Organisational Flexibility through Human Capital Development

Organisational Flexibility through Human Capital Development

Ana Martins (Xi’an Jiaotong-Liverpool University, China), Isabel Martins (University of Glamorgan, UK) and Orlando Petiz (University of Minho, Portugal)
DOI: 10.4018/978-1-4666-1969-2.ch003


The current knowledge economy has brought several challenges to contemporary organisations. There is need for flexibility on the part of key players, namely individual employees as well as organisations as a whole; this flexibility arises from the innovation in both products and services. The complexity of knowledge requires an education that enhances softer skills. The intellectual capacity, creativity, and adaptability of individuals gives rise to greater flexibility. This strengthens the fact that there is a change of paradigm in the way human capital is viewed. Through the human-oriented perspective, knowledge is seen as collective sense making and social practice. The objective of this chapter lies in this context of complexity, change, and adaptation within an economic and social reality based on knowledge. Therefore, the chapter aims to reflect upon Knowledge Management in companies such as universities where tacit knowledge is stored as intellectual capital in the minds of both lecturers and students and to highlight the need to instill the new paradigm which fosters knowledge creation and sharing in universities.
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Traditionally, educational economists based their analysis on primary education, which is in line with traditional economic and management theories. However, today with the advent of knowledge economy, these traditional theories are considered have become somewhat outdated. In 2003, therefore, the World Bank challenged this traditional economists’ view as a means to develop higher rates of returns by arguing the need for investment in universities and thereby making higher education play a fundamental role in the knowledge economy. Consequently, this means that higher education should undergo a mind shift in order to embrace a new paradigm, i.e. the need for higher education to be closer to industry, and to engage in knowledge production (Kok, 2007). Higher education should remain true to its raison d’être—knowledge creation and its quest for truth. This is further corroborated by Kok (2007, p. 184) who highlighted “the development of academic research capacities” is seen as the starting point for the development of human capital and tacit knowledge.

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