing information than with the creation of new knowledge of the known practices of construction of the work scopes where knowledge is generated. There is the knowledge of management of knowing rather the management of knowledge. Another productive way of thinking about the role of tools in knowledge management is to consider what shorts of knowledge and knowing practices are readily available in a organization are easily identifiable, and attract in general the greatest efforts.

Knowledge management and the links to HRM:

In an era where competitive advantage is perceived to be linked to knowledge, considerable interest in knowledge management continues to be the trend. Given the broad scope and interdisciplinary nature of KM, this interest spans traditional functional and professional boundaries ranging from IT professionals, to

accountants, marketers, organizational development and change management professionals. A notable common feature of this widely divergent activity is an emphasis upon knowledge work, knowledge workers and the nature of knowledge within organizations. While this debate at times results in professional turf battles, it may also lead to new opportunities for collaboration across traditional professional and functional boundaries. One potentially rich area for collaboration is that between that emerging group of professionals, who irrespective of training or title, have as their number one priority a focus on management of the knowledge resource in organizations and the more established and functionally embedded group of HRM professionals. Indeed, interest in the relationship between KM and HRM has increased over recent years as both KM and HRM have grown more sophisticated and complex.

While it can be argued that there is a reasonable consensus on the nature and scope of HRM, its components and principles, this is not the case where KM is concerned. Accordingly, before one can undertake an analysis of the relationship between the two areas, it is necessary to state as clearly as possible what is understood by KM. Much of the literature of KM continues to reflect a techno-centric focus, similar to that of information management, which in essence regards knowledge as an entity that can be captured, manipulated and leveraged. This is a limited and ultimately hazardous perception. Critical to any realistic understanding of knowledge and its incorporation into the management of organizations, is awareness of a range of views on the concept, which includes perceptions of knowledge as an entity (akin to information), as a resource, as a capacity and as a process. For present purposes, it is important that knowledge is viewed as a social creation emerging at the interface between people and information and especially within communities engaged in communication, knowledge creation, knowledge sharing and learning. From an operational perspective, KM can be described as the systematic processes by which an organization identifies, creates, captures, acquires, shares and leverages knowledge. For instance, while knowledge in itself may be difficult to manage, all the related technologies, structures, instruments, stocks, flows and even people are susceptible to a range of management disciplines and activities, including accountability and control. Given that these activities largely concern intangibles, it is important to think of management in a post-industrial context, with implications for organizational structures, resources, cultures and strategies, management styles and the roles and expertise of staff. When this is coupled with a focus on sustainability, the level of complexity only increases. In terms of the HRM function, the rise of the so-called knowledge economy has had a major impact, with a considerable shift from HRM as a bureaucratic personnel management operation to the development of discrete HRM functions over the past few decades. This has been accompanied by the integration of these functions to support competitive advantage and a more strategic thrust. Having said this, a considerable number of experts in the area warn that HRM faces extinction if it does not respond to changes brought about by the shift from a traditional to a knowledge based economy. Unable to add value under these conditions, the HRM function is perceived to be under extreme threat. It has been suggested that one way for HRM

to reinvent itself is through its contribution to effective linkages between human capital management and knowledge management within organizations. The rapid growth of technology has led to an economy where competitive advantage is increasingly based on the successful application of knowledge. Knowledge, with its intangible aspects, is becoming a defining characteristic of economic activities, as opposed to tangibles such as goods, services or production processes. The rise of the knowledge economy has seen a proliferation of information and communication technologies, coupled with greater organizational complexity, the growth of virtual and global organizations and rapid change. This in turn requires drastic change within HRM to respond to changing demands of the knowledge economy. Traditional HRM functioned under narrow operational boundaries; in the knowledge economy the role of HRM needs to expand, looking both within and outside the organization. The traditional focus on managing people has been broadened to managing organizational capabilities, managing relationships and managing learning and knowledge. The emphasis on discrete HRM practices is also broadening to a focus on developing themes and creating environments conducive to learning, as well as to the acquisition, sharing and dissemination of knowledge within organizations. A revitalization of the HRM function to respond to the demands of the knowledge economy and to develop linkages with KM requires major changes across four key areas:
a) Roles, b) Responsibilities, c) Strategic d) Focus and e) Learning Focus (see Figure 1).

