Employee Engagement and Building Knowledge Capital

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Management thinking has bequeathed us a legacy of thinking about business organizations as machines, and the management practices it advocates are grounded in engineering. In 1911, Fredrick Winslow Taylor's classic The Principle of Scientific Management enshrined the engineering model for several generations.

Taylor studied repetitive, menial tasks and worked out how to perform them optimally, as a machine would. A manager was a programmer of robot workers; the essence of management was to create perfect plans and tell people precisely what to do and how to do. His methods resulted in great improvement in efficiency. But he believed they should be applied to every task in a business, not just repetitive, menial one. He believed that the practices of the pre-industrial age, when managers encouraged each workman 'to use his best endeavors', his hardest work, all his traditional knowledge, his skill, his ingenuity, and his goodwill- in a word, his initiative,' should be consigned to history.

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Today, most tasks of the kind Taylor studied are indeed performed by actual robots. But more than ever business demands a high degree of knowledge and experience to react rapidly changing circumstances. Fifty years ago, Microsoft, Wal-Mart, Intel, Apple, Cisco, Oracle, and Google didn't even exist. Today each one has a market value exceeding $100 billion. Meanwhile, many companies that were business giants in 1960-including Bethlehem Steel, U.S. Steel, CBS, RCA, GTE, ITT, and LTV-have disappeared, shrunk, or merged into other companies. These dramatic shifts in fortune are vivid examples of the importance of the term "Knowledge Capital". (Financial Times)

Google, the most dominant search tool on the web, was founded in 1998 by Larry Page and Sergey Brin, who were graduate students from Stanford University. Apple, the oracular Silicon Valley Company that became an icon of personal computing, has risen to its greatest heights in the years since Steven P. Jobs returned to its helm and opened horizons beyond the desktop to make it a valuable technology company by valuing its mind power. Microsoft is another one of the wealthiest and most successful companies in the world. Even more important, from a human resource perspective, is the fact that Microsoft is purely called an employee-driven organization. While other organizations base their success on better manufacturing techniques, or better technology, Microsoft's success is based on the effectiveness of their employees. (Harvard Business Review)

"Take our 20 best people away, and I will tell you that Microsoft would become an unimportant company"

Bill Gates, CEO of Microsoft (1996)

These innovative organizations growth to a significant size is, at first, surprising, but possible because of the changing trends of the capital markets. In the private sector, capital markets connect investors who have money with entrepreneurs who have ideas but little money. "Ideas" is the magic word in today's capital markets Organizations today are striving to increase productivity, improve service, and ensure that the company can adapt to ever-changing business conditions. And success on all this front depends on the organization's peoples-an asset that executives regularly cite as a primary differentiator in a fast-moving, knowledge-driven world. (Harvard Business Review)

"I believe in the adage: Hire people smarter than you and get out of their way"

Howard Schultze, CEO of coffee chain Starbucks (1994)

These innovative organizations are solving complex problems by building management talent. Human resource management plays a significant role by being involved at the strategy, policy and decision making process. The human resource management team ensures this is delivered by recruiting and selecting the right and qualified staff to ensure the goals and objectives of the organization are achieved, to deliver improved services in ever changing World. They offer their staff better compensation and career opportunities. They have greater capacity to conduct experiments, assess innovations, and share best practices across multiple locations. In an effective system, innovative organizations with the best human resource management and social change agendas would grow in scale and scope while less effective and efficient ones would diminish and eventually disappear. (Ian Beardwell et al, 1997)

For much of the twentieth century, labor and capital fought violently for control of the industrialized economy and, in many countries, control of the government and society as well. Labor and Capital were the driving forces of the economies. In the developed and globalized world of today, Capital and talent are falling out, this time to become the driving forces for strategic decision making from the knowledge economy. In fact, capital is no more as scarce as it used to be, especially in developed economies. But there is a shortage of talent, and it is becoming more acute when companies are struggling to make the transition from a production-based to a knowledge-based economy. (Roger et al, 2002)

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Therefore in today's business environment, strong forces of competition and globalization have created an urgency to focus how an organization controls and nurtures its intellectual capital. The concept of knowledge and its management has gained currency and momentum because technology has enabled thoughts and ideas to be more easily generated and distributed. With an increased application of technologies such as Internet, customer relationship management (CRM), and advanced software capabilities, the time has come for discussion of a new paradigm for knowledge management. (Bruce, 2007)

We can conclude that in the knowledge-based economy, value is the product of knowledge, information, and innovation. Companies cannot generate profits without the ideas, skills, and talent of knowledge workers, and they have to bet on people-not technologies, not factories, and certainly not capital.

In fact an organization's only appreciable asset is Knowledge Capital. As the need for intellectual capital increases, companies will be finding ways to ensure that it develops and grows its Knowledge Capital. In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage will alone be knowledge. (Pentz, 2000).

RESEARCH AIM:

The research will give an insight into the evolution of knowledge capital and a view of organizations as organisms rather than machines. Present world organizations aims at performing repetitive tasks efficiently but also encouraged the use of initiatives to deal with the non-repetitive tasks that they regard as far more important, by engaging the entire workforce and constructing a portfolio of knowledge workers.

