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1 Student First Name: Ahmad Student Second Name: Al-Halak Copyright subsists in all papers and content posted on this site. Further copying or distribution by any means without prior permission is prohibited, except for the purposes of non-commercial private study or research, as defined in the Copyright, Designs and Patents Act 1988, or as otherwise authorised by statute. To obtain permission, please contact the author of the relevant paper in the first instance or with details of your request. management context 1

2 BBS Doctoral Symposium 2010 THE RELATIONSHIP BETWEEN HUMAN CAPITAL AND ORGANISATION STRUCTURE CAPITAL IN KNOWLEDGE MANAGEMENT CONTEXT Abstract This research investigates and analyses the role that human capital plays in the determination of the organisation structure capital. The study is based on wide spectrum of current literature, which presents theoretical and practical research on the subject of study. Knowledge Management (KM) is systematic process based on models and technological integration, which helps in the development of the conceptual framework. It is assumed that KM leads to benefits for the organisation and provides a platform for future research. Also, the research addresses KM impacts on human capital and the enhancement of organisational effectiveness. The study aims at large businesses in Syria. It is hoped that the results and findings of this research study will benefit the companies in Syria. 1 INTRODUCTION management context 2

3 Knowledge management (KM) involves creating a learning culture to continuously create, share, and use knowledge for the purposes of developing new opportunities (Nonaka and Takeuchi, 1995) Knowledge and knowledge management (KM) play a big part in HC and OSC. Knowledge is considered as the new wealth of organisations by which superior business performance and a competitive advantage can be achieved (Al-Alawi, Al- Marzooqi and Mohammed, 2007). This research describes and analyses the relationship between human capital (HC) and organisation structure capital (OSC). According to Bontis (2001) HC defined as skills of an employee that help meet the task at hand. It is the combined knowledge, skill, innovativeness and ability of the organisation s individuals. On the other hand OSC is the hardware, software, databases, organisational structure, patents, trademarks and everything else that employees use to support their business activities and processes (Bontis, 2001). Al-Alawi, Al- Marzooqi and Mohammed (2007, p. 22) stated that, knowledge management is currently one of the hottest topics in information technology and management literature. Knowledge management has become one of the most important trends in business because organisations are trying to achieve greater value from the knowledge they possess, such as finding better ways to value, or elicit, and apply knowledge to create new knowledge (Denning, 2006). More than 25% of Fortune 500 companies employ Chief Knowledge Officers and another 43% are planning to do so within a few years (Bose, 2004). In addition, approximately 81% of the largest U.S. and European companies use some form of knowledge management (Becerra-Fernandez, Gonzalez and Sabherwal, 2004). However, it has been difficult for firms to implement and maintain effective knowledge management systems. management context 3

4 This research intends to take an inward look and to have a deeper understanding of the organisation performance. Therefore, human capital, and organisation structure capital need to be examined more closely in order to fill the gap in current KM research. Additionally, the research presents a conceptual framework (see figure 1) with processes and contents perspectives instead of just Information technology (IT) effects that were heavily focused in the early KM initiatives. Besides IT, there are also human capital and organisation structure capital that are critical to KM and its processes. Figure 1. Conceptual Framework of Human capital and organisation structure capital. 2 AIM AND RESEARCH OBJECTIVES The aim of this research is to investigate the relationship and the effect of Individual Knowledge (human Capital) and Organisation Knowledge (organisation structure capital). The research will satisfy the following objectives: Explore the relationship between human capital and organisation structure capital. Also to address the knowledge management strategy on the organisation structure capital. management context 4

5 Examine the effects of organisational learning on the human capital. Look at the effects of culture on the human capital. Test the results and provide development of a framework in order to satisfy the research and maximise the future businesses profit. 3 RESEARCH QUESTIONS The research objectives will aim to address the following research questions How knowledge management can significantly contribute to human capital and organisation structure capital and what degree of impact. How human capital (HC) and organisation structure capital (OSC) interact in knowledge management (KM) paradigm. What is the influence of knowledge management (KM) on both human capital (HC) and organisation structure capital (OSC)? 4 GAP OF THE RESEARCH This research investigates and analyse the relationship between the Human capital and the organisation structure capital which exists in the current literature according to Youndt and Snell (2004). There has been little effort by researchers and management specialists to try and to address the relationship. One reason could be that the lack of information on the exact nature of human and capital mediation and mechanisms they employ in organisational processes, and as long as it is not addressed. There is little scope for the development of a proper assessment framework which might lead to improvement in the functional of business organisations. 5 LITERATURE REVIEW management context 5

6 The literature review provides an insight into the issue of Knowledge Management especially taking in consideration the human capital which affects Knowledge Management. It is important to understand the current literature in relation to Knowledge Management strategies, influences, models presented and dimension in order to comprehend the link between human capital factor and it relation to organisation structure capital. In the present age the link between competitive advantage and Knowledge is considerable, which reinforces the need to in depth evaluation of the concept of knowledge management. The human capital factors are of significant importance to determine human capital and its role within the organisation structure capital. There are different frameworks which have been presented by (Alavi et al., 1999; Scarbrough and Swan, 1999; Nickols, 2000; Hackett, 2000; Choo and Bontis, 2002; Abell and Oxbrow, 2001; Jashapara, 2005) as explained below, which distinguish the varieties of Knowledge that exists e.g. A common framework which has been introduced is a framework which categorises the dimensions of knowledge which distinguishes between tacit knowledge and explicit knowledge. The tacit knowledge emphasises the internalisation process of the acquisition of knowledge in which the candidate does not know how to accomplish a particular task. The approach of explicit knowledge is just the opposite, where the knowledge acquired by the individual is done consciously and there is a focus and knowledge can be communicated easily to others (Alavi et al., 2001). Tacit Knowledge is the concept which has been introduced by Michael Polanyi (1966) which is the foundation for assessment of knowledge Management. Nickols (2000) proposes that the categories presented by Nonaka and Takeuchi should be broken down into more procedural knowledge which is declared (Nickolas, 2000). management context 6