Figure 1: Mapping the Relationship Between KM and HRM Roles: In the knowledge economy, organizations will need HRM that is characterized by a new set of roles that can assist in generating and sustaining organizational capabilities. These new HRM roles are those of human capital steward, knowledge facilitator, relationship builder, and rapid deployment specialist. The human capital steward recognizes the value of intellectual capital, must ensure that human capital is available, effective and that it will grow in value; this means brokering the services of knowledge workers. The knowledge facilitator places emphasis on learning and development, the effective management of knowledge, and creating environments conducive to knowledge creation, sharing and dissemination. The relationship builder focuses on creating and sustaining networks and communities of practice, of joining together people in various parts of the supply chain in new ways. The rapid deployment specialist faces the challenge of rapidly

changing markets where information, business processes and organizational design can be combined in different ways to meet ever changing dynamic environments characteristic of life in the knowledge economy. KM has the capacity to significantly broaden the role of the HRM professional. Relationships: HRM in the knowledge economy should reflect a responsibility for developing and sustaining organizational capabilities through activities that overlap with traditional business functions such as strategy formulation and implementation, finance and marketing, as well as new functions such as KM. This requires developing new relationships that reflect a shared responsibility among managers, employees, customers and suppliers for HRM. KM can create a new role for HRM that can provide the means by which to forge new relationships. Strategic focus: In the knowledge economy a primary focus of HRM should be the development of human capital and the management of knowledge. MacDonald (2003) identifies a need for HR professionals to identify and channel intellectual capital toward the development of a concise set of core competencies, strengths and capabilities. An emphasis on traditional long term strategic development and long range planning in HRM need to be complemented by a more short term strategic approach that can be responsive to unpredictable, dynamic, fluid environments which characterize the contemporary business world. In conjunction with a shortterm strategic focus, organizations need to be thinking about long-term sustainability as well as constant renewal and revitalization. As Lengnick-Hall & Lengnick-Hall (2003) suggest, a rapid deployment specialist can respond to the need for business processes and teams that can be rapidly mounted and then reconfigured to suit the changing needs of business environments characteristic of the knowledge economy. In order to gain competitive advantage from KM, organizations need to identify core competencies, or integrated knowledge sets, that distinguish them from competitors and add value for customers. Ulrich (1997, 1999) refers to these knowledge sets as organizational capabilities, and suggests that HRM can play an important role in creating and developing the organizational capabilities required to compete in the knowledge economy. Saint-Onge (2001) also alludes to the need for the HR function to transform itself in order to respond to changing requirements of the knowledge era. He suggests that a strategic capabilities approach where resources are

structured across individual capabilities, organizational capabilities, and knowledge architecture. The role of the HRM professional will then focus on integrating individual, team and organizational learning for the benefit of both customers and shareholders. HRM can play an important role in creating and developing the organizational capabilities that form part of contemporary KM strategies geared to creating wealth from intellectual capital while maintaining a commitment to sustainability imperatives. Learning: A pivotal aspect of life in the knowledge economy is the need for learning. The emphasis on discrete HRM practices is broadening to a focus on developing themes and creating environments conducive to learning, as well as to the acquisition, sharing and dissemination of knowledge within organizations. This includes creating and sustaining learning environments and nurturing communities of practice. The new role for HRM includes managing intellectual capital and developing human capital within the organization. There is the need for a strong emphasis on constant renewal, or revitalization of the organization. Fitz-enz views human capital as the only active asset within the organization. In referring to the four human capital domains of acquiring, maintaining, developing and retaining, Fitz-enz views the development aspect as unique in the sense that only people can be developed. The development domain holds the key to achieving organizational change, growing individual and team capabilities and creating value while simultaneously attending to sustainability imperatives.

Knowledge, Skills, Competencies, Expertise: Employees can carry

out their tasks only if they possess the necessary knowledge, skills and competencies. This is why one of the obvious tendencies in HRM is competency development and management. Knowledge, skills, expertise are major factors to be considered at the hiring process, career development and annual performance evaluation. The demand also increases the recruitment of staff which reflects the consumer and client base of the organization (e.g. diversity).