RESEARCH OBJECTIVES:

To understand the principle of independent thinking obedience.

To understand that the gap between plans and outcomes concern knowledge management.

Effective human resource planning involves employee engagement.

Effectively using global capabilities and Professionals helps in driving intelligent solutions.

Recognizing employees as the most valuable assets?

Do managers play an important role in talent management programs?

Does empowerment of the employees leads to change management?

Why is it easy to generate activity but harder to turn it into effective action?

Is diversity a catalyst for innovation and creativity?

Globalization has led to standardization of work activities?

A BRIEF LITERATURE REVIEW:

Saunders, et al (2007) claims that the literature review describes and critically analyses the published work of various authors and researchers. A brief literature on the agenda of research describes the notion of knowledge capital, its understanding and development, the leadership structure and the managing style of organizations.

Empowerment of the Employee

The core assets of the modern business enterprise lie not in buildings, machinery, and real estate, but in the intelligence, understanding, skills, and experience of employees. The central managerial challenge of the modern business is harnessing the capabilities and commitment of knowledge workers in specific, and all the employees in general. (Bacal, 2004)

Unfortunately, it is a challenge that has not yet been met. Enlightened rhetoric of business leaders gave birth to different corporate ownership structures, governance systems, and incentives programs but the general system is still firmly planted in the industrial age. Organizations grant ownership rights only to the providers of financial capital, not to the providers of intellectual capital. They govern through small management teams at the top of hierarchies. People are motivated by carrot-and-stick incentives, combining a promised reward with a threatened penalty.But on the other hand it is also true that business organizations have become less bureaucratic in recent years and that authority has been pushed down through the ranks.(Bacal, 2004).

The Question of Leadership and Power

Power in organizations is analogous in simple terms to physical power: it is the ability to mobilize resources (human and material) to get things done. Power is therefore a critical element in effective managerial behavior and gives birth to the concept of Leadership brand; a reputation for developing exceptional managers with a distinct set of talents that are uniquely geared to fulfill customers' and investors' expectations. A company with a leadership brand inspires faith that employees and managers will consistently make good on the firm's promises. (Johnston et al, 2000)

Tapping Ideas from all Ranks

An important dimension strategic training and development in an organization is to engage the right people, at the right times, to the right degree in creative work. That engagement starts when the leader recasts the role of every employee and rather than simply rolling up their sleeves and executing top-down strategy, they ensure that employees must contribute imagination. As Torrington put it, "Traditional management prioritizes projects and assigns people to them. But increasingly, managers are not the source of the idea."

An Ingredient to a Learning Organization

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For most companies, organization design is neither a science nor an art; it's an oxymoron. Organizational structures rarely result from systematic, methodical planning. Rather, they evolve over time, in fits and starts, shaped more by politics than by policies. (Worley et al, 2009)

Organizations need to learn more than ever to construct a sound organizational structure. Each company must become a learning organization. The concept is not a new one. An organization is a system, with logic of its own, and all the weight of tradition and inertia. Therefore as the organizations keeps on learning, their working structures keep on evolving to construct the knowledge capital in the long run. (Martin et al 2010)

Intellectual Capital = Competence x Commitment

Commitment and competence are both embedded in how each employee of a company thinks about and does his or her work and in how the company organizes to get work done. Competency and commitment are both simultaneous in an effective organization.

Highlighting the Role of Social Capital to build Knowledge Capital

Every manager knows that business runs better when people within an organization know and trust one another-deals move faster and more smoothly, teams are more productive, people learn more quickly and perform with more creativity. Strong relationships are the grease of an organization, is believe of many managers. (Whitley, 2002)

Vroom has given a name of social capital to the relationships that make organizations work effectively. He suggests that the term nicely captures the notion that investments in these relationships return real gains that show up on the bottom line. In fact, it all sounds pretty simple and straightforward. Managers need only get their people connected with one another and wait for the payback. (Joanne et al, 1996)

WOLTERS KLUWER:

In the literature review the growing need of Knowledge capital and the respective importance of employee engagement has been highlighted. To analyze the practical aspect of the concept developed in the literature review, the theories are been applied on a software organization named as Wolters Kluwer. We begin with the structure of the organization, which is logically developed to form multidisciplinary teams around core processes, such as product development, order fulfillment, sales generation, and customer support.

Wolters Kluwer has a two-tier management structure, consisting of the Executive Board and the Supervisory Board. The Executive Board is responsible for the strategy, policy, aims, and results of Wolters Kluwer, while the Supervisory Board acts as an advisory body for the Executive Board and oversees company affairs and Executive Board policies.

In addition, each of Wolters Kluwer's four globally operating customer-centric divisions is managed by a dedicated team, the head of which reports directly to the CEO and Chairman of the Executive Board, Nancy McKinstry. Our research is concentrated to include Wolters Kluwer (UK) Ltd more specifically. It operates through two main brands, Croner Consulting and CHH Software, and is located at Kingston Upon Thames, Surrey.

RESEARCH METHODOLOGY:

According to Patton (1990) methodology is defined as 'the analysis of the principals of methods, rules and postulates employed by a discipline' or 'a development of methods to be applied within a discipline'. It also refers to more than a simple set of methods rather than philosophical assumptions. The multiple methods of explanatory and exploratory research techniques were used with the support of primary qualitative and quantitative data.

Research Approach

Saunders et al (2003) has described two types of research approaches; one is called deductive and the other is termed as inductive. In the deductive approach there is the development of theory and hypothesis, and then there is a strategy to test that hypothesis. On the other hand as far as the inductive approach is concerned data collected is analysed leading to the establishment of a theory. The major difference between the two approaches lies in the fact that the deductive approach normally involves collection of quantitative data and there is a journey from theory to data, whereas an element of close understanding is the life line of inductive approach. An inductive approach shall be framed during the research.

Research Strategy

Saunders et al (2003) has defined research strategy as a plan laid out to carry out the research questions and achieving objectives. As far as this research is concerned, basically two types of techniques will be the bottom line; one will interviews and the second survey through questionnaires. As a matter of fact case study approach (Yin, 2003) provides the environment where all the techniques, for example, data collection and analysis can be applied. Saunders et al (2003) have declared the case study strategy as useful to justify the research questions and at the same time it is helpful in exploring existing theory. Morris et al (1991) have also stated that this strategy is helpful in gaining a rich understanding of the context in which research is carried out and the process involved to carry out. In the research different methods like questionnaires, interviews , observations and other documentary evidences will be collected to gain the first hand knowledge to use for data analysis.

Primary (Research) Data Collection

"Primary data is normally regarded as data which is collected by the original researcher who is using the data for further investigation". (Oliver, 2002)

Primary data can be obtained through two major techniques, qualitative and quantitative. This research is based on the mixed method of using both techniques, aiming to obtain opinions from both employees and financial statements.

ANTICIPATED OUTCOME:

In the theory above a growing need of Knowledge capital and the respective importance of employee engagement has been highlighted. To analyze the practical aspect of the concept developed in the literature review, the theories will be applied on a software organization named as Wolters Kluwer. The research begins with the structure of the organization, which is logically developed to form multidisciplinary teams around core processes, such as product development, order fulfillment, sales generation, and customer support.

Wolters Kluwer has a two-tier management structure, consisting of the Executive Board and the Supervisory Board. The Executive Board is responsible for the strategy, policy, aims, and results of Wolters Kluwer, while the Supervisory Board acts as an advisory body for the Executive Board and oversees company affairs and Executive Board policies.

In addition, each of Wolters Kluwer's four globally operating customer-centric divisions is managed by a dedicated team, the head of which reports directly to the CEO and Chairman of the Executive Board, Nancy McKinstry. Our research will be concentrated to include Wolters Kluwer (UK) Ltd more specifically. It operates through two main brands, Croner Consulting and CHH Software, and is located at Kingston Upon Thames, Surrey. A brief explanation of data collecting tools are mentioned below:

Using Questionnaire

De Vaus (2002) has defined questionnaire as a general term which relates to the collection of all types of data collection, where all respondents are required to respond to the same set of questions. Questions will be designed to get the desired data from the respondents. Saunders et al (2003) has underlined the importance of the questionnaire and has described two ways to introduce to the respondents. One is self administered and the other is interview administered.

Using Self Administered Questionnaires

Saunders et al (2006) has very artistically differentiated among different situations where a questionnaire is used. Although in all situations the respondents themselves complete the questionnaires yet these have three types. These are delivery and collection, postal, and online questionnaire. In this research delivery and collection method will be used.

Conducting Interviews

According to Saunders et al (2003) there are three different types interviews; structured, semi structured and unstructured interviews. Where structured interviews are based on a questionnaire designed according to pre planned questions. Semi structured interviews are considered as in-depth while unstructured interviews are termed as nonstandardised. In the research structured interviews will be conducted from those holding managerial positions.

Data Analyses

Before analyzing the quantitative data it is essential to turn the raw information into useful information (Saunders et al. 2007). In this regard the careful monitoring will be needed to make sure the respondents answer all questions and do not include such questions which are incorrectly completed and not suitable for fair results.

RESEARCH QUESTIONS:

QUESTION 1:

Recognizing employees as the most valuable assets?

77 % answered "Yes".

23 % answered "No".

0 % answered "Uncertain".

QUESTION 2:

Do managers play an important role in talent management programs?

62 % answered "Yes".

20% answered "No".

18% answered "Uncertain".

QUESTION 3:

Does empowerment of the employees leads to change management?

47 % answered "Yes".

36% answered "No".

17% answered "Uncertain".

QUESTION 4:

Why is it easy to generate activity but harder to turn it into effective action?

41% answered "The gap between plans and outcomes".

28% answered "The gap between plans and actions".

31% answered "The gap between actions and outcomes".

QUESTION 5:

Is diversity a catalyst for innovation and creativity?

63 % answered "Yes".

34% answered "No".

3% answered "Uncertain".

QUESTION 6:

Globalization has led to standardization of work activities?

56 % answered "Yes".

40 % answered "No".

4 % answered "Uncertain".