Knowledge Economy in the UK - Essay Example

To What Extent And Why Is A Knowledge Economy Possible in The UK Context Economies are achieved when diversification allows a shared input on organisational level to share knowledge across divisions. Knowledge economy, while confronting many economic restrains view 'knowledge' as a product to understand and communicate between global information society and culture. Storey (2001) suggests that such economies require a detailed knowledge of the processes involved by the corporate sector, organised in a geographical manner (Storey, 2001: 70) targeting many origins. Therefore it is better to consider that UK knowledge economy is actually 'information knowledge economy' which is concerned with the impact of knowledge economy on the knowledge production of organisational management. Knowledge as a 'product' has acquired many management executives to research it in a broad spectrum where its governance has become a major concern in building international strategy, innovation and performance. Knowledge as a 'tool' examines the outcomes of knowledge processes, and what we mean by knowledge economy is to make the best out of this 'tool'. Knowledge economy is a product of strategical organisational fields that possess the capability to fulfill human capital inputs by increasing number of technologies (Brusoni et al, 2001). At an institutional level knowledge economy defines various levels to which regional or organisational policies are shaped in context with economic regimes. With knowledge comes innovation and a knowledge-enabled organisational environment adopts and implements knowledge strategies and develops knowledge culture in order to sustain competitiveness in the long term. However, the extent to which a knowledge economy is possible depends upon the organisation's primary levels of knowledge and innovation it can sustain (Hyde & Mitchell, 2000). Under the heading of knowledge economy lies increasing competitive pressures which are the outcomes of deregulation and internalisation. Governing knowledge under strategic management has been a critical issue that requires performance management to create definitions in context with the UK economy where 'Knowledge Movement' initiate various processes that includes sharing and transference of knowledge not limited in a specific cultural context, but entails cross-cultural origins where integrating effects within and between organisations are managed. Gratton et al (1999) suggests that various research measures on a knowledge economy are dependent upon the influences that are acquired through appropriate use of knowledge with expertise that brings credibility to the HR department (Gratton et al, 1999: 13). Strategic HRM Perspective of the Organisation The SHRM focuses on four main perspectives that question existence of the organisation for resource allocation, in-house limitations governed through market relations, internal organisation and labor markets and competitive advantage (Foss, 2005: 24-25). Though performance management (PM) initiates knowledge management (KM) by controlling and aligning the most competent individuals to deploy other workforce in the interests of organisations, but it follows some views to regulate performance. Firstly, it closely monitors employee performance and competencies to specify behaviors, skills and knowledge for employees. Then there are monitoring outputs that allows employers to decentralise control and finally there are high-velocity environments to assess employees contribution in various components of the PM system like goal setting, evaluation, training and development etc (Gratton et al, 1999: 61). The resource based perspective of SHRM is to visualise the capabilities of organisation in the light of a bundle of tangible and intangible resources required to sustain in the market competition. It is the management that analyses the accumulated stock of knowledge, skills and abilities that the organisation possess in terms of human resource (Mabey et al, 1998: 76). Since KM varies according to spatial diversification which occurs differently on country to country basis, the logical connectivity between organisational strategy and structure on internal operating procedures and relationships cannot be assumed to flow without difficulty (Storey, 2001: 70). Few organisations are prepared for this scenario where they have to straightforwardly structure themselves to maximise one type of economy, and the balance of costs and benefits of preferring one over the other are hard to quantify and cannot be assumed to remain unchanged throughout the trade cycle. Storey (2001) points that this is where the problem of managerial decision making arises in the environment of uncertainty and intra-organisational conflicts (Storey, 2001: 70). The contemporary globalist economy does not require traditional mode of decision making that requires a 'classical' top-down approach to strategy development, because knowledge economy does not fits into the realities of traditional organisational decision-making processes. Economy requires other alternatives of taking into account the process of strategy creation, for instance, the 'evolutionary' approach is based on the notion that it is the market that selects winners, and the environmental fit is the main goal where strategy is therefore emergent (Gratton Lynda et al, 1999: 8). Today decision makers claim that decision sciences have reshaped itself in professionalism where organisational success revolves around three markets, financial market, customer/product market and the talent market (Boudreau, 2005). Linking HRM and knowledge Performance Literature on cross-cultural issues of international HRM (IHRM) suggests that there is a link between HRM and knowledge performance. As Sparrow et al (2004) points out that early literature reveals to us that IHRM have the same main dimensions as HRM in a national context but since they operate on a larger scale, more complex strategic considerations are required with more complex coordination and control demands with some additional HR functions (Sparrow et al, 2004: 2). Although originally comparative and international HRM are distinct fields of study, the increasing reliance on strategic partnerships and joint ventures, coupled with a trend towards localisation, has made the need to understand how SHRM is delivered in different country while at the same time contributing towards sustained competitive advantage. SHRM practices a degree of convergence in thinking within the comparative and international HRM fields (Budhwar and Sparrow, 2002). SIHRM include exogenous and endogenous factors responsible for an integrative knowledge framework. This framework includes industry and technology performance measures, nature of competitors and regional characteristics in exogenous factors. Whereas the overall structure of international operations that occur in organisation's headquarters and the strategies that are utilised in managing international operations comes under endogenous factors (Sparrow et al, 2004: 6). The resource-based view (RBV) serves as an economic tool to measure the exogenous and endogenous resources available to an organisation and when applied to SHRM, identifies three international HRM orientations, not limited to the adaptive, exportive and integrative level HR issues, functions, policies and practices (ibid). Patton (2007) points out "RBV in terms of knowledge management evaluates a firm's advantage over others is valued through valuable and inimitable assets where the main prescription of asset-based theory suggests that strategic