7 Scarbrough and Swan (1999) have introduced a collection of studies which suggests that many knowledge management initiatives over-emphasis the role of IT systems and result in failure to address the human factor. On the other hand Hackett (2000) focuses on practices associated with management and organisational learning he made a substantial contribution to the companies or organisation. The study by Choo and Bontis (2002) addresses the strategic management of the intellectual capital for well informed organisational set up; the emphasis of the study is on intellectual capital disclosure. Abell and Oxbrow (2001) emphasises on the existing environmental conditions which impacts the operation of business. Their research focuses on business drivers for various sectors which influences the manner in which Organisation achieves knowledge management. Alavi et al. (1999) discussed the knowledge management systems which can be adopted as a challenge for the benefit of the organisation. Jashapara (2005) argues that knowledge management is a processed of four direct channels such as, system technology, organisational culture, culture and strategy. The strategic knowledge management is implemented using intellectual capital and organisational performance. The systems technology and organisational learning supports the management of knowledge at various levels. The study of intellectual capital based on his frameworks represents that knowledge and learning are important factors in assessment and measurement of organisational success. 6 RESEARCH METHODOLOGY The methodology of the study will be mixed quantitative and qualitative nature, hence the study attempts to address the research gap between human capital and organisation structure capital through gathering and interpreting responses of top executives and professional management context 7

8 individuals of various Syrian businesses corresponding to their business knowledge and experiences. A core study research methodology will be employed these responses and gathered through surveys that involve formulating research questions based on the research framework stated in the study (see figure 1). A combination of interview-based and/or postal surveys and surveys via could be used to obtain responses in this study. The questions in the survey would be quantitatively coded or scaled thus acquiring quantitative responses for the analysis. The quantitative responses will be evaluated using statistical software package. Also the research would be qualitative which intended to provide a deeper understanding of the subject and reliability between HC and OSC. It involves an interpretive, naturalistic approach to its subject matter and gives priority to what the data contribute to important research questions or existing information. 7 RESULTS AND CONCLUSION This study highlights the rewards of assessing the need to evaluate the role of human capital (HC) and organisation structure capital (OSC). The management needs to reflect on the need of collective action based on the theories presented for effective knowledge management. Presently, there is a knowledge revolution taking place within corporations. The desire to build knowledge bases in order to capture intellect is building momentum. The most direct benefit from a structure organisation of human capital will result to improvement in the functional of business organisation which is very important issue to address the specific problems that is focused today by many business organisations. management context 8

9 8 REFERENCES Abell, A. and Oxbrow, N Competing with Knowledge, Library Association Publishing, London. Al-Alawi, A. I., Al-Marzooqi, N. Y., and Mohammed, Y. F Organizational culture and knowledge sharing: Critical success factors. Journal of Knowledge Management, 11(2), Alavi, Maryam, Leidner, and Dorothy, E Knowledge management systems: issues, challenges, and benefits. Communications of the AIS 1 (2). Available online at Accessed on November 10, Alavi, M., and Leidner, D Review: knowledge management and knowledge management systems: conceptual foundations and research issues. MIS Quarterly, 25, Becerra-Fernandez, I., Gonzalez, A., and Sabherwal, R Knowledge management challenges, solutions, and technologies. Upper Saddle River, NJ: Pearson Prentice. Bontis, N. 2002a. Intellectual capital: an exploratory study that develops measures and models. In C.W. Choo, N. Bontis (Eds.). The Strategic Management of Intellectual Capital and Organizational Knowledge. NY: Oxford University Press. Bontis, N Assessing knowledge assets: a review of the models used to measure intellectual capital. International Journal of Management Reviews, 3, Bose, R Knowledge management capabilities and infrastructure for e-commerce. Journal of Computer Information Systems, 42(5) Choo, C.W. and Bontis, N The Strategic Management of Intellectual Capital and Organizational Knowledge. Oxford University Press, USA. Denning, S Ten steps to get more business value from knowledge management. Strategy and Leadership, 34(6), Hackett, B Beyond Knowledge Management: New Ways to Work and Learn. The conference board. Jashapara, A.,2005. The emerging discourse of knowledge management: a new dawn for information science research?, Journal of Information Science, Vol.31, No.2, Nickols, F The Knowledge in Knowledge Management: The Knowledge Management Yearbook ed. J.W. Cortada and J.A. Woods, Butterworth-Heinemann, Nonaka I. and Takeuchi, H The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press. Polanyi, M The Tacit Dimension. London, UK: Routledge and Keoan. Scarbrough H. and J. Swan (eds) Case Studies in Knowledge Management. Institute of Personnel and Development. Wielinga, B Knowledge Engineering and Management: The CommonKADS Methodology. MIT Press. Youndt, MA and Snell, SA., Human Resource Configurations, Intellectual Capital, and Organizational Performance. Journal of Managerial Issues, 14 (3), management context 9

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