Organizational framework to support knowledge management:

In organizations which have no separate unit for knowledge management in the organization, we usually find three organizational units which are responsible for the

coordination of KM efforts and activities. These units are the HRM-department, the library and the IT-department. They can work together well if their responsibilities are clearly stated. Obtaining and storing knowledge is the responsibility of the library. For employees to have access to knowledge the right technological background must be provided, which is the task of the IT department. The HR leadership provides the human factor required for knowledge creation and sharing (Table 1). Organizational unit Provides the human factor Hiring process, and organizes the psychological tests, intellectual capacity. evaluating annual performance, career management program, competency management. Facilitates communication. IT department Assuring internal and external communication, providing dataflow between departments, between the organization and other organizations, providing technology for the storage of documents. Function Tasks

HR department

Functions Library source.

knowledge Supplying information, gathering and analyzing data, special training.

Table 1: Organizational units supporting knowledge management.

Organizational culture as enabler of knowledge processes:

A supportive, collaborative organizational culture is important from the perspective of knowledge creation and sharing. Characteristics of this culture are change, innovation, openness and trust. If we look at the organizational culture the starting point should be the value system of the organization because knowledge-oriented organizational culture is a value-based culture. The main values which have an impact on the development and are critical elements of a knowledge-oriented organizational culture, are: quality, knowledge, skills, competencies, expertise,

knowledge sharing, and innovation. The successful utilization of employee 2. competencies is the base of an organizations quality performance, which is why personal competencies also play an important role in the value system of an organization with knowledge-friendly culture. In connection with this, we have to consider people, processes, technologies and supporting structures. It depends on several factors, how important knowledge, or learning in the organization is, or if the organization has a learning culture. These factors are the following: defining the place of learning and knowledge in the organization, the way individuals and the organization as a whole learn, and the facilitation of learning in the organization (Figure 2). This means that the organization has to have appropriate philosophy, knowledge oriented mission. In the organizational philosophy learning, and organizational knowledge creation they must have the place they deserve, which leads to the individual improvement of employees, and at the same time contributes to the fulfillment of organizational objectives. A similar approach to knowledge processes can be seen at Stonehouse who stresses the role of the value system of the organization among the characteristics of a learning culture, attitudes, motivation (learning has great importance,

empowerment of the individuals enhances challenging existing systems and facilitates experiments, and trust is a base for improving knowledge). Mutual trust is a background for employees to openly formulate their ideas in front of their colleagues, and to try those out. A key to successful knowledge management is that the most successful organizations develop their knowledge oriented culture not by changing the existing organizational culture, but by adjusting their knowledge management projects to the existing organizational culture (Davenport et al. 1998).

Individual learning


Mission 1.


Resources Figure2: Characteristics and framework of a learning culture.

Skyrme and Amidon presented a model for knowledge sharing organizational culture, presenting three organization levels: organization (enterprise) level, work group (team level), and the individual (Figure 3.). Organizational enablers are the

framework, which have been created by the top management with the aim of knowledge creation and knowledge sharing. From these elements, culture seems to be most important, however is tightly connected to efficient knowledge leadership. Another important factor is organizational structure: knowledge sharing functions better if organizational structures are more informal and more flexible.

Foundations for Capability Roles Skills Learning Organizational Enablers Leadership Structures Cultures

Physical settings

Figure 3: Factors of the development of a knowledge culture. The success of changes depends on the effectiveness of the four pillars (building connections, team building, physical setting, and HR policies). For a successful knowledge management the knowledge of individuals, the members of an organization is crucial, so this gives the basics of the model. Individual and organizational learning can be faster and can be facilitated by information and knowledge sharing, if openness and trust are characteristics of organizational

culture. Thus challenging, discussing and improving the present practice and processes are supported. If we want to have people working for an organization who are ready to share their knowledge with other organization members they have to be motivated, and this again can be supported by an organizational culture, which acknowledges risk taking, and which does not take mistakes for a failure but as a chance to learn something. Knowledge-based activities need employees with commitment to knowledge-related activities.

The role of the human factor in knowledge processes: Although

in successful knowledge management an important precondition is the abolishment of organizational hierarchy; and although supporting structures help carry out a successful knowledge management, it is the human factor which plays the major role because knowledge management is basically a human-intensive activity. Knowledge workers: Knowledge work means the creation, transfer, transmission and utilization of knowledge. Between these processes there is a permanent relationship. A tight cooperation between the different units of an organization supports the creation of new knowledge. In connection with knowledge work, in the field of knowledge management a trend can be observed. In earlier history of knowledge management organizations treated their knowledge assets like their physical assets, and placed them in knowledge repositories. This huge amount of knowledge requires professional improvement of knowledge work. For this, creative knowledge workers are needed. This suggests that in the future the role of knowledge work and knowledge workers and also that of technologies, which are used by knowledge workers in their carrying out tasks, will grow. Who is a knowledge worker? Knowledge workers are people, who as a primary aspect of their work create knowledge, share it with other people or use it to make decisions or to act. To this category of the labor force belong 30% of all employees (research scientists, ITengineers, strategic planners, doctors, lawyers etc.). Owners of the knowledge are experts, and they are good qualified people with a lot of experience. Their most important power base is their expertise. Their power position is especially strong if they are the owners of knowledge which is important for the organization, and which is not substitutable knowledge. These factors have

an impact on their behavior, often in contrast to the aims of knowledge management and of the organization. North identifies five categories of people working in a knowledge-based organization. The first group is the group of the so called professional staff, the experts, who carry out professional assignments under the leadership of middle level leaders, and at the same time they learn continuously themselves. They play an important role in shaping the image of the organization, and they have an impact on the customer satisfaction. It happens often that many knowledge workers are employed by the same employer for example by an accountancy firm. All these knowledge workers use their own knowledge, skills and experience. At the same time, however, they also use the synergy which is the result of the cooperation between them and their colleagues, the complex processes and procedures which have been developed by the firm, and the collective knowledge within the firm. These people could be self employed knowledge workers, but they decide to work together with other people as part of a larger organization as employees. Knowledge workers and knowledge entrepreneurs are middle level leaders, who know market potentials and solve customers problems. Middle level leaders play a key role in the knowledge transfer, for they usually have been working for the company or organization for a longer period of time, and they enjoy the trust of their superiors (upper level managers) and also that of their colleagues. They have connections to the customers, and are motivated to changes and to initiate new things (North 2002). They play a central role in synthesizing the tacit knowledge of professionals and that of upper management and in making it explicit. They integrate it into technologies, products and systems, and take care of knowledge conversion. Upper managers are visionaries and context builders, who recognize market chances and build knowledge supporting framework, particularly through supporting systems. They facilitate knowledge development and knowledge transfer. They are a pattern for other people. Professionals, who carry out their activities in the fields of information and communication, are information brokers and infrastructure managers. Since knowledge workers use and produce information, the quality of their work is influenced by the accessibility of information sources that they need, or the relevant information. It also depends on how fast they can get the information they need. In this situation it is the supporting employees who can help. They work in secretarial offices, telephone centers, or in Back Office and support the work of other

colleagues. The organizational framework and other supporting features enhance that organization members take part in the knowledge processes, so everybody can contribute to common success. Each group of knowledge workers shall well defined tasks (upper management, middle management, IT workers, supporting workers, experts); if they are loyal to the company, they strive for its best.

Role of the leadership: In the knowledge transfer of an organization, leadership plays the most important role through motivating knowledge sharing in the organization. This often concerns the motivation of employees to transfer knowledge. In order to build trust and to decrease tension within the organization colleagues need to have space for their activities. Most of all in creative processes they should be allowed to make mistakes (Miller 1999), because it is a chance to learn at the same time, to learn from failure. Measures aimed at trust building, a higher degree of freedom, and people with diverse professional background make an ideal base for team work. Task of the leadership is not only to ensure the framework for a knowledge-friendly organizational culture, but to take part in knowledge processes as well. Knowledge workers not only need good processes and technology, but also an organizational structure which does not impede them.

Knowledge communities: An important aspect of a knowledge oriented

culture is where everyone thinks together for improvement and better performances. This can be achieved through successful team-work, as teams give the right framework for people to concentrate on the problems they have to solve. Knowledge and learning are a crucial part of the success of organizations. A variety of information and communication technology can be used to support learning in knowledge communities. For the actions in this field, the involvement of management is necessary, because the support of effective learning and knowledge sharing in and between communities involves everyone in all job roles (Barrett et al . 2004, 10). Knowledge communities are connected by common interests and goals

and work on achieving a common performance. The term knowledge communities is used, on one hand, for learning in communities with voluntary participation, and learning in communities with a more managed membership and, on the other hand, for learning within the same community and between communities. They work together and use their knowledge for the goal of developing and selling a new product or improved service. Because there are people together from different organizational units they play an important role not only in the creation of new knowledge but also in the organization-wide knowledge communication.

Commitment and motivation: A major challenge nowadays involves the

ability of an organization to collect as much explicit knowledge as possible. However, there can be a discrepancy between what is rational at organizational level (contributing to the shared knowledge) and what is rational at the individual level. Flexibility of general knowledge and skills is important both to the employer and the employee. Management consulting firms, for example, often emphasize the importance of developing specific models and approaches which cannot easily be used in other firms. It is important that a knowledge worker likes his job, because otherwise, if he leaves the organization, it will not be easy to replace him. Particularly the creativity of colleagues in key positions can have a positive impact on the organization. This is why managers motivate their employees to share knowledge by implementing knowledge management systems and incentives structures. However research demonstrates, that employees are mostly intrinsically motivated and they prefer incentives like acknowledgements and personal development over higher salary. The kind of knowledge management system used by the organization, also affects preferences for the intrinsically motivated incentives. Rewards which encourage individual knowledge sharing, are: salary increase, promotion,

acknowledgment of contribution, increased reputation in the organization, gaining status as an expert, professional and personal development. Neither the extrinsically motivated incentives nor the kinds of incentives which are usually assumed to be effective, work at motivating knowledge sharing. People prefer intrinsically-motivated incentives, such as colleagues acknowledgment and respect, improved reputation, and the possibility of professional or personal development. These findings make

sense, for an employee can increase his or her value by being positively positioned as a trustworthy source of knowledge in the organizations. One of the most important characteristics of the knowledge worker is effective communication. Well documented and organized information carries less impact if there is diminished communication involved. In order to accomplish communication skill building, among others the following solutions should be considered: Closely mentoring individuals that struggle to communicate effectively but show promise as effective knowledge managers, or ensuring strong formal education for those individuals involved in knowledge management. Effective communicators should be put in positions where they manage knowledge. Moving knowledge from tacit to explicit has a synergistic effect on the organizational communication the more people create, the more can be shared among knowledge workers.

Fairness and commitment: In connection with commitment and motivation

the issue of fairness has to be addressed. It has been a highly discussed issue in law and society for a long time. Nowadays it has become a popular topic in organization theories as well. There are several fields in human resource management where these issues arise over and over again: fairness practiced during recruitment, the distribution of work among employees, fairness of remuneration, bonuses, or of advancement. Fair process is very important in the knowledge-based organizations the success of which is highly dependent on the trust, ideas and commitment of colleagues. The problem is that most of the organizations declare that they want to support creativity and innovation processes, but they forget to apply fair process to reach this goal. The reason can be that leaders find it a threat, because delegation of competencies might diminish their authority. Procedural justice is not a decision based on consensus or democracy in the work place. It means the engagement of employees by asking for their input and using it during decision making processes. Engagement is a good way to communicate the respect of management towards employees and towards the ideas of employees. Fair process also means explanation. Management has to make clear what considerations lead to a certain decision. Explanation also assures people that their ideas, their input into the decision have been heard and considered by leaders; and employees trust the

management even if their ideas have not been accepted. Fairness also depends on the formulation of clear expectations: people have to know, how they can contribute to the performance of the organization, and vice versa; if employees dont trust their leaders, they can be obstacles to the performance of the organization. Nowadays this issue is even more important than earlier because knowledge-based organizations depend more than traditional companies on the commitment of their employees. A challenge for todays organizations is that an organizational climate is to be developed which helps people offer their creativity and expertise to the organization, and this is a precondition for a fair process.


In industries where organizations are required to be more adaptive in todays environment and if flexible organizations are thought to be more appropriate structures, then it follows that there should be a focus on implementing in-house flexible components. Flexible or dynamic, organizations are said to have internal structures and capabilities to facilitate responsiveness and adaptability to changes in economic and market conditions, changes in government policy and employment legislation, unemployment, development in technology and methods of production, competitiveness and removal of skill boundaries. Organizations have several options in considering flexible work practices that include flexi time, part-time work, job-sharing, and home-based working. Organizations face several operational influences in attaining increase in their responsiveness to changes, both internal and external. One of the most important issues is determining the extent of control or the amount of autonomy the organization must possess some procedures that enhance its flexibility to avoid the state of rigidity and simultaneously have some stability to avoid chaos. The ready availability of information networks, e-mails, and portable telephones is seen as accelerating the virtuality of work. A virtual organization is a network of cooperations made possible by ICT, which is flexible and comes to meet the dynamics of the market. In this way the virtual organization gains benefit with regard to the traditional hierarchical systems. This new form of organization emerged in 1990, known as modular organization, network organization or digital organization.

The virtual organization is a social network in which all the horizontal and vertical boundaries are removed. It consists of individuals working out of physically dispersed workspaces, or even individuals working from mobile devices and not tied to any particular workspace. It is the coordination-intense structure, consisting primarily of patterns and relationship, and this form needs the communication and information technology to function. The information and communication technology (ICT) coordinates the activities, combines the workers skills and resources in order to achieve a common goal. There is a creation of network relationship that allows for contracting, manufacturing, distribution, marketing or any other business function. In a virtual organization, a small group of executives oversee directly any activities that are done in-house and coordinate relationships with other organizations. Managers here spend most of their time coordinating and controlling external relations with the help of computer network links. Examples of companies working virtually are: Nike, Reebok, Puma, Dell computers, HLL, etc.

Characteristics of virtual organization:

Power flexibility Informal communication Flat organization, multidisciplinary teams Goal orientation Dynamics Homework Customer orientation Organizational boundaries are vague Sharing of information
The driving forces in a virtual organization are basically the virtual team. Every organization requires a team to carry over its activities in an orderly fashion, and such a team also exists in a virtual organization. In a virtual team, members primary interaction is through some combination of electronic communication system to tie

up with dispersed members who never or rarely come face to face. Here people communicated online using links like WAN, video conferencing or e-mail. The concept of virtual teams has gained considerable attention in recent years. Within global organizations, the virtual team involves collaboration and teamwork between geographically and temporarily separated workforces. Such collaboration may also extend beyond the organizational boundary, linking partners in joint venture and contractors who are in various locations. Emergency information and communication technologies such as groupware, Internet and desktop video conferencing systems are seen by global organizations as facilitating such collaboration to enable the workforce to share knowledge and expertise. Virtual team working is potentially necessary fir global organizations. It requires trust relationship. Research findings suggest that personalized trust relationship is essential for continuous virtual team working. Such personalized rust relationships are normally established through face-to-face interaction and socializations. The use of information and communication technologies appears to be inadequate for establishing, reproducing such trust relationships owing to their inability to provide access to the basic stage of participants activities. The three primary factors that differentiate virtual teams from face-to-face teams are:

Absence of preverbal and nonverbal cues. Limited social context. Ability to overcome time and space constraints.
The advantages provided by such teams are as follows:

It saves time, travel expenses and eliminates lack of access to experts. Teams can be organized whether or not members are in reasonable proximity to
each other.

Firms can use consultants from outside without incurring expenses for travel,
loading and downtime.

Virtual teams allow firms to expand their potential labour markets enabling them
to hire and retain the best people regardless of their physical locations.

Employees can accommodate both personal and professional lives.

Dynamic team membership allows people to move from one project to another. Employees can be assigned to multiple, concurrent teams. Team communication and work reports are available online to facilitate swift
responses to the demands of a global market. The disadvantages of virtual teams are: the lack of physical interaction-with its associated verbal and nonverbal cues-and the synergies that often accompany faceto-face communication. In paraverbal and nonverbal cues we use voice, eye movement, facial expressions, body language which help in better communication but are not available in online interactions. Virtual teams are able to work even if they are miles apart allowing people to work in teams who never get a chance to meet each other face-to-face. Despite these drawbacks, virtual teams are growing in popularity. GroupWare, computer-based systems explicitly designed to support groups of people working together, enables virtual interactions.

Features of virtual organization:

Without information and knowledge, workers in virtual workplaces become emasculated and effective. Fortunately technology and enlightened management practices can ensure that this does not happen. The technology that keeps the organization going is a seamless web electronic communication media. Technology: New technology has transformed the traditional ways of working. In particular the works of computing and telephony are coming together to open up a whole new range of possibilities. Computer Telephony Integration (CTI) will bring a new revolution to the desktop. CTI has traditionally been used in all call centre applications. E-mail integration: Integrating SMS (Short Message Service) into the existing email infrastructure allows the whole organization to take advantage of SMS products such as Express Way.

Office system integration: SMS technology can greatly enhance the existing or new office system, e.g., Phone message can be sent via SMS rather than returning it in a message. Voice mail alert: SMS technology added to the existing voice mail system builds an effective method of receiving voice mail alerts. Mobile data: This enables a laptop to retrieve information anywhere through the mobile phone network. Mobile data communications revolutionize where and how work is done. In the past corporate information has been inaccessible from many places where it is needed. The ability to link your laptop to your mobile phone means that you can remain connected to your own virtual office from anywhere.

Types of virtual organization:

There are three types of virtual organization characterized by varying degrees of virtuality. The telecommunicating companies are at one extreme where the employees work from their homes. They interact with the workplace via personal computer connected with a modem to the phone lines. Examples of companies using some form of telecommuting are Dow Chemical, Xerox, Coherent Technology Inc. The second type represents those that are characterized by the outsourcing of most/all core competences. Outsourced areas include marketing and sale, human resource, finance, research and development, engineering, manufacturing, information system, etc. Virtual Corporation does one or two things extremely well. Nike considers product design and marketing to be its core competences. Nike relies on information technology as a means for maintaining inter-organizational coordination with outsources. The third type is completely virtual. It has metaphorically been described as a company without walls that is tightly linked to a large network of suppliers, distributors, retailers and customers as well as to strategic and joint venture partners.

Examples of completely virtual organization are the Atlanta Committee for the Olympic Games (ACOG) in 1996 and arguably the development effort of the PC by IBM.

Emerging HR issues in virtual organization:

The HR issues such as recruitment, development, and socialization processes are forms of management control. These inputs control and regulate the antecedent conditions of performance, ensuring that the employees skills, knowledge, attitudes, values and interest match those of the employing organization. At the organizational level of analysis, the virtual organization is a loose web of individuals, capital and technologies which may operate in amalgamation as a flexible organization form. It involves project-focused collaborative networks uninhibited by time and space. Driven by the necessities of globalization and knowledge-based competition, it is staffed by knowledge workers brought together under short-term market relationship. It operates without apparent structure (the removal of traditional hierarchies does not remove structure in terms of power and resource control), has ever-changing boundaries and dissolves as soon as a project is completed. In a virtual organization there are loose connections of highly proficient people who are left to do their own thing in order to produce world beating products or services. The shift towards virtual organization is associated with a fundamental re alignment and reordering of jobs. Knowledge-based jobs are assumed to require greater skills, have greater variety and offer more potential for a high quality of working life (QWL). The positive side is that there is greater job autonomy and more financial stability because of the reduced commuting, launches and clothing costs. This is backed by increased working hours; a perceived increase in performance; less work-related stress and changed social relationship as barriers between the home-work interface dissolve. The negative aspects as involved in teleworking have been linked to psychological well-being. They are increased reutilization; longer hours and increase in perceived work demands, poorer physical working conditions; less social support from work;

poorer social position; and fewer career opportunities. Moreover, in a virtual organization highly skilled workers work. The jobs are variable and of short term. People have to be multi-skilled and if they are in more than one functional area they are valuable to the organization. This enables them to share information quickly and assimilate them in a manner that facilitates quick decision and improves their own ability to function.

Of late, both academicians and writers of the most recent management books and articles have identified people as well as knowledge as determiners of organizational competitiveness. Pfeiffer (1994), for instance, argues that effective management of people including developing and empowering people, sharing information, creating self-managed teams, and training people are important determiners of competitive advantage. Senge (1990) draws widespread attention to the notion of the learning organization in his management best seller, The Fifth Discipline. Thus, much of the focus of OD has been on encouraging commitment and participation by people throughout the organization. The earliest reference to the term learning organization in literature are probably from 1978, when Argyris and Schon published Organizational Learning: A Theory in Action Prespective. The term learning Organization by Peter Senge (1990) may also be understood as the continuous testing of experience, and the transformation of those experience into knowledge-accessible to the entire organization and relevant to its core purpose. A learning organization can be defined as an organization that practices organizational learning. Conversely, organizational learning is the distinctive organizational behavior that is practiced in a learning organization. Thus, the two

terms are effectively synonymous but there is difference in the nuance that should be pointed out. Learning organization is an entity while organizational learning is a process , a set of actions. Organizational learning is something the organizations do; a learning organization is something the organization itself is. Denton, John (1998) has developed a model of the creation of a learning organization. It shows the role of six antecedents in creating first the opportunity and then the desire for organizational learning.

Characteristics of learning organization:

A learning organization is one that is able to change its behaviors and mind-sets as a result of experience. This may sound like an obvious statement, yet many organizations refuse to acknowledge certain truths or facts and repeat dysfunctional behaviors over and again. Examples include the number of times restructuring initiatives are repeated because the previous attempt did not achieve the desired outcomes or the failure of mergers and acquisitions to meet initial objectives. Although there may be some metrics that can gauge and evaluate learning in an organization, this discussion will offer an alternative perspective, not about how to measure outcomes, but more about how to create learning environments that facilitate the achievement of specific or of multiple, related objectives. Such environments tend to promote learning and leadership at all levels (distributed leadership) and they are likely to make the organization more accountable for its actions as individuals tend to accept more readily responsibility for their actions. Organizations, both in the private and public sectors that have adopted this approach find that individual responsibility increases to a significant degree and accountability becomes clearer and stronger. They also find that they develop true distributed leadership (Maguire & McKelvey 1999), as everyone is a responsible agent working towards a shared vision, exploring possibilities and taking initiatives that nevertheless fit well into the overall strategic direction. Learning organizations achieve this through a strong network of relationships and peer support (rather than pressure). Enabling learning environments inform business strategy by taking advantage of distributed intelligence throughout the organization; they fully engage internal and external stakeholders by responding to issues identified by

stakeholders; they change the behavior of the organization through mindset and attitude change in individuals within the organization; and, finally, they help to integrate sustainability thinking into the culture of the organization. All human organizations are complex and one way of understanding their characteristics is through complexity theory. The following characteristics are those of complex learning organizations and are based on research with companies in both the private and public sectors undertaken by the Complexity Group at the London School of Economics, UK, over the past 12 years. Organizational learning (OL) is more than individual learning and arises through the interaction of individuals in groups and teams of different sizes. What is characteristic of OL is that it is an emergent process in the sense that its outcome is not predictable and it is more than the separate contributions of individuals. (The principles of complex systems shown in italics are discussed in Mitleton-Kelly 2003) OL needs the right environment to thrive, one that allows time for reflection on past actions and outcomes and is prepared to accept some unpalatable truths and one that is not a blame culture in the sense that mistakes are unacceptable. Such an environment makes a distinction between mistakes that are the result of irresponsibility and lack of forethought and those that are genuine explorations of a new idea or a new way of working. If individuals and teams are encouraged to be innovative then they need to explore alternatives and to take thoughtful risks. But not all the experiments will succeed. For one to succeed many need to be tried. The failures are not mistakes, they are legitimate explorations of the space of possibilities, as part of the search to find new, innovative products, procedures, ways of working, etc.

CONCLUSION: The aim of this article was to describe some aspects of knowledge
managements elements and HR. Focus was on human resource issues, which are relevant from the perspective of supporting learning and knowledge sharing in organizations, involving the hiring and selection processes, performance

assessment, recognition, and other fields of human resource management. It was outlined that specific organizational structure, culture and behavior facilitate KM, and that new roles are required for HRM. We can say, that basic cultural values influence

the way in which an organization treats knowledge and the way it cares for the learning processes, how organizations members communicate knowledge, how they transfer it internally and externally. We are certain that effective learning and effective knowledge transfer are beneficial for all those involved, because it can result in a competitive advantage for the organization. Forming the necessary framework is the task of upper management and the leaders in the different organizational units, especially through ensuring a climate that allows effective knowledge transfer in the organization. Not only the actors of the knowledge processes (different groups of knowledge workers, communities, management and employees), but also the basic value elements of a knowledge based culture, such as, knowledge, knowledge sharing, innovation, quality, and their connection to KM play a role in how knowledge processes are managed in an organization.

Reference: Pattenaker, Biswajit.Human Resource Management. Delhi.