HUMAN CAPITAL

MANAGEMENT

• LECTURER:
DR. ANGELINE TAY
TUESDAY MORNING CLASS
SECOND PRESENTATION GROUP-2

DATE: MARCH 04, 2008

 TEAM MEMBERS

• 1- Muhammad Zia Aslam (CGA-070040)

• 2- Mohammad Shahid (CGA-070092)

• 3- Maryam Sedghshakeriasli (CGA-070090)

 Relational Archetypes,
Organizational Learning, and
Value Creation: Extending the
Human Resource Architecture
By
Sung-Choon Kang
Shad S. Morris
Scott A. Snell
 Contents:
• Purpose Statement
• Basic Idea
• Key words/concepts
• Introduction
• Org. Learning Process
• HR role
• Concluding Remarks
• knowledge sharing
 PURPOSE STATEMENT
• THE PURPOSE OF THIS PAPER IS TO UNCOVER A
PROCESS OF VALUE CREATION THAT LINKS
ORGANIZATIONAL LEARNING, SOCIAL RELATIONS,
AND HRM, FOCUSSING ON KNOWLEDGE FLOWS
ACROSS DIFFERENT EMPLOYEE GEOUPS IN THE
HR ARCHITECTURE
 BASIC IDEA

SOCIAL
RELATIONS

SHRM

ORGANIZATIONAL VALUE
LEARNING CREATION
KEY WORDS/CONCEPTS

 Knowledge Based Competition

 Explore and Exploit knowledge
 Value Creation
 Relational archetype
(Entrepreneurial & Cooperative)
 Dimensions of Social Relations
(Structural, Affective, & Cognitive)
 HRM perspective
 INTRODUCTION
• The focus of Strategic Management is shifting
toward resource and knowledge-based competitive
advantage and value creation

• Knowledge is the most distinctive resource

available to effectively transform organizational
goals into reality

• People (Human Capital) are the most important

knowledge base of organizations to employ,
manipulate, and transform organizational resources,
as it is very rightly said that “its people not buildings
or machines who make the difference”
 INTRODUCTION
• Knowledge can be viewed in two dimensions
– Knowledge-Stocks: firm’s accumulated skills, expertise, and
wisdom
– Knowledge-Flows: new knowledge that can be obtained,
transferred, and integrated

• Knowledge-Stocks provide core competencies to the

firm, whereas knowledge-flows facilitate organizational
learning by expanding, refining, and modifying its current
knowledge

• It is important for HRM to equally manage knowledge-

flows while managing knowledge-stocks
 INTRODUCTION
• Sharing and combination of knowledge
require to identify the relationships that
facilitate knowledge flows i.e.
organizational learning

• Here comes the pivotal role of HRM to

effectively manage the link between social
relations and the process of value creation
 ORGANIZATIONAL LEARNING PROCESS
• Types of Organizational Learning:
– Exploratory learning (pursuit of knowledge that does not exist)
– Exploitative learning (refining and deepening existing
knowledge)

• Dimensions of Social Relations:

– Structural (density of connections and interactions)
– Affective (motives, expectations and norms)
– Cognitive (shared representation, understanding, and systems of
meaning)

• Relational Archetypes:
– Entrepreneurial (weak ties, dyadic trust)
– Cooperative (strong ties, generalized trust)
ORGANIZATIONAL LEARNING AND
VALUE CREATION
 LEPAK & SNELL’S HR ARCHITECTURE

• Lepak & Snell (1999, 2002) first gave a conceptual model

of HR Architecture

• They said that human capital (stock of knowledge) is the

source of firm value creation

• HR practices, employment modes and relationships base

on the value and uniqueness of the human capital

• The model (figure 2) explains the human capital

contribution toward competitive advantage but does not
address knowledge flows
LEPAK & SNELL’S IMPROVED MODEL
 HR CONFIGURATION FOR MANAGING
RELATIONAL ARCHITYPES

• Targeted HR practices toward managing social relations are

necessary, apart from managing human capital

• HR practices don’t expand to all employees involved but focus on

helping core employees build relationships with others

• The HR practices (design of work, the incentive structure, and

development programs) should be focused on opportunity,
motivation and ability

• HR practices reinforce and complement each other as a coherent

system to improve organizational performance (figure 4)
 CONCLUDING REMARKS
• No doubt innovation and learning are vital for firm value
creation

• To acquire, transfer, and integrate new knowledge is the

key for success in turbulent time

• Managing social relations is instrumental for organizational

learning process

• When we talk about knowledge, social relations and value

creation, it refers toward an effective role of HRM

• However, it is easy to formulate a theoretical framework in

this context but really difficult to practice in this diversified
world of business
• BEFORE THANKING OUR VALUED
AUDIENCE, WE WOULD LIKE TO
SHARE SOME FACTS AND EXAMPLES
FROM INDIA

• AS WE ALL KNOW THE INCREASING

IMPORTANCE OF INDIAN ECONOMY IN
BUSINESS WORLD, LET’S HAVE A
LOOK OF CHANGING BUSINESS
ENVIRONMENT & HUMAN RESOURSE
PRACTICES FROM INDIAN
PERSPECTIVE
 A Global Web Assembly

Parts

Sales
Sales
Sales

Advertising Parts Parts Design

Parts
KEEP CROSS CULTURAL ISSUES IN MIND
WHILE MANAGING PEOPLE
Indian Perspective
In India these
Developments
Impact all sectors
including
Manufacturing

Characteristics of Globalization
•Chaotic Competition
•Radical change
•Opportunities
•Strategic alliances
•Complexity/Uncertainty
•Flexibility
•Customer focus
•Saliency of People Mgt Issues

Critical issues in shifts from Capital to Knowledge Economy

“Hanging on for dear life” : Survival in the face of turbulent change
Indian businesses are taking giant steps

Every journey to corporate

transformation requires taking
a strategic step in the desired
direction
A journey of 100 miles begins
with a single step
 CHALLENGES FOR HR IN INDIA

The problems India

Faces in
Achieving Global
Standards:
Challenges for HR
 CHALLENGES FOR HR IN INDIA

• Acceptance of how things

are, which inhibits growth
toward world class
professional vision
• Hierarchical mindset
• No frame of reference for
creating “customer WOW”
• Slow acceptance of change
• Slow internalization of Work
ethic
• Lack of proper infrastructure
 SOME HRM EXAMPLES FROM INDIA

• Classic Strips (Mfg.): Come Out of Control Mindset

 214 workers including contract workers - Most are blue-collar

growth from 4 workers 25 years ago

 Main motto “dignity at work.”

Believes in: “valuing every individual, giving people their due, freedom, respect, opportunity
backed by lots of training.”

 Employee spends 2 ½ hrs every month on training (kaizen)

has a library with trade journals, magazines and books

Most employees are with the Company for the last 15-20 yrs
Women make 1/3rd of the workforce
It includes handicapped people--Proactive diversity policy
The Company shares with employees a %age of its annual profits
 SOME HRM EXAMPLES FROM INDIA
• Mahindra & Mahindra:

• Focus on HR
– Hired a Yale University-educated president of HR
– He was earlier a CEO for 2 Tata Group companies
– Heads 150 HR managers

• Is partner in building Company Strategy

– Responsibilities include employee well-being

• Business Strategy aimed to give competitive advantage:

Talent management
Creating synergy
Creating a culture of integration
Succession planning
Developing a global mind-set
 SOME HRM EXAMPLES FROM INDIA
• Susken Communication Technologies Banglore

• Pride: Work culture that exemplifies Values

• Inspiring vision: “unleashing India’s creativity.”

• It is a situation of complete trust and equality:

“No-monitoring policy” leads to transparency & freedom from fear
No attendance system and No limit on sick leave that an employee can avail
Complete freedom to employees to come & go
Freedom to think and innovate

• Same rules for all

Same hotels when on travel
CEO as all others fly economy class
CEO sits in similar cubicles as all others
THANK YOU VERY MUCH