The principal aims of this chapter are to provide a comprehensive understanding of the main processes for innovative knowledge management in human capital learning and to define a theoretical model that assesses and measures the human capital value contribution to an organization’s performance. The chapter aims to explain how technological advancements and innovation facilitate collaboration, support sharing of dynamic contents, and make the learning process easier and more fruitful. Finally, a summary is provided by way of a strategy map, which allows the tracking of the human capital learning process and assessment of ex-post learning performance.
Top1. Introduction
For years, business success rates were measured by assessing new product development, new markets, customer retention, and mass production; this manner of measurement focused only on the physical assets that the organization owned. Today, the business approach has changed vastly from that used in the past, and the most prevalent ideas about success are becoming related to how the organization thinks, what it knows, and what we can learn from that knowledge (Filstad, 2011; Argote, 2011; Ting & Lean, 2009).
Managers have noticed rapid advancements and change in the markets, especially now that information and communication technology have come to play a key role in creating a new form of organization, that is, the learning organization (Filstad, 2011; Argote, 2011; Sveiby, 1997; Lynn, 1998; Pulic, 1998).
The learning organization, as it has been defined in the literature, is a kind of organization through which we can develop and use new knowledge to improve the performance of our operational and human capital, by proposing a set of organizational elements that constitute the learning and knowledge creation process inside our organization.
The idea behind this kind of organization is the realization that the challenges in competitive markets are not only related to companies’ tangible assets, but also to the intangible assets. As a result of this change in approach, organizations’ intangible assets and knowledge are becoming the principal factors of success in today’s knowledge-based economy; what an organization knows is becoming more important than what an organization owns. This is reflected by organizations today paying greater attention than ever before to their Intellectual Capital (IC), patents, trade secrets, human capital knowledge, and management experience.
Furthermore, many researchers and academics agree that there is a need to move forward in shaping the definition of IC (Bontis, 1999; Edvinsson & Malone, 1997a, 1997b; Roos, et al., 1998; Stewart, 1997; Sveiby, 1997). The majorities of the definitions previously given were mostly spin, and emerged from the term of intangible assets. The IC classification that is found in the literature refers to taxonomy, which encompasses three kinds of capital: relational, structural, and human (Youndt & Snell, 2004; Edvinsson & Sullivan, 1996; Wiig, 1997; Walsh, et al., 2008; Sharabati, et al., 2010). In this taxonomy, human capital is considered the most significant kind of capital for the organizations based on intangible assets, for its contribution to new ideas, innovation, and knowledge sharing. With time, organizations keep investing in their human capital learning and development to guarantee a consistent flow of intangible assets among employees (Sveiby, 1997; Lynn, 1998).
Organization management has started to assign a high priority to the learning and development of their human capital as the main sources of knowledge. Moreover, interpersonal cooperation and communication between employees have been considered among the factors that utilize knowledge diffusion and allow employees to bond existing knowledge, to create new knowledge, and to solve problems.
The growing interest in learning organizations, Knowledge Management (KM), and human capital development emphasizes the strategic power of these intangible assets. Furthermore, researchers are becoming more interested in the role of higher education organizations such as universities and training institutes, and in their contributions to the development and experience of the human capital (Argote, 2011). Moreover, economists aim to understand the economic return of investments in education and training through such higher education organizations.