assets are crucial determinants of sustainable competitive advantage and the firm performance" (Patton, 2007). RBV when linked with SHRM provides the classical theoretical field with a theoretical foundation from which it explores the strategic role people and HR functions perform in organisations (Foss and Minbaeva, March 5, 2009). RBV supports competitive advantage which supports the notion that only a single organisation can deploy a value strategy and no other firm being capable of implementing that strategy that indicates competitive advantage is not supported by any current or potential competitors. However Barney (1991) points out that "sustained competitive advantage can only be achieved when no other organisation is capable of neither implementing common strategy nor any other organisation unable to duplicate the benefits of this strategy" (Barney, 1991). Thus RBV is dependent upon unique product market strategies which are not only technically sound but possess efficient and competitive factor markets for the organisation would have to pay the full value of the resources necessary for creating the relevant sustained competitive advantage (Foss, 2005: 66). Knowledge Based View of UK Strategic Organisations Managing an improved changed agenda in context of organisational expertise requires that intangible assets should be managed by rigorous ways to track their value to the project or to the organisation's overall strategic goals. There was a time when financial measurements were capable to dominate tangible assets, but today's culture dominated economy, where intangible assets and skills have become major sources of competitive advantage, calls for tools that can measure knowledge-based assets and the value-creating strategies have become a need to sustain (Patton, 2007). UK economy currently face many challenges for the innovative organisation which fundamentally challenge a predominant global public service culture where knowledge management in the form of information and communication technologies later permit to proliferate without adequate regulation or supervision. Take example of communication technologies, for which the operational information silo that have evolved as a result of this largely 'view-based' approach provide perhaps the biggest barrier to public service reform, which exists today. A typical response from senior management to the barriers encountered due to an inability for information to flow seamlessly, is to blame vendor companies for exploiting their position by ensuring non-compatibility with other operating platforms and tools (Milner, 2002: 13). However, it is for public service managers to articulate exactly what their requirements are and to demonstrate that they have a clear understanding of the requirement to focus on the need for wider engagement with other branches of public service. This, has been largely absent from the public service environment and without it, aspirations to be at the forefront of driving forward knowledge economy inspired change agenda, are embedded far more in the rhetoric than in any attainable reality. KM today has been directed towards technological aspects of management and Information technology is considered among the fields of competencies, therefore competitive advantage in this context is preoccupied with notions such as 'knowledge economy'. For instance a firm-specific product competency that may be the most difficult to imagine may be that of a patented product technology from UK and is recognised globally. Since many other firms have patented technologies across many countries but such technology, which usually spans a number of different product applications, may be labeled company specific because competitors are not allowed to copy it. Now in firm-specific human-based competencies, let us consider the great knowledge and experience hold by the Danish firm Bang & Olufsen regarding their customers. Since Bang & Olufsen are focused on targeting a clear vision of who the customers are and what preferences they have, this vision is used for product development and marketing. Drejer (2002) points out that such a firm specific competence in turn produces a niche and that is because Bang & Olufsen possess the knowledge of their customers which is of no use to its competitors (Drejer, 2002: 70). Knowledge Integration across Borders Knowledge across borders is not shared by the traditional strategy management models that consider product market attractiveness instead of focusing on appropriate positioning of companies in the market across the global industry. Contemporary view that has witnessed changes in the technological, political, and sociological environments have forced managers and strategists to draw more attention to the 'internal' view of business organisations where the integration of 'knowledge' within a product or customer is the priority (Conceicaao et al, 2000: 41). On the technological side, firm-specific process core competencies may be patented process technology, an example is that of Dell, as the company has a specialised department for developing its own process technologies, which, in turn, are patented. Consequently, the technology may be viewed as firm specific and as far as human-based competencies are concerned, evidently the knowledge of members of Dell's technology department regarding their self-designed process technologies is an example of such competencies. The increasing importance of sharing transactions between various departments in an organisation reveals that the restrictions on the performance of modern economies are essentially inherent in the abilities of the operators themselves. Thus, endogenous knowledge economy is possible when in the form of organisation, the economy possess the tendency to exploit it, and consider crucial elements for success and survival in the new economic environment. The main limiting factor encountered in this kind of transaction is not scarcity, but rather the effect of misunderstanding, of non-apprehension of communicated knowledge and information, which leads to an inability to generate relevant meaning at the receptor's level within a globalist organisation. Conclusion Knowledge economy sharing strategic management in the era of globalisation possess a dynamic view of sustainable competitive advantage that lies in the current and future RBV, and especially the intangible and tacit resources, of the organisation. The purpose of KM is to help organisations achieve goals faster and more effectively throughout the globe. Knowledge management in the context of UK requires that knowledge is continually measured against its effectiveness in helping a person or organisation accomplish strategic goals. In light of such strategic evolution, it is no surprise that HRM has adopted globalised strategic management field that has recently entered a knowledge management route where knowledge is considered as the most strategically significant resource of the firm. References Barney, Jay B., (1991), 'Firm Resources and Sustained Competitive Advantage', Journal of Management, 17: 99-120. Boudreau W. John, (2005) 'Talentship and the New Paradigm for Human Resource Management: From Professional Practices to Strategic Talent Decision Science', Human Resource Planning. Volume: 28. Issue: 2, p. 17. Brusoni, Stefano, Prencipe, Andrea, and Pavitt, Keith (2001), 'Knowledge Specialization, Organizational Coupling, and the Boundaries of the Firm: Why Do Firms Know More Than They Make', Administrative Science Quarterly, 46: 597- 621. Budwhar, P.S. and Sparrow, P.R